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Guest Blog: GrowthFunders

17/01/2014 11:00
Written by Craig Peterson, the Co-Founder and COO at GrowthFunders
 

“An Introduction To Crowdfunding”

Over the last few years, start up, and early stage business owners have found it increasingly difficult to raise seed funding through traditional channels. It used to be that the bank was the place to go, but with the economy in its current state, they are no longer lending as readily as they once did.

An emerging trend from recent years is Crowdfunding. This is a growing market which looks set to gain even more momentum as we move further into 2014. Read more about this in the Nesta report “The Rise of Future Finance: The UK Alternative Finance Benchmarking Report”.

What is crowdfunding?

Crowdfunding is the practice of funding a venture, product, or service by way of a large number of people putting in smaller amounts of money. As with most things in the twenty-first century, the majority of crowdfunding now takes place online. There are four types of crowdfunding:

  1. Reward-based
    Pledgers receive an item or service in return.

  2. Donation-based
    Contribute to a charitable cause. Feel warm and fuzzy inside.

  3. Lending-based
    Loans are repaid to lenders over a period of time.

  4. Equity-based
    Investors buy shares in the company in exchange for finance.

Which type is best?

This depends on the type of business or project that requires funding, as some models of crowdfunding will be more appropriate than others. For example,

  • Film-making or music production will be most at home on rewards-based platforms like Kickstarter or Indiegogo.

  • Individuals looking to raise money to fund operations or charitable causes can be found on Fundly or Go Fund Me.

  • Those businesses who want to borrow finance from peer-to-peer lending platforms, pitches on Funding Circle or Thin Cats would be most appropriate.

  • For businesses who are not yet generating revenue and are looking to raise growth capital in exchange for shares in their company, there is us…

Who are we?

Allow us to introduce ourselves: we are GrowthFunders, an equity-based crowdfunding and co-investment platform, working to bring together ambitious entrepreneurs and serious investors. Entrepreneurs, who are on the cutting edge and have developed disruptive business models, can use the platform in order to raise growth capital for whatever stage their business is currently at. Investors can use the platform to screen their investment opportunities and to build a diverse portfolio from different sectors and stages.

How things have changed

It used to be that raising equity finance for a pre-start or start up business was a time-consuming process. Instead of being able to focus solely on the building of their business, entrepreneurs often had to spend valuable time and effort travelling the country in order to pitch to angel networks.

The introduction of crowdfunding platforms, such as GrowthFunders, has made the process of raising equity finance much simpler and a lot more streamlined. This technology allows all of the information to be gathered in one place. The pitch, business plans, and financial forecasts are all uploaded onto the platform, which potential investors have access to. Any questions they may have can be asked directly to the entrepreneurs seeking investment, through our Q&A feature. Take a look at one of our current investment opportunities:

The Soccer Factory

The Soccer Factory

Investments made into Seed Enterprise Investment Scheme (SEIS)-compliant start up and early stage businesses can benefit from up to 78% tax relief on investments. You can find out more about available tax efficient investments on our website.

Taking equity crowdfunding online saves time for all concerned: investors can browse pitches at their leisure, knowing that all the information they need is right there, whilst entrepreneurs can focus their energy on creating the best business they can.

Where we are

Alongside a base in London, is our operational office in the North East. At the moment, we operate nationwide, offering a number of exciting, UK-based investment opportunities to UK-based investors.

Could GrowthFunders help you?

To find out more about equity crowdfunding and us, please visit our website: www.growthfunders.com

GrowthFunders is dedicated to working with forward-thinking partners who share our visions when it comes to offering services and support to high quality, UK-based, small businesses, ensuring that they are investor-ready and therefore have the best chance of raising growth capital. We know that Carlton & Co share our enthusiasm for this and we are delighted to work alongside them to help regenerate the UK business scene and provide ambitious entrepreneurs with a straightforward and streamlined route to equity finance.

Craig Peterson is the Co-Founder and Chief Operations Officer at GrowthFunders, a platform developed and operated by GrowthCapitalVentures.

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