We have been experimenting with USA based funding sites during May, the idea behind these sites is that investors can back a project without actually buying shares, so supporting a project instead of purely investing in them. You might think that would not work well, but surprisingly businesses are raising $millions in exchange for nothing more than high fives!
Often the companies in question offer their products at the point of launch for backers offering more than the minimum $1. So for example a book author may offer a copy of their book once its published or a technology company a copy of their software etc. This is actually very helpful for all concerned as backers get something for their money and the companies concerned get to raise funds via the promise of future sales.
There are of course also the Crowdfunding sites that offer shares in exchange for an investment and these often have tax advantages such as being Enterprise Investment Scheme (EIS) approved investments or for the pure start up phase businesses the Seed Enterprise investment Scheme (SEID) approved investments.
I’ve kickstarter and have dipped my toe in the water, investing in a number of interesting opportunites. There are many similar platforms around including the well know Seedrs site and Crowdcube.
Investing in projects from sites like these is of course high risk, but potentially could be very rewarding, using these channels as a method for raising funding for your own Portfolio clients is a great extra angle to consider when you are seeking funding options.
Do you need specialist help to raise funds from private equity houses?
Our team have extensive experience with preparing pitch decks, and pitching to our network of private equity houses. Here at FD Capital we can help you right through the process from raising seed finance to a full IPO. Drawing on our experienced Finance Director network we can help with each and every aspect. Preparing a business plan, crafting a pitch deck and making the right introductions for you.