Crowdcube campaign support from the experts

Introduction to Crowdcube

What is Crowdcube

Crowdcube is an equity crowdfunding platform for entrepreneurs of start-ups and growing businesses to connect with potential investors. 

Crowdcube enables entrepreneurs to raise finance with the added benefit of being backed by the crowd. For investors, Crowdcube provides a way to handpick a stake in an innovative business that traditionally would have been restricted to corporate investors.

Since Crowdcube first pioneered equity crowdfunding in 2011, a total of £1bn has been invested through the platform from a crowd of over 1,2m members into 1,000+ funded businesses. Businesses like the challenger bank Monzo, which raised £1 million in a record-breaking 96 seconds, as well as household brand names such as River Cottage and the Eden Project along with businesses such as Freetrade, BrewDog, Grind and Chip have all successfully raised growth funding from the crowd.

Crowdcube is based in the UK but has dedicated teams across Europe.

Criteria to raise funds

Crowdcube can support:

• Private ltd companies with a website or app,
• UK or Europe-based HQ,
• At least 2 directors (at least 1 full-time>35hrs) before the raise starts,
• EIS raises only.

The minimum raise on Crowdcube is £150K in either GBP or EUR. The average raise is £670,000, and the largest raise to date was with BrewDog, who raised £10m. Crowdcube can process investments from international investors. More info about investor criteria here.

What's included

The basics: 

A Crowdcube campaign page includes:

Logos, images, campaign text (idea & team sections), discussion forum, document requests, campaign updates and rewards. Crowdcube no longer require a campaign video to be part of the financial promotion.

Services Crowdcube provides:

• Raise under the Crowdcube Nominee
• Tax relief and Companies House filings
• Comprehensive marketing support
• Full legal completion of the round
• Transparent fee structure
• Access all analytics in one place in a campaign dashboard
• Free templates & tools
• Membership to the Funded Club (more on this below)

Fee structure

Fees for businesses raising finance

There is no fee for listing a business on Crowdcube.

• Asuccess fee of 7% (exc. VAT) is only charged on the amount successfully raised.
• There is a 0.25% legal completions fee on the entire round, plus a 0.47% Stripe payment processing fee for UK debit cards used to invest via the platform (that goes directly to Stripe).
• Subject to a minimum fee of £15,000.

Fees for investors

When making an investment, investors will be charged an investment fee of 1.65% (increased from 1.5% as of 1 February 2022) of the amount invested, subject to a minimum of £0.50/€0.50 and capped at a maximum of £250/€250. If the investor makes a profit on the investment, Crowdcube will take a 5% success fee. More info here.

Deal structure

Crowdcube offers both a direct or nominee structure, as well as a combination of the two, so business owners can choose the model that's best suited to their business.

For many businesses, the main advantage of a direct shareholder model is that it enables you to foster a stronger relationship with your investors. Many larger investors may require direct investment.

With a nominee, Crowdcube holds and is the legal owner of, the investment on behalf of the investors, so businesses only have one legal shareholder on your share register and Crowdcube handles the administration. Find our more about Crowdcube's Nominee here.

FCA & Due Diligence

Crowdcube is authorised and regulated by the Financial Conduct Authority (FCA), and therefore approves every pitch on the platform to ensure it is fair, clear and not misleading. Their Due Diligence Charter outlines the analysis and verification that is conducted on equity fundraises on Crowdcube, this includes pre-live due diligence, live pitch monitoring and post-funding due diligence. Read more about this here.

Live campaign

Timings

A pitch will remain private on Crowdcube until it reaches a certain investment milestone; this amount will be agreed between the entrepreneur and the Crowdcube Campaign Manager. This is to provide sufficient time to on board the lead investment and to give the business' own network of customers, family, friends and business contacts exclusive access to the pitch.

Once this initial investment target is raised, the pitch will be made public for 28 days or less (changed, from 30 days) giving Crowdcube’s investor community and the business' wider network the opportunity to invest. In order to maximise the success of the crowdfunding raise, entrepreneurs will continue to promote the pitch to their own network throughout the duration of the time on Crowdcube.

Managing your campaign

Crowdcube provides an Entrepreneur Dashboard to manage the pitch. The Entrepreneur Dashboard enables the business to:

• View the key stats related to the pitch (amount raised, % raised, number of investors)
• Post an update on the pitch page
• Access data and analytics on the pitch
• View activity in pitch forum, including the author and date of the latest posts
• Email all investors in the pitch
• View the live pitch

Marketing

To ensure all pitches on Crowdcube are promoted to our investor community, the amount of marketing your pitch receives is dependent on the volume of traffic and activity on the pitch. So the more traffic driven to the pitch page, the more exposure it will receive through Crowdcube’s marketing.

Throughout the raise, the following marketing support will be provided from Crowdcube:

• Included as new pitch in Crowdcube’s newsletter to the full email database
• Featured as a ‘Mover & Shaker’ in the weekly newsletter if the pitch makes significant progress in the first two weeks
• Promoted via a weekly personalised email to our most engaged members every week throughout your raise; these emails achieve an open rate of c.50% and Click Through Rate of c.7.6%
• Targeted solus emails will be sent to all investors and followers of your pitch when the pitch reaches key milestones such as 50% raised, 75% raised and overfunding
• Updates posted on the pitch are sent to the most engaged audience throughout the raise

Investor sign-up & payment process

Post-raise

Once the maximum target is hit, Crowdcube will close the pitch and begin the completions process. This usually takes up to a month to complete and will include the following;

• Legal review
• Anti Money Laundering (AML) checks
• Cooling off period
• Approvals and completion formalities
• Payment capture
• Share issue
• Tax relief application

Investors typically have a 7-day cooling-off period to consider their investment after which it becomes legally binding. On average, funds will be released 10 days after Crowdcube start collecting payments. In total approx 17 days after the campaign closes.

Become a part of Crowdcube's Funded Community.

• Access expert insights
• Simple shareholder management
• Get exclusive benefits and services

Access the Secondary Market

Crowdcube's Secondary Market is called "Cubex". This is where investors can express interest to buy and sell shares in private European businesses.

How we work with Crowdcube

The ISQ programme is designed to guide you through everything you need to do to launch a successful campaign on Crowdcube. Our programme is structured and delivered by a team of experts who have been in your shoes. We have crowdfunded successfully. As a client, you will speak to the ISQ team regularly and you'll have your own programme to work through. Our programme is designed to ensure you have covered the following;

• Fundamentals of any successful campaign
• Investor document creation
• Building your online presence
• Mapping your crowd
• How to find investors using Linkedin
• Securing early interest from potential investors
• Building your marketing & comms plan
• Campaign text & video script creation
• Live campaign management
• Post raise support

Read more information about our Crowdfunding Programme here.

Disclaimer

Note that Crowdcube makes updates and improvements to its service offering on a regular basis. The information provided above is correct as of 22/03/23.