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Businesses can use crowdfunding to find out whether their big idea will catch the imagination of investors and to raise money.
In 2017, Crowdcube, Seedrs, and SyndicateRoom raised £217.7 million through crowdfunding in the UK.
BrewDog, one of the most successful crowdfunding campaigns in 2015, broke the crowdfunding record at £25 million – a record that still stands today.
Fintech startups Monzo and Revolut have both raised millions in rounds of crowdfunding since then.As a result of the internet and social media, crowdfunding has become one of the most popular platforms to raise investment and test ideas.
Crowdfunding is a powerful method for start-ups and established businesses of all sizes and genres to raise investment in a cost-effective and time-efficient manner.
Nevertheless, with so many investment platforms available, how do you decide which one to use for raising investment?
Listed below are the ten most popular platforms for crowdfunding.
1. Crowdcube
Crowdcube is a platform for equity crowdfunding, which means that people can invest in companies on the site in return for equity ownership. Crowdcube could change traditional finance for the better.
In addition, it now offers two different types of investment opportunities: equity (shares of a company) and minibonds (lending money).
Despite FCA approval, it still targets early-stage companies as an alternative to banks, angel investors, or venture capital.
2. Seedrs
The Seedrs equity crowdfunding platform specializes in investing in start-ups similar to FundingCircle.
In its simplest form, it focuses on seed-stage businesses with investments starting at £10 and was the first platform to achieve FCA approval.
In its role as a platform, it is noted for its ability to support startup companies all the way through the funding process.
Examples include SeedInvest, Fundable, and Seedups.
3. Indiegogo
Indiegogo
The world’s largest crowdfunding website, Indiegogo, has launched more than 800,000 campaigns in 235 countries since 2008.
Among them are campaigns using film and arts, as well as start-up businesses.
One baby was even crowdfunded. As opposed to Kickstarter, the site does not have very much curation, so whatever you raise can become a reality, and you don’t have to reach your target.
4. LendInvest
A mortgage lender and property loan marketplace, LENDINVEST helps borrowers find mortgages and property loans online.
In February 2015, it debuted on the London Stock Exchange, demonstrating the maturing of alternative finance.
Moreover, this is supported by its high growth rates, which indicate this year it may lend as much as £250 million with a turnover of more than £20 million.
Further reading on crowdfunding
What are the lowest-cost crowdfunding platforms for businesses?
Learn how to crowdfund your business. and 9 myths about equity crowdfunding
5. Funding Circle
The peer-to-peer lender Funding Circle was launched in 2010 and is currently valued at $1 billion.
Following the financial crash, it fills a market gap by offering debt crowdfunders that allow small businesses to finance their projects.
Small businesses are lent £35 million every month – only £1 million is available for secured loans and £500,000 is available for unsecured loans – and the average loan amount is £60,000.
Thus, loans totaling more than £550 million have been made to UK businesses.
In total, we have lent more than $850 million to 8,000 businesses worldwide.
6. Trillion Fund
6. Trillion Fund
After the UN warned that it would take $1 trillion of investment to prevent global warming by more than 2 degrees, the Trillion Fund was formed to raise money for environmental and social causes.
7. Unbound
In collaboration with two other writers, John Mitchinson, co-founder of QI, has launched Unbound, a platform that allows the public to fund and influence authors’ works at the point of creation.
This is one of the first publishing houses in the UK to use this model, with authors pitching their ideas but book lovers providing funding.
As of 2015, it has published more than fifty books, including the best-read-aloud The Wake (Paul Kingsnorth).
Publishers like Readership and Pubslush have used similar platforms.
8. RateSetter
As of December 2013, the peer-to-peer lender RateSetter had lent over £2.5 billion, earning over £100 million in interest, and was supported by Neil Woodford.
Both parties determine the interest rate they are willing to accept when it comes to the price of a business loan, which is determined by the supply of money from lenders and the demand for money from borrowers.
9. Angel List
Startups and angel investors use Angel List, a platform for affluent individuals who provide capital in exchange for convertible debt or ownership equity.
“The platform has enabled $700 million in start-up investments since 2013, including Uber”
The UK branch of this company is still able to make a major impact both as an equity and debt platform despite limitations imposed by EU regulations.
10. Kickstarter
Kickstarter
In addition to being popular with creative entrepreneurs who are interested in getting their project off the ground, Kickstarter can be used for tech companies and service-based businesses like ckbk, a subscription service that offers users access to the world’s best cookbooks for a small monthly fee.
Currently, the firm’s £19,000 target is heavily oversubscribed.
“Kickstarter launched in 2009 with the aim to find a “new way to fund and follow creativity”
Its patronage-style rewards system led to the pledge of over $1.4billion to its projects since it was founded by Perry Chan.
3.3 million people from almost every country donated over half a billion dollars through the platform in 2014 alone.
Learn more through the Boo money
