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
Technical Leaders - Working with the Management Team
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 is…
• 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 – limited investments
• Typically a syndicate each investing £10k - £100k
• Is there a way to have 5000 angels each investing
£10?
• 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 – 68k UK based lenders, > £220m lent,
<1.4% bad debt
• Kickstarter.com – >132,000 launched projects, > $977m
pledged to-date, 44% success rate
18. Crowdcube to date
Success so far…
Deals successfully funded
£18 million
£2,400
av. investment
£187,000
>59.7k
Average amount raised
funded so far…
95
members
FCA Authorised
£1.9 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