Why Has Equity Crowdfunding Been Declining?

Posted on by Clive Reffell

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.

What’s Behind an Equity Crowdfunding Slump?

Posted on by Clive Reffell

It was a great pleasure to spend time last week at the EU Startups Summit in Malta. One particularly worthwhile session was a panel discussion on Equity Crowdfunding Dos and Don’ts. A panel of international experts began with a runthrough of the added benefits equity crowdfunding delivers beyond raising funds for early stage businesses to accelerate their growth. Their positivity clashed with a report on the current equity crowdfunding slump I came across on my return home.

Panellists, left to right: Mindaugas Valiulis – Policy Officer, European Commission; Grégoire Touazi – Legal Counsel, Crowdcube Europe; Nora Szeles – CEO, Tőkeportál; Christopher Burge – Co-Founder & CEO, Spark Crowdfunding; Oliver Gajda – Executive Director, Eurocrowd.

Their combined summery of added benefits included:

  1. Successful crowdfunding shows that a business (not necessarily only startups) has the support of a crowd of believers.
  2. A successful round provides social proof of a business worth backing
  3. A crowdfunding investment round can act as a catalyst to unite a community behind a business opportunity, and give them a sense of identity and stronger belief.
  4. Successful crowdfunding is good marketing – it gets a business noticed and talked about.
  5. The best retail investors will support their investments with positive word-of-mouth as they progress up the brand loyalty ladder, becoming advocates and brand ambassadors, and may also become important customers as well.
  6. Crowdfunding enables backers to meet business founders, which can lead to an exchange of introductions, and offers of insight, expertise and assistance.
  7. Each subsequent round can build on the previous one(s), as investors scale up their investments over time.
  8. Future raises have potential as private rounds, carried out exclusively among existing shareholders.

However, my return to the UK coincided with Bloomberg UK publishing an article on the current downturn in equity crowdfunding. The author wrote: “Weaker investor appetite, tough economic headwinds and a patchy success rate are making the [equity crowdfunding] model a tougher sell for both businesses and buyers.”

Data compiled by Beauhurst shows the degree of the downturn.

It got me thinking that when equity began in the UK in around 2012, there was a very low interest rate and there was very low inflation. Net Present Value calculations were hardly required when considering potential returns on investments.

Then in swift succession there was Brexit, Covid (with ‘quantitative easing’ = printing money), the follow-on global reassessment of startup values, a return of inflation, and now Trump’s deliberate destabilisation of global trading.

Aside from these global macro factors, there has been unsettling news within equity crowdfunding itself. This includes cases of businesses that had been funded through crowdfunding going in to administration, and then being bought back by the original founder who was then debt-free. Though the investments of the crowdfunding backers were wiped out and worthless. It’s difficult for investors and interested onlookers to see how this is fair. Thank you East London Liquor Company, among others. Or as they explain it, the blame should fall on HMRC for forcing the business into administration.

The UK Crowdfunding Association – formed to advance the crowdfunding and alternative finance industry – has been publicly silent, while some newspaper reader comments I came across showed the mood of disgruntled investors who responded to such reports with negativity and accusations of behaviour bordering criminality.

While platforms continue to consolidate, Eurocrowd recently commented that the ECSP Regulations intended to harmonise equity crowdfunding across the EU have failed to bring about an anticipated increase in the popularity and use made of equity crowdfunding.

Update

After originally publishing this article in April 2025, I later raised the matter on X/Twitter. My comment was picked up by Crowdfund Insider, who then published their own article on the topic in November 2025. Their answer, in summary, was: “It is a combination of factors, including questions about deal quality, risk aversion, and economic hurdles for smaller investors—such as rising taxes.”

There is also the growing level of rival opportunities for retail investors. The value of gold has risen by over 50% in the 12 months to 4 December 2025, and Bitcoin has provided investors with its usual rollercoaster of ups and downs. Casks of aged whisky and investments in works of art by up-and-coming artists are among the alternative options increasingly available today.

Is it any wonder there’s been a downturn and an equity crowdfunding slump? And where is there a voice that is championing crowdfunding as an effective means of delivering numerous other benefits on top of raising investment funds for privately-owned businesses?

Maximising ROI from BOLD Award Entries

Posted on by Clive Reffell
Three impressive award winners from BOLD Awards 2025

The gala dinner BOLD Awards VI ceremony for category finalists was held this year in Lisbon, Portugal. Among the winners, three particularly stood out to me as a lesson on how to maximise the return on time and cost of entering and attending awards programmes. Winning awards is great marketing!

BILI Social (which stands for Because I Love It) is a Canadian marketing agency that has created a marketplace where brand owners can identify and contact influencers who have a genuine affinity with their brand. BILI’s co-founder and CEO Adrian Capobianco collected the Boldest Marketplace award for himself, and picked up another two for BILI clients! They were Giuseppe Pizza which won Boldest CPG Brand (Consumer Packaged Goods), and Finish: The Torture Test Challenge for Boldest Sustainability. What could better show the benefits they provide to their clients?

…and dos Santos is a business transformation agency based in Berlin. They entered their client Deutsche Bahn, the German state rail operator, and won the BOLD Awards Boldest Future of Work category in 2023. The logo for this achievement sits proudly on their website. This year, the two founding partners Jutta dos Santos Miquelino and Ricardo dos Santos Miquelino entered their Collective Intelligence Design programme that supports client transformation through embracing collaboration and AI-enabled solutions. It won the Boldest Crowdsourcing category.

The third one that really stood out for me was three category winner FundamentalVR. This medtech startup founded by Chris Scattergood has created a surgical equivalent of a flight simulator, which allows surgeons to both advance their skills and rehearse delicate or intricate procedures. They submitted three separate entries and won three categories:
Boldest AI, for FundamentalVR itself in improving surgical performance:
Boldest AR/VR, for its work with the American Academy of Ophthalmology (AAO) to try and prevent childhood blindness through VR simulation;
Boldest Healthtech, for its collaboration with Philips to deliver economical and scalable VR training solutions.

These three very impressive service providers in their various fields of business have each worked out how to win awards on a global stage, impress their clients and collaborative partners, and bring themselves to the attention of new ones.
I’m pretty sure their strategies for success are transferable to other awards programmes – but you heard them first here.

Congratulations to all the winners, and to the other finalists and category judges who made it to Lisbon. The full list of BOLD Awards VI winners is available at https://bold-awards.com/bold-awards-vi-winners/

A Round-up of Crowdfunding Campaigns & News in February 2025

Posted on by Clive Reffell
Main image for a blog by Clive Reffell, independent crowdfunding adviser

This round-up shows the flexibility of crowdfunding for a wide range of users. They include organisations that were asking for donations, selling equity, and encouraging people to invest in community shares.

First, did you know women-led crowdfunding projects outperform men’s by success rate in achieving funding, with 20% shorter campaign completion times.

Equity Crowdfunding

Established in 2009, the made-to-order and sustainable fashion brand Wolf in Sheep’s Clothing (WISC) closed its equity crowdfunding campaign after beating its £150,000 target by 7%. The money will be used for marketing costs and new machinery.

The Smart Container Company is offering equity through crowdfunding to raise funds and accelerate the development of its smart beer kegs. IoT blockchain technology enables tracking their location and checking the temperature the contents is stored at. By February 28 the company had raised 112% of its £150,000 target with 22 days left to tun. EIS benefits (Enterprise Investment Scheme) are available for investors who are UK taxpayers.

JNCK Bakery offers low-sugar, nutritionally enhanced cookies, and recently launched in 550-plus stores across the UK. In February the fmcg startup closed an equity crowdfunding round after raising more than £260,000 to further accelerate growth.

Equity crowdfunding by Reality Games raised £1.56m to further develop an immersive geolocation and augmented reality version of the classic Monopoly board game. Players can explore their own city, trade virtual properties, and compete in global challenges.

UK healthtech startup MultiplAI Health is developing an AI and RNA-based screening test to detect earliest stage cardiovascular and complex diseases. By February 28, with 8 days left to run, MultiplAI Health had reached 71% of its £300,000 target to accelerate commercialising as a lab-developed test in the U.S. market.

Vegan fashion startup Immaculate Vegan, founded in 2019, raised £183,375 through equity crowdfunding from 114 investors. Its target was £150,000 to expand its women’s offering, build newer men’s, home, kids, beauty and pets categories, plus accelerate US customer growth.

A new night train service called “European Sleeper” has crowdfunded for a number of years and in total has raised over €5.5m from over 4,000 backers. The Sunday Times reported on one of its pilot journeys from Brussels to Venice, complete with passengers sleeping in refurbished carriages that are 50 or more year old.

Not at all such good news for investors in Gunna Drinks. The Grocer reported that the collapse of the premium soft drinks brand had left crowdfunding investors particularly angry. They hadn’t even been told the founder and CEO had stepped down last November. “Why are we always the last to know?” complained one exasperated backer.

On a happier note, two guys in Salford who have been friends since school launched The Salford Rum Company in 2018 with £5,000 of savings. Their premium rum rivals luxury gins, and they quickly raised over £314,000 from a round of equity crowdfunding. This has already beaten their £250,000 target and as from February 28 there’s still 26 days left to invest.

P2P Lending Through Bonds

British luxury home decor, wallpaper and lifestyle company, the B-Corp House of Hackney, is crowdfunding to raise £2 million by issuing fixed-interest bonds through Triodos Bank UK. It wants to buy out existing private equity shareholders and pursue its ESG commitments with more vigour. By February 28 it had raised just over £308,000 with 28 days left to run. Looks like it’s going to be a tough call. 

Donations and Rewards Crowdfunding

Bramley Baths is an Edwardian heritage treasure in Leeds, and its fundraisers gave themselves until the end of February to raise the final balance of its community shares crowdfunding target of £350,000 to repair and restore the roof, while also installing new energy-saving features. By the time the crowdfunding project closed at 5pm on February 28 it had raised £374,360 from 531 investors in 140 days.

Community shares are an opportunity for people to champion a local organisation or community asset through financial investment. Community shares are unique to co-operatives and community benefit societies, and they can’t be sold to anyone else. Also, no matter how many shares anyone buys, each shareholder gets just one vote when it comes to making decisions.

A group of anaesthetists (doctors trained in anaesthesia) claim the General Medical Council has blurred the distinction between Doctors and Associates. They are crowdfunding to afford legal action against the GMC. It had raised £176,927 by February 28, and was scheduled to run for a further 30 days.  

Aptitude Health & Fitness, a gym in Cheshire that launched during Covid, has gained permission to triple its size in new premises. In February the founder launched a crowdfunding campaign to raise £30,000 to meet some of the costs and also strengthen user loyalty. By February 28 he had raised over £17,600 with 16 days remaining.

The owners of Devon-based Sharpham Cheese, Greg and Nicky Parsons, hope their round of reward-based crowdfunding will raise £65,000 to enable them to invest in renewable energy, water recycling and new cheese making equipment.

Coming soon

In April I’ll be covering the EU-Startups Summit in Malta for Crowdsourcing Week and BOLD Awards. Two days of networking, inspiration, and learning includes 15 selected startups pitching to a panel of VCs and angel investors for funding. Find out more at https://eu-startups.com/summit/

In the meantime, if you have ideas and plans for using crowdfunding that you’d like to discuss with an impartial and independent crowdfunding adviser, please get in touch by email to [email protected].

BOLD Awards 2025 Crowdfunding Finalists

Posted on by Clive Reffell
Composite image for Clive Reffell blog on BOLD Awards crowdfunding finalists 2025

The public round of voting in the global BOLD Awards for digital industries has closed. The next stage was an assessment by a judge from an international panel, and there are six finalists in the 2025 Boldest Crowdfunding Project category. They will all be invited to attend the gala dinner award ceremony in Lisbon on Friday March 28th, 2025. Crowdfunding is one of 33 categories of digital industries and the tech that powers them, and all category winners will be announced at the event.

Beyond successfully hitting their monetary target, BOLD Awards judges were looking for projects that were particularly effective in promoting their round of crowdfunding, and projects that derived other important benefits beyond raising funds.

Here is a rundown on the six finalists, and you can use the links to check out their BOLD Awards’ entry in full.

Body Rocket

Body Rocket provides bicycle add-ons for serious performance cyclists, including triathletes, to improve the aerodynamics of not only their bike set-up but also their body position. Pre-order sales on Kickstarter provided public validation of their products, and a round of equity crowdfunding enabled customers and other retail investors to be part of the business and enjoy the ride!

Check their full entry at https://bold-awards.com/project/body-rocket/

Pashley Cycles

This Midlands-based bike maker is almost 100 years old, confirming that equity crowdfunding is not just for startups. Their crowdfunding project in 2023 accelerated development of a range of e-cargo bikes for last-mile delivery purposes, and e-bikes appropriate for public hire schemes. Their agreements with regional transport authorities, and an innovative tie-in with a large-scale residential property developer, ensured a ready market for their products. Their growing D2C sales cleverly involved introducing new owners to their dealers around the country for servicing and accessories.

See what you may learn from their full entry at https://bold-awards.com/project/pashley-cycles-crowdfunding-accelerated-development-of-e-bikes/

Neurita Tequila

Neurita is a range of fruit flavoured tequilas, at 35% ABV, designed to appeal more to female drinkers. A concerted effort by the startup founder enabled the brand to quickly win numerous plaudits and medals at international drinks trade shows. This product validation helped encourage investors to back her round of equity crowdfunding. Equally, the crowdfunding success will act as a marketing springboard to open the door to new distribution deals. Good crowdfunding is good marketing!

The full entry is at https://bold-awards.com/project/neurita-tequila/

IzyCoffee

This chain of sustainable coffee shops based in Belgium began trading just four years ago from a single vintage truck. It now has 22 ‘bricks and mortar’ outlets, and the funds generated by a round of equity crowdfunding in 2024 will accelerate opening outlets in major cities throughout the EU. Any customer had an opportunity to become a shareholder.

The crowdfunding also recruited a cohort of highly brand loyal supporters. Backers who invested higher amounts were able to become accredited Brand Ambassadors. They will provide valuable word-of-mouth support about IzyCoffee’s sustainability priorities and behaviours in the locations of both the existing stores and where a new store will open in the next couple of years.

Their entry is at  https://bold-awards.com/project/izycoffee-a-chain-of-coffee-shops/#main-menu

Prime Time

Prime Time brews award-winning, low-calorie beer in the UK. The two founders shared a passion for great tasting beer and good times. Their commitment to staying fit and leading a balanced lifestyle also led them to brewing beers that have 30% fewer calories, 63% fewer carbs, are gluten free and suitable for vegans.

Publicising their crowdfunding in 2024 was helped by having gained over 10,000 Instagram followers. A presence at festivals and other events also built brand exposure among sociable early adopters and provided opportunities to sign up new followers.

Added incentives to invest included a 20% discount off their website prices for every investor backing them to the tune of £100 or more, rising to 40% for £5,000 or more.

Prime Time’s full BOLD Awards entry as it https://bold-awards.com/project/prime-time/

ConnectionPoint

This Canadian entry is rather different from the others. This B-Corp business has launched four crowdfunding platforms that make a positive social impact.

  • FundRazr is a digital fundraising platform for non-profits, social causes and professional fundraisers.
  • Crowdfundr is a platform designed for creators to sustainably fund their projects and ideas. 
  • Cocopay enables friends and family to pay for a patient’s medical costs and quality healthcare.
  • PetFundr is a crowdfunding platform for animal and pet care for rescues, veterinarians and “pet parents.”

They also provide the backbone technology for organisations to power their own crowdfunding project with an entire advanced fundraising suite.

The ConnectionPoint entry is at https://bold-awards.com/project/connectionpoint/

Crowdfunding is diverse and flexible

Between them, these BOLD Awards crowdfunding category finalists display the diversity and versatility of crowdfunding to be applied to worthy public causes, personal needs, pre-orders to support the development of new products, and equity investment in privately-owned businesses, whether they are startups or well established businesses.

There are also several ways a crowdfunding project can be promoted to improve the likelihood of success. On top of developing innovative products and services, they include gaining industry awards; building large social media followings; achieving sales success and satisfied customers; and having lucrative corporate contracts.

Non-finalists can request a VIP Invitation to attend the BOLD Awards gala dinner award ceremony in Lisbon. It’s a unique event for networking with inspiring global innovators, disruptors and entrepreneurs on Friday 28th March. Hope to see you there!

To discuss your own ideas and plans for a crowdfunding project with an independent UK crowdfunding adviser, who is not tied to any specific platforms, start by emailing me at [email protected]. Go on, #beBOLD

An Amazing Range of Businesses Used Crowdfunding in September

Posted on by Clive Reffell

The diversity of businesses I found using crowdfunding in September demonstrate the flexibility and versatility of this alternative source of finance. They included organisations asking for straight donations, businesses offering rewards for donations, and businesses offering equity to prospective new shareholders. The sums involved ranged from £3,000 to £1.25 million. Success has been varied – some might have been popping champagne corks while others might have to look in the mirror and answer some tough questions. I wonder if any will enter the crowdfunding category of the BOLD Awards?

Straight Donations

Cumbria Wildlife Trust had raised 80% of what is needed to buy and protect a 3,000 acre wilderness of Skiddaw Forest in the Lake District. It launched a crowdfunding campaign to raise the final £1.25 million from the general public, and it had reached 85% of this target at the time of publishing this blog. A closing deadline is not visible on their project.

Strongly featured in the news in late September, AFC Wimbledon had to call off their game against Newcastle United when heavy rain caused a sinkhole to appear in their pitch. A crowdfunding page quickly gave the club’s supporters a chance to make donations, and it was great to see Newcastle United chip in with £15,000. As of September 30, the total raised had reached almost £123,000.

A Portuguese association for travel agents is asking for donations towards possible legal costs. They want to start an action against Ryanair for what they claim is “abusive commercial or legal practices.” Some may wish them “good luck.”

Rewards for Donations

A young entrepreneur in Leighton Buzzard has developed a refreshing mist spray with built-in sunscreen. Her financial target on Kickstarter was for £3,000 worth of pre-orders, though her personal aim of reaching 1,000 pre-orders before Christmas will go a lot further to providing product validation to develop her Beame business further.

Tilted Axis Press hopes to raise £75,000. Faced with cuts in arts funding, this independent London-based businesses needs to plug a gap to continue publishing translations of books written by Asian and African authors. It is offering signed copies of newly published titles and will continue to add more rewards throughout the campaign. However, it is progressing slowly and has reached only just over £8,000, though there are 27 days left for people to get behind it.

Pilgrim Brewery in Reigate is offering a range of rewards in a bid to raise £50,000 to buy new brewing equipment. This is the first stage of a complete overhaul that will see them demolish the existing brewery and build a new one to put the equipment in. In the meantime they will be able to keep brewing. The product rewards on offer (some are in the image below) represent discounts of 15% to 20% off their normal taproom bar prices. Here are some further examples of crowdfunding used by breweries.

Equity Crowdfunding

Pro Espresso beat its £110,000 target quite comfortably and raised £151,814. It’s a subscription business that allows members to enjoy top quality coffee at home. The business is supported by an espresso machine manufacturer.

Not so positive are the results for the upmarket Embers Camping holiday company. They had reached 71% of their £200,001 target with just two days left. Perhaps the recent torrential rain and flooding brought home to people what a precarious investment it could be.

No such worries for the chocolate drink specialist Knoops. They had reached their £1 million target within two days of the project being thrown open to the public. This is never a case of just good luck, it is always due to good planning and hard work in the earlier stages.

Fermtech is an Oxford-based startup that produces a zero-carbon protein that adds taste to plant-based foods. With just four days left to run they had raised £364,000, 5% above their £325,000 target for 10.82% of the company’s equity.  

MPower is a Swiss-based company hoping to raise £1 million for 9.89% equity in the business. MPower raises money from retail investors in Europe, and lends it to lower and middle income earners in Africa, plus small and medium size businesses, to acquire solar panels and electrical appliances. Access to an energy source and equipment can transform lives and accelerate the growth of a small business.

Within each of these three forms of crowdfunding, there are some similar basic rules that apply to being successful.

  • Do not go public until you have some guaranteed support that means your crowdfunding will begin with a bang and not a whimper.
  • Keep supporting your crowdfunding project on social media, and by email if you have a database of addresses.
  • Plan each stage of the project and prepare plenty of image and video content in advance.

You can follow me on Twitter to see my updates and comments on crowdfunding projects as I post them. I am an independent crowdfunding advisor with no formal ties to any particular platforms.

BOLD Awards is an international annual award programme for 33 categories of digital industries and the technology that powers them. Crowdfunding is one of the categories. Projects entered into this category should be able to demonstrate the steps taken to invite others to support their cause and help raise funding, though the winner will be a crowdfunding campaign that also delivered much more than just funding. Entries that are at least started before October 17 will miss a €100 increase in the entry fee, and they can be updated any number of times before the final deadline in December. The award ceremony for the BOLD Awards sixth edition is a black-tie event in Lisbon on 28th March 2025. Enter now – and I hope to see you there!

Crowdfunding Tips and Insights are Often Freely Shared

Posted on by Clive Reffell
Crowdfunding tips and insights shared by four crowdfunding experts

It is a very helpful that many people who have been successful at using crowdfunding are prepared to share their tips and insights. This article includes some crowdfunding tips offered by four experienced users.

Due Diligence is often problematic

John Auckland of Tribe First, which provides crowdfunding “boot camps,” shared in a radio show that information given in team biographies often delays the crowdfunding due diligence process more than any other section of the pitch. Every claim has to be evidenced, including the management team’s career history with payslips and tax returns. It’s a challenge and failing due diligence checks can significantly delay a campaign. Rather than deliberately trying to mislead anyone, failure is often because people don’t have the evidence to hand for the claims being made.

“It might sound impressive that you made 10,000 sales last month, or achieved a 300% sales growth in just one year, but can you demonstrate it? If you’re making claims like this, you’ll have to offer the platform a complete list of your sales and show your working.” Source: John Auckland on Kent Business Radio.

After publishing this article, and in his role as CEO of Seafields Solutions, John Auckland and his team went on to secure a total of £2.9 million in funding comprising equity, debt, grants, and donations in March 2025. Seafields’ primary focus is on developing offshore aquafarms to grow large amounts of biomass for carbon dioxide removal. The March 2025 total included £92,262 through equity crowdfunding from 274 investors. Seafields Solutions had also previously raised £522,859 from 683 equity crowdfunding investors in 2023.

The close attention paid to Due Diligence is corroborated by Chris Forbes, co-founder of The Cheeky Panda. The Cheeky Panda is a brand of tissues and related products made from sustainable bamboo, not paper (which is essentially from trees). “Entrepreneurs should keep in mind that due diligence is probably the most arduous part of the [crowdfunding] process. You’ll need appropriate evidence for every claim you intend to make in the pitch.” Source: Republic Europe (formerly Seedrs) case study.

Good crowdfunding is good marketing

Chris Forbes additionally shared that each of The Cheeky Panda’s equity crowdfunding rounds was also valuable for brand awareness and PR that lasted long after the rounds closed. 

The business now has over 1,800 shareholders who are also avid supporters and who continue to advocate for, and positively impact the brand.

Every one of the shareholders can be extremely helpful, which is why he ensures that every effort is made to be as communicative and transparent as possible, even after the round has closed, to make sure that no inquiries go unanswered and to take the insights of shareholders on board.

Crowdfunding’s advantages over VC funding

Laurence Kemball-Cook is CEO of Pavegen, an innovative B2B company that generates sustainable electricity from people’s footsteps. In an explanation of why he chose to use crowdfunding to raise early-stage investment, he said the terms from VCs are always restrictive. “They want board seats, control, liquidation preferences, restrictive terms on the founders – all things which don’t favour the company raising money,” he explained in an interview.

Much of this is echoed by Chris Forbes of The Cheeky Panda. “For the last round [of equity crowdfunding] we spoke to a lot of Private Equity houses but they tend to be slower-moving, and we wanted to expedite the process. We didn’t want to give up large percentages of equity, end up with a mix of equity and debt, or undergo expensive board hires which would compromise our profitability. We also didn’t want to be instructed how to spend the funds by external parties. We prefer to do things our way, and the crowd supports that.”

Have a communications strategy

Patrick Dumas is co-founder of Square Mile Farms, a vertical farming business created to bring farming to urban spaces, boosting wellbeing and sustainability. He found that crowdfunding is a very busy, stressful and distracting process. A key learning for their second round of equity crowdfunding, and one of his crowdfunding tips to make it less stressful and more manageable, is to have a clear communication strategy to follow. This included LinkedIn and email outreach from the pre-registration stage onwards. They were more organised and proactive with their communications the second time, with a schedule list to work from.

Like The Cheeky Panda, Square Mile Farms has over 1,000 shareholders from crowdfunding, and the feedback they’ve had from them is overwhelmingly positive, constructive and straightforward, Patrick said in a case study. They issue quarterly updates, and occasionally people respond to them with a lead or recommendation, which they find really helpful.

After immersing myself in crowdfunding for almost ten years I have a few crowdfunding tips and insights of my own. Please get in touch via [email protected] if you have crowdfunding ideas or plans you’d like to discuss.

How Do Money, Innovation, And Democracy Make Rewards Crowdfunding Work?

Posted on by Clive Reffell

Reward-based crowdfunding platforms such as global giants Indiegogo and Kickstarter are wildly popular around the globe. Every year, people use these platforms to transfer billions of pounds/euros/dollars to help artists deliver creative productions and content, and for entrepreneurs to develop new products and services. Though what can explain why and how rewards crowdfunding works, what motivates people to give their money?

The money is not given as charity donations. The backers obtain no financial benefits, there are no legal guarantees that their money will be used as originally described, and there are no reimbursement options. These unfavorable conditions led two American academic authors – Andre F. Maciel (University of Nebraska—Lincoln) and Michelle F. Weinberger (Northwestern University) – to ask why do so many people contribute to crowdfunding. In short, what makes reward-based crowdfunding so successful? The answers are enlightening, and are transferable to equity crowdfunding.

Key findings of why crowdfunding works

The two authors collected qualitative data from crowdfunding consumers, producers, and platforms to reveal the sociocultural underpinnings of this funding model. They found that a major part of why crowdfunding works is that platforms do more than create a technical infrastructure for consumers to transfer money to producers: they also create a mythological foundation.

Through storytelling, platforms cast crowdfunding as a route to create a more democratic society in which ordinary people (rather than banks or wealthy investors) can decide and finance the products that should exist in the market. Consumers then gladly gift their money to entrepreneurs and artists fundraising on these platforms, financing their innovation ideas interest-free. In many instances, they don’t usually receive any tangible return on their investment beyond something like a mug or a T-shirt.

Transactions replaced by social contracts

A second part of why crowdfunding works is that instead of a legal contract, crowdfunding platforms establish with consumers a “social contract” based on noble collective goals and intangible returns.

Backing a crowdfunding project comes with risks, and project backers do not receive the same protections as people buying an item from Amazon, eBay, or anywhere else.

Kickstarter gives a warning to potential project backers: “Unlike sellers on eCommerce sites, creators on Kickstarter do not automatically breach their contract with backers if they do not fulfill their rewards or provide users with a full or partial refund.” Similarly, reward-based crowdfunding backers have no recourse if creators fail to pursue or complete the innovative ideas that were their reason for asking for money.

Intangible rewards

However, in exchange for their financial gifts to support market democratisation, these project backers derive four unique forms of intangible value. 

  1. They get to express their tastes by selecting the innovations that they deem worthy of existing in the market—an opportunity that stands out from their conventional experiences as mass consumers elsewhere. This opportunity is even more significant because their tastes are often niche, patterning the immaterial value of “individualistic democratisation.” 
  2. As producers provide updates on their projects’ progress, consumers relish peeking behind the scenes of the entrepreneurial journey, acquiring the immaterial value of “insider knowledge” in their oft-niche areas of interest. 
  3. Consumers derive excitement from betting some money on the ideas of typically unknown producers. When these producers fulfill their projects and send their supporters some reward -typically symbolic tokens and an early version of the crowdfunded project – these consumers experience a “reciprocity thrill.” 
  4. Finally, crowdfunding consumers derive the immaterial value of “vicarious success”: the experience of getting a flavour of the glow of successful entrepreneurship while taking on little risk.

Reward-based crowdfunding’s main limitation

Beyond the consumer/project backers risks, the academic authors also articulate another important limitation of reward-based crowdfunding. 

For creators, reward-based crowdfunding finances many projects that would not receive bank loans or venture capital for lacking a clear profit potential, a trading history, or due to limited ambition.

Crowdfunding as an alternative means to support the creators tends to attract a specific segment of consumers: well-educated professionals involved in industries focused on producing knowledge, technology, and entertainment. These consumers tend to support projects they deem “cool.” They channel money to innovations that match their tastes, hardly ever picking projects based on the potential to broadly enhance social equality or welfare. 

Campaigns in areas such as music, film, publishing and games are more likely to succeed. Crowdfunding does finance many types of projects, but not as democratically as it first seems. 

Key takeaways

Crowdfunding has become a recognised and accepted branch of the digital economy. It is not used only by upcoming entrepreneurs and artists. Universities, museums, churches, and media organisations (including Wikipedia and The Guardian newspaper) regularly run campaigns to raise money from large numbers of people to create and enhance their market offerings. 

The Guardian newspaper part-funds itself through crowdfunding
The Guardian prefers to use crowdfunding whilst its competitors are behind a paywall

As such, this new research on why crowdfunding works is timely in three main ways: 

  • It sheds light on the consumer appeal of the crowdfunding model; 
  • it brings into relief the role of platforms in shaping the meanings of the digital economy; 
  • and it calls into question these businesses’ egalitarian claims.

Fuller research findings were published in the Journal of Consumer Research, and a version of my article first appeared for Crowdsourcing Week, where I began writing content on aspects of crowd finance in 2016.

I am an independent crowdfunding adviser, with no attachments to any specific platforms. Please contact me with an email to [email protected] to find out if I can help you with any ideas you may have of using crowdfunding. To search my blogs for other content you may find useful use the Search facility at the top right of the page.

Why crowdfunding works so well for craft beer brewers

Posted on by Clive Reffell
Why crowdfunding works well for craft beer brewers

Crowdfunding is a proven and popular way for craft beer brewers to raise money to expand or accelerate growth, or even to start in the first place. It is also a popular way for many thousands of beer drinkers to be able to say “I own part of a brewery.” Here is what I consider to be the key factors.

Funding sources for craft beer brewers

Crowdfunding is popular with craft beer brewers because there are few barriers to using it, beyond the hard work it involves. And many brewers already have a crowd of buyers and drinkers to appeal to who consume their products on a regular basis.

Bank and P2P loans are restricted to businesses that are already trading, with an income and a future order book that looks solid enough to make the repayments. An existing brewer may be able to secure a bank loan, but a new startup won’t. Banks also require guarantees against loans, and if a brewery goes bust its owners will still be liable for the debt. That’s not a comfortable feeling.

As for VCs, the craft beer sector is very fragmented with many small players. From 2018 to 2022 the number of UK brewers grew from 1,489 to 2,426.

Number of breweries in the UK from 2018 to 2022

Graph showing the number of UK breweries

             Source: © Statista 2023

Organic growth is typically slow. It can be difficult to scale fast as it is the antithesis of being a craft product. An exit strategy of an eventual sale to a big drinks company would be difficult to achieve as they have already had their pick of the crop. The Budweiser owner, AB InBev, acquired Camden Brewery; SABMiller purchased Meantime, which was local to me in Greenwich, south east London; Carlsberg took over London Fields; and Heineken acquired Beavertown, founded by Logan Plant, son of the former Led Zeppelin vocalist Robert Plant.

As well as limited opportunities to scale, many of the newcomers seeking funding don’t want to raise enough money for VCs to even consider them in the first place.

Crowdfunding is flexible

During Covid, several brewers turned to reward-based crowdfunding to ask customers for their support. Pre-Covid, the Manchester Union Brewery had relied on keg sales in on-trade outlets. When lockdown closed the pubs, they asked their community for donations to install a canning line that would enable them to switch to online orders for home delivery. Incentives to support their appeal included discounts off future purchases, shorter waiting times for deliveries, and inclusion on a “Wall of Honour.” It raised £46,141 from 617 supporters in 64 days.

This method of crowdfunding continues to be used by breweries to raise money to build or expand taprooms (which are on-site public bars). As an example, in March 2021, the Skinners Brewery in Cornwall raised £152,301 from 2,449 supporters in 28 days to build an outdoor drinking area at its site in Truro. Perks for donors included beer vouchers, tickets to exclusive events, branded merchandise and online sales discounts.

Skinners Brewery in Cornwall raised money through crowdfunding to build its outdoor drinking area

Bringing forward demand to generate pre-payment by offering beer vouchers can ease short-term cashflow issues, but has to be carefully judged so that those issues aren’t merely delayed until another time.

Many startup breweries offer shares in the business through equity crowdfunding. One running in November 2023 was Signature Brew, whose business model is to brew collaboration beers with bands and musicians. Founder and CEO Tom Bott had exceeded the £700,007 target for 4.59% equity by +25% with a few days left before the round closed.

Crowdfunding is popular with startups, but not it’s exclusively for startups. Exmoor Ales was established in 1980, and in March 2024 it closed a crowdfunding round that had raised £330,048 from 329 investors. Perks for investors included the standard branded merchandise, discounts on online orders, and a limited amount of free beer for life for larger investors as long as they remained a shareholder.

Good crowdfunding is good marketing

Running a crowdfunding campaign can generate significant media coverage and social media buzz. It serves as a marketing tool, creating awareness about a brewery and its products. This increased visibility can attract not only backers but also potential customers.

In 2023, the southeast London Gipsy Hill Brewery brewed the first carbon-negative beer without using offsets. In October ’23 they began a round of equity crowdfunding and announced their aim to be the world’s first carbon-negative brewery by 2030. The crowdfunding raised awareness of the brewery’s carbon reduction accomplishments to date and future aims. The founder and CEO was interviewed by the Sunday Times, and a television station camera crew turned up to film him at the brewery.

Crowdfunding empowers consumers

Benefits for backers

The most commonly hoped for outcome from investing in an equity crowdfunding campaign is a good return on investment. The founder of Camden Town Brewery, Jasper Cuppaidge, used equity crowdfunding in 2015 to raise £2,749,860 to build his own brewery in London. The amount of equity this involved meant the brewery was valued at around £50 million. Eight months later, having come to its attention, and seeing the extent of its public support (good crowdfunding = good marketing), AB InBev bought Camden Town Brewery for an estimated £85 million. In under a year, the 2,172 crowdfunding investors had secured a 70% return.

Successful crowdfunding does not always mean that a brewery will go on to achieve long-term commercial success. There is a risk. After 25 years the Skinners Brewery in Cornwall was forced to close in October 2022, despite its new outdoor venue paid for with crowdfunded donations.

However, small-scale investors know that a low entry cost to buy some shares can be recovered through using the online discounts that are often offered as perks. When they have saved enough money it effectively means they have reached a breakeven point and become a shareholder at no cost.

When businesses are registered under the HMRC’s EIS and SEIS schemes, crowdfunding investors who are UK taxpayers can reclaim from 30% to 50% of their initial investment. Any eventual return on investment is outside of Capital Gains Tax, or if the business sadly fails then even more of the initial investment can be reclaimed through the taxman.

Beyond ROI, sociable investors like to meet like-minded people at investor events, and can visit a brewery’s taproom bar at any other time to seek out kindred spirits.

Some investors like to invest in several breweries to create an annual schedule of perks of free or at least subsidised beer deliveries at home.

And of course there is the opportunity to drop “I’m a part owner of a brewery” into conversations.

Non-monetary benefits of a brewery having a crowd of backers

Crowdfunding is not just about raising money; it’s about helping to build a community around a brand or a business.

New crowdfunding research findings reveal that crowdfunding backers enjoy a sense of deciding which companies and products will make it to the marketplace. It gives them a tenuous link to the buzz of entrepreneurship with little personal risk – depending on the size of their investments.

I believe it’s then reasonable to consider that having contributed to the existence of a brewery, its new brewing equipment and premises, or a taproom, the crowdfunding backers will be very loyal.

Regular visitors to a brewery taproom can be encouraged to try limited quantities of new beers and give their feedback. Or packaged products could be delivered to crowdfunding backers at home. This form of product validation helps decide which new beers to take to full production.

Brewery supporters, whether investors or donors, can also be very useful as brand advocates. They can give word-of-mouth support and encourage friends and colleagues to try a brewery’s products. They may be able to provide vital business connections and make introductions, and also personally offer to provide a range of services from accountancy and legal advice to decorating offices and servicing vehicles.

To summarise, beer is a product that relationships can be built around, rather than simply regard an investment through crowdfunding as a transaction. Anyone who leaves it at just taking the money is missing a trick or two.

Crowdfunding’s popular for food and drink brands and restaurants

Posted on by Clive Reffell
Food and drink crowdfunding examples October 2023

Of the crowdfunding campaigns and related news I noticed in October there was a high proportion that were food related. This includes startup food brands and restaurants. Entrepreneurs and startup founders in these sectors have identified that as well as raising funds to invest in the business, well planned and executed crowdfunding also represents good marketing.

Crowdfunding for food and drinks brands can stimulate trial, prompt consumers to ask for them in their local outlets, and increase brand loyalty among existing users who can become investors. New shareholders can also become valuable customers in a virtuous circle that gives crowdfunding backers a strong motivation to become brand advocates and ambassadors.

Similarly, crowdfunding used by restaurants can bring forward consumer demand and have them pay now for meals they will enjoy at a later date. From burger and coffee chains to Michelin-starred restaurants, it provides customers with a talking point to recommend a favourite place to go to friends and colleagues. Perks such as limited places for cookery lessons, or even meals prepared by chefs in crowdfunding backers’ own homes can deliver a wow-factor to make the backers feel special, and once again give them a talking point.

Crowdfunding backers also have the chance to get to know about the people behind startup food and drink brands, and restaurants, and maybe identify with their broader aims from an increasingly ESG or community asset perspective.

Crowdfunding by Restaurants

Chefs Lewis Dwyer and Andy Aston opened their independent Michelin Star restaurant called Hiraeth in Cowbridge, Wales, last November after raising £30,000 of reward-based donations through crowdfunding. They now need new premises after the landlord unexpectedly decided to sell the property.

Chef Merlin Labron-Johnson had already beaten his £125,000 crowdfunding target with 10 days left to run. He was raising money to relocate his farm-to-table restaurant Osip 2.0 in Somerset. His crowdfunding went on to achieve £166,261 from 464 backers to help bring this project to life. As perks, he offered branded restaurant crockery, chocolate cookie tasting sessions, hampers of mixed goodies, lunch and dinner at the restaurant for groups up to eight people, and home cooked meal for fifteen, and tickets for an exclusive opening night party.

Equity crowdfunding by London-based Honest Burgers’ closed after raising almost £3m. The casual dining restaurant group soundly beat its £1m target, raising £2,905,631 from 3,456 investors. It will now open further restaurants and launch a new quick-service burger.

Founded in Barcelona in 2020, startup coffee chain GoodNews is soon launching a round of equity crowdfunding after three previous seed and Series A funding rounds, which have already raised €15m (£13m). Good crowdfunding can be good marketing and attract loyal customers.

Startup founders Florin Grama and Felix Ortona Coles met while working at St Barts restaurant in London’s Smithfield Market area. In October they began reward-based crowdfunding to raise £20,000 for the final pieces of equipment they needed to open their Tarn Bakery in Highgate. Perks include classes to make croissants, sourdough pastry and pasta. By October 29 they had reached £15,242 with eight days left to run.

Crowdfunding by food and drink startups

With the growing demand for minimally processed and natural plant-based food, Tempeh brand Better Nature has launched another round of equity crowdfunding as part of a £1 million-plus raise to drive retail growth for its meat alternative range across the UK and Europe.

Hertfordshire-based SRSLY Low Carb has signed an agreement with a food distributor that services leading supermarket chains in all 50 US states. To support global growth, SRSLY is embarking on a seven-figure equity investment round which includes a round of equity crowdfunding in November with a minimum target of £500,000.

Earlier this year, craft beer maker Gipsy Hill Brewing in southeast London launched the world’s first carbon-negative beers, achieved without relying on carbon offsets. A new crowdfunding campaign in November will help them accelerate their climate-positive agenda. The brewery ran its first equity investment round in 2022, in which 581 investors joined its community and invested £865,149, 130% above Gipsy Hill’s target.

A former City analyst founded the Cheesegeek food marketplace platform in 2017 to connect artisan cheesemakers with consumers. Edward Hancock now hopes his equity crowdfunding campaign in November 2023 will raise £150,000 so he can start a forum for cheese fans, with investors invited to develop a new variety.

French plant-based food brand La Vie closed its equity crowdfunding in October with 2,691 backers investing €2.1 million. La Vie, whose UK headquarters are in London, used the Crowdcube platform which through its Barcelona office is authorised to run crowdfunding campaigns throughout the EU as well as in the UK. La Vie’s multi-award-winning plant-based alternative to bacon is available in 13 European countries. The brand claims to have so far saved over 90,000 pigs and 2 million tonnes of CO2.

Considering crowdfunding?

If you are thinking about running crowdfunding, and in any sector, not just crowdfunding for food brands, the most common mistake is to not allow enough time for preparatory work. This can include building larger networks of followers, and for those considering equity crowdfunding the platforms will require you to have lead investors prepared to guarantee a minimum of 30% of your target raise.

I am an independent crowdfunding strategist and adviser, unattached to any particular crowdfunding platforms. Please get in touch for objective advice and insights into your plans, and maybe hands-on support if you decide you want it. Send an email to [email protected] to get started.