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Guest Blog: GrowthFunders

Uncategorized 17/01/2014 1:00 pm

An Introduction To Crowdfunding

We all know how difficult it is to find the money, these days. Especially if you’re the owner of a start up, early stage, or established business. There will come a point, or perhaps it’s already arrived, where you need to think about raising growth capital. It used to be that you could go to a bank to do this, but with the economy as it is currently, they aren’t lending as readily as they once did.

Is there an alternative?

An emerging trend over the past couple of years is Crowdfunding, a growing market which is continuing to gain 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?

You may have heard the term, but may not be sure exactly what it entails. 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 one is the right one?

This all depends on your type of business, 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 perhaps not yet generating revenue and are looking to raise growth capital in exchange for shares in their company, there is us…

 

Let us 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 build a diverse portfolio of investments from different sectors and stages.

Then v. now

It used to be that raising capital 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 crowd funding platforms, such as GrowthFunders, has made 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

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. As their core strategy is to provide services and space to support business growth, we know that HUB Workspace share our enthusiasm for this. We are delighted to work alongside them to provide ambitious entrepreneurs, for whom raising capital is a core part (and the next stage) of their growth strategy, 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.

Craig Peterson, Co-founder and COO of GrowthFunders

Follow Craig on Twitter
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