Introduction to equity crowdfunding platforms - Crowdcube and SeedrsNov 30, 2022
UK Equity Crowdfunding Platforms
Crowdcube and Seedrs are the most well-known equity crowdfunding platforms in the UK. Contrary to the way most other equity platforms work, Crowdcube and Seedrs bring the world of business investment to the everyday person as well as more ‘professional level’ investors. These everyday people, sometimes referred to as retail investors, are able to buy shares (invest) in businesses typically from as low as £10, at the same time as other more experienced investors who may be investing much larger sums of money into the same companies. Put another way, Crowdcube and Seedrs have democratised the world of business investment.
Platform Referrals to ISQ
The majority of our clients launch their campaigns on either of these two platforms, making the most of the strong partnerships we’ve enjoyed with both for many years. Many of our former and current clients have been initially introduced to us by Crowdcube or Seedrs. The main reason for this is the platform believes the business has a good chance of running a successful campaign, provided they’re directly supported by us in the preparation and management of their campaign. Our work with these clients usually starts from the very early stages right through to the running and closure of the live campaign on the platform.
ISQ Introductions to Platforms
Other clients come to us direct, often on the recommendations of former clients. There are several benefits to this, the most important being that we’re able to coach and prepare the client for their application to launch on either platform. This significantly improves the chances of the platform approving the client’s application to raise with them. It’s very rare for a client introduced by us to be declined by a platform, whereas the rate of decline by a platform on initial application directly from a business can be very high.
We don’t specifically recommend one platform over the other to our clients. We do help clients reach a decision on which platform they’d prefer to go with. There are a whole host of variables around platform choice and an immediate clear-cut decision isn’t common. We can however guide our clients around how they reach their decision, based on current platform dynamics such as sector, industry, raise types and amounts etc. These dynamics are typically highly fluid; for example one week you might see that 90% of the campaigns on a platform are B2C whereas a few weeks later B2B might have risen to close to half of the listed campaigns. We’re able to help a client to distil clarity from what might otherwise seem to be complex and confusing in terms of platform choice.
Once the platform is chosen, we work very closely with both the client and the platform. An easy way to understand our role is this; the platform will have a series of requirements a client and campaign needs to meet in order to launch on their platform. (These requirements are primarily to ensure compliance with legal obligations imposed by the FCA.) We help the client to meet these requirements based on our extensive knowledge and years of experience of what works, and what doesn’t.
If you’re considering raising equity investment for your business, perhaps via Crowdcube or Seedrs, why not take this quick and easy Readiness Quiz. If that shows crowdfunding might be suitable, you’ll have the opportunity to book a call with us to discuss your ambitions.
We may also be able to help you with your SEIS application; see how we partner with SEIS/EIS experts Seedlegals here.