In November 2025 I posted a question on my X account that was prompted by the apparent declining popularity of equity crowdfunding in the UK. Data company Beauhurst had tracked the number and total value of equity crowdfunding projects on an annual basis. Crowdfunding Insider picked up on my initial question, and clarified the decline in their own article: “The number of online securities offerings dropped to its lowest level [in 2024] since 2014. In 2021, investment crowdfunding peaked at 569 funding rounds. In 2024, there were just 297—almost half as many. The amount raised is also heading down; in 2021, £773 million was raised online, and only £324 million in 2024.”
It continued a theme I had started in April 2025, and I want to take a few moments to share what I believe are key reasons for the decline.
End of Low Inflation and Interest Rates
When Crowdcube and Seedrs (now Republic) started in the UK we were experiencing a period of almost zero inflation. The Net Present Value calculations of my Open University course seemed hardly necessary. It was more straightforward to assess a pitching company’s financials and reach a decision to invest, or not. It was also far cheaper to borrow money, if that’s what anyone wanted to do to make investments.
The return of both inflation and higher interest rates has complicated the equations. This is particularly clear when looking at return rates on debt crowdfunding (P2P lending).
Low Levels of Investor Success
Luke Lang, co-founder of Crowdcube, once said that the key measure of equity crowdfunding’s success was not the sums raised by startup business founders, it should be the returns enjoyed by investors. Without a base of retail investors it cannot work.
Equity crowdfunding is a high-risk investment. The FCA advises that nobody should have more than 10% of an investment portfolio in high risk sectors. Nevertheless, success stories appear few and far between. Early investors in Revolut, for example, include a number of paper-millionaires. If only – they wish – Nik Storonsky would buy back all their shares, or let them be sold on secondary markets.
A dozen UK investor success stories are in an article I wrote for the Crowdsourcing Week platform. That’s less than one per year since Crowdcube and Seedrs launched.
Alternative Retail Investment Opportunities
These are easy to find. Gold has risen by 65% in the past 12 months. Bitcoin began the year at $94,000 and finished it around 7% lower. In between, it edged at one stage above $120,000. These investments are more liquid than equity crowdfunding, and independent valuation data adds transparency.
This year I have been contacted by people encouraging me to invest in artwork by up and coming artists, and in casks of whisky and property developments. Investments in such sectors are far more opaque, but it doesn’t necessarily mean equity crowdfunding is regarded by everyone as better or safer. This has contributed to the equity crowdfunding decline.
Lack of Trust and Transparency
Crowdfunding investors have plenty of right to feel aggrieved when they see the companies they backed go into Administration, and then are bought again by the original founder(s). Debts are written off, including crowdfunding investments.
It has happened to me. Although it is still trading, I did not make an effort this year to gift anything produced by the East London Liquor Company, or visit the distillery restaurant or bar. Investor discounts were not maintained. It is a true case of “all I got was the lousy t-shirt.”
I have seen newspaper reader comments when cases have been reported of original founders buying their business back from administrators. Accusations of theft and fraud are some of the milder comments. And there is always some input from the “I told you so” brigade who perhaps find glory in never taking a risk.
Who Speaks Up For Equity Crowdfunding?
The expected champion is the UK Crowdfunding Association. It was formed in 2013 with the purpose of promoting the interests of crowdfunding and alternative finance platforms, their investors, and clients. A section of its website is for Case Studies. In over 12 years of its existence it now has two.
If anyone from UKCFA reads this, I’d be very happy to help get the Case Studies up to a much more respectable level that demonstrates the multiple benefits, effectiveness, and flexibility of crowdfunding in a manner more appropriate to your mission.