A short after dinner Introduction to the three main types of Crowd Funding in the UK given by Alan Scrase Incubation Centre Manager, SETsquared at University of Southampton
Executive Association Solent Intro to Crowd Funding 14 Feb 2014
1. An overview of UK Crowdfunding
Alan Scrase
21st March 2013
1
2. Context
⢠SETsquared Partnership - the Enterprise collaboration of the
Universities of Bath, Bristol, Exeter, Southampton and Surrey
⢠Collectively supports the growth and success of new business
opportunities through spin-outs (20%), spin-ins (80%), licensing,
acceleration and incubation
⢠Running 10 years
⢠Raised over £1bn investment
⢠1,000 companies created with 90% survival rate
3. UK has a wealth of entrepreneurial
talent
⢠UK has lots of great ideas
⢠Need to cultivate ideas into the next
Google/Twitter/GroupOn
⢠Often stifled by access to Money
Google says searches for
"business plan UK" have
increased by 60% over the
past year and searches for
"small business loan" are up
by 34%
4. The way it isâŚ
⢠Grants complicated and time consuming
⢠Debt finance hard to come by
⢠What if a large number of people lent a smaller
amount?
⢠Venture capital difficult to find for smaller
requirements
⢠Business angels â limited investments
⢠Typically a syndicate each investing £10k - £100k
⢠Is there a way to have 5000 angels each investing
ÂŁ10?
⢠What if anyone could become involved?
5. Crowdfunding
⢠Crowdfunding is an approach to raising the capital required for a
new project or enterprise by appealing to large numbers of ordinary
people for small amounts
⢠Possible via the web and driven through Social Media
⢠Crowdfunding examples
⢠Funding Circle.com â 68k UK based lenders, > ÂŁ220m lent,
<1.4% bad debt
⢠Kickstarter.com â >132,000 launched projects, > $977m
pledged to-date, 44% success rate
18. Crowdcube to date
Success so farâŚ
Deals successfully funded
ÂŁ18 million
ÂŁ2,400
av. investment
ÂŁ187,000
>59.7k
Average amount raised
funded so farâŚ
95
members
FCA Authorised
ÂŁ1.9 million
biggest deal
20. Regulation
⢠Important to ensure investors are protected
⢠JOBs Act is one option but not necessarily the best one
⢠EU looking at options
⢠UK FCA have started approving already
⢠Need for more transparency and consistency across
Europe
21. Post-Investment
⢠Managing input from many investors
⢠Incentivising investors with small stakes
⢠Protecting investors post-investment
⢠Voting rights
⢠Exploring liquidity for investors
⢠Ensuring businesses remain
attractive to follow-on funders