The Latest Crowdfunding News – 17/3/16
Crowdfunding News – All The Latest Updates
Hi guys and welcome to another fortnightly edition of the latest crowdfunding news. As usual we bring you an array of interesting updates from the crowdfunding world, today we kick things off by looking at Andy Murray backing five UK start-ups to investigating why crowdfunding has become a female founder’s best friend. If you missed our last crowdfunding blog post, feel free to catch up here. We hope you enjoy! ?
Murray Backs Five UK Crowdfunding Start-Ups
Andy Murray has been quite busy this year both on and off the tennis court. The Glasgow born tennis player has invested in start-ups via crowdfunding platform Seedrs.
The two-time Grand Slam champion who teamed up with Seedrs last June, invested undisclosed amounts into each start-up company.
London based Oppo Ice cream makes low-calorie ice cream, while Commuter Club offers commuters season tickets as a subscription service.
Fintech company Landbay offers P2P lending on UK buy-to-let mortgages, We Are Colony are a film streaming platform, and Readbug is an app that offers a curated selection of independent magazines.
Seedrs revealed that it has had more than £100m invested on its platform and has funded more than 320 deals to date, and on average raises up to £7m per month. (BBC, February 2016)
Unfortunately at The House Crowd we can’t offer you investments in really cool start-ups but we can offer you the latest property investments – interested? Take a look here.
Can Crowdfunding Bring Solar Energy To Small Businesses In The USA?
Solar energy is one of the fastest growing new industries in the United States, earning a shout out from President Obama at his State of the Union speech. The president noted that it is now a bigger business than coal, and typically pays its workers a higher wage. (The Verge, March 2016)
Wunder Capital, a start-up from Colorado is trying to make it easier than ever before for anyone to invest in the solar-backed-boom.
The start-up company is aiming to fund small, commercial projects which have struggled to grow at the same rate as residential solar and big industrial deployments as The Verge point out in their recent article.
Last week Wunder announced that it will be raising its own funding, three million dollar round of venture capital that will help its team grow and expand into new market areas.
Nicole Litvak, a senior analyst at Greentech Media, thinks the new funding round is a positive sign for Wunder as it continues “working to bridge the disconnect” between early stage commercial projects in need of backing and small-scale investors who are interested in solar power.
Interested in Wunder’s solar concept? Learn more here.
Equity Crowdfunding Now Most Active Investor Type in UK
Beauhurst – a data provider on high-growth UK companies released a report titled “The Deal” looks at equity crowdfunding from 2015/2016.
The data provider’s research tracks every fundraising transaction involving high-growth UK companies at seed, venture and growth stage, including many that were not announced by a press release or mentioned in the press according to Crowdfund Insider.
It was revealed that Crowdfunding, led by equity crowdfunding platforms such as Seedrs, Crowdcube, Angels Den, Seedcamp and Collider, have become the dominant investor type in seed-investing.
Moreover, Equity crowdfunding platforms also lead as single investors in venture stage, with Crowdcube (they had the single most prolific equity investor in 2015 with 136 transactions) ahead of Andy Murray’s favourite platform Seedrs.
For those of you who love visual data, we have enclosed Beahurst’s research below.
(Image Source : Crowdfund Insider)
Therese Torris, business strategist, eCommerce and eFinance writer mentions in Crowdfund Insider that across the three stages of investing, equity crowdfunding is now the second most active funder type after private equity firms, far ahead of angel networks and private investment vehicles.
Crowdfunding Is No Longer Only An Option For Start-Ups
Crowdfunding is commonly associated with start-ups, however, big businesses are now learning how to deal with outside investors.
For example, the same week the CES 2016 (Consumer Electronics Show) took place (if you don’t know the place that shows off the next best things in tech) Indiegogo launched a new platform called Enterprise Crowdfunding, which in a nutshell provides support to established businesses looking to test the waters with a new product.
Indiegogo provides strategy, support, promotions and analytics for enterprise users, as well as their users who have a track record of taking a gamble on new ideas. (World Finance, March 2016)
However, the main risk (as World Finance’s Callum Glennen quite rightly mentions) for big companies would be a loss of good faith from the crowdfunding community, who may see projects from big companies as a misuse of the system.
We actually have covered this topic in a previous crowdfunding blog post (view here) but seems to be a common topic the crowdfunding world and the main argument here is that high-profile celebrities and companies can fund their own ventures, plus afford to take the hit if their project goes south.
The concern is that it could drive out the real entrepreneurs who will be the real future engines of the economy. On the flipside it can viewed with a well made, open and clear campaign, larger businesses can engage and expand their customer base by operating in a more public and transparent approach.
Which side do you take on this crowdfunding issue?
Crowdfunding Is A Female Founder’s Best Friend
At the end of the day no matter who you are, raising funds isn’t easy. As Forbes’ Geri Stengel points out – it’s no secret that women entrepreneurs have an even harder time raising capital from angels, venture capitalists and bankers than their male counterparts. (Forbes, March 2016)
But did you know….? Women outperform men when raising funds for their companies through rewards-based crowdfunding.
With rewards based crowdfunding the backer receives a tangible item rather than shares in a company. In most cases the item that you are given is the product you are trying to raise money to produce.
So how are women championing crowdfunding? Berkeley-Haas School of Business and the Kellogg School of Management found women have the ability to tell compelling stories and connect at an emotional level. Their research also found that their use of vivid and inclusive language made them also outperform male entrepreneurs.
Want to know more about the research on women and crowdfunding? If so, click here.
What Are Your Thoughts?
Which of our chosen crowdfunding stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.
In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it.