Crowdcube Archives - Comanche Comms

Crowdcube raises over £5m for itself

Posted on July 19, 2016February 13, 2017 by Clive Reffell

Before yesterday, UK equity crowdfunding platform Crowdcube had raised more than £173m from over 295,000 investors to complete 426 successful raises, and described itself as the world’s leading investment crowdfunding platform.

Yesterday afternoon that status was confirmed as Crowdcube exceeded its £5m target when they raised £5,003,024 for themselves from 1,627 pre-registered early investors useful source. This was their largest ever raise, and in the early hours of 19 July the total stands at just over £5.8m from 2,243 investors and they are still open for further business.

This initial target of £5m was set against 7.14% equity, valuing Crowdcube at just over £70m. Very handy for the co-founders Darren Westlake and Luke Lang – well done guys. A stretch target for over-funding could see up to a total of £12m raised.

Fundraising moves to Stage 2 today (July 19) when Crowdcube will open their doors to investments from the general public who will no doubt be suitably buoyed by yesterday’s strong performance.

In total, would-be investors apparently indicated an early interest in buying £50m of shares in the company. Crowdcube is believed to be setting up a secondary market where successful purchasers will be able to trade their newly acquired shares. If they do, then given that demand appears to exceed supply by a factor of over four there could be some early ‘stag market’ sales to deliver quick returns. So much for Brexit reducing enthusiasm for equity crowdfunding.

Plenty for crowdfunders at London’s ‘The Business Show 2015’

Posted on December 7, 2015 by Clive Reffell

The Business Show 2015 on December 3 and 4 in London provided great opportunities for aspiring crowdfunders to check out several aspects of what’s involved.

On the topic of business start-ups, Daniel Murray spoke about raising £2m to launch online fashion shop Grabble without previous fundraising experience, and some of the important lessons he learned along the way. Like no matter how clever he thought he’d been in his advertising job he quickly realised that he knew next to nothing about running a business, and that there was possibly something to learn from everyone he met. This included leaving every meeting with the name of at least one person who might be able to help him.

Also on the subject of start-ups, Nidhima Kohli, founder of online beauty products site My Beauty Matches, talked about how she built from nothing a community of 85,000 people. Big lessons from her also included the personal sacrifice necessary to build a successful business, which involved quitting her job, renting out her flat and moving back in with her parents. Nidhima also strongly recommended working with students hungry for work experience rather than burning money using agency advisers

Three different aspects of crowdfunding were represented at the show. Bill Morrow, CEO of Angels Den, explained that angel investors are often looking for fun reasons to get out of bed in the morning rather than focussing exclusively on their return on investment. Expect mentoring involvement from Angels Den investors, know how much money you need and what you are going to do with it so that you give a good pitch, and also show some good social skills when you pitch to them so that investors want to work with you on a personal basis.

A different ‘money only’ option is provided by the investment loan platform Funding Knight. Chief Exec Graham Marshall explained it matches multiple lenders – not investors – with borrowers. This means lenders are able to diversify their investment loan across numerous businesses, and they can also benefit from a secondary market to trade investments as they have fixed, known returns. And the people seeking investment can retain their equity.

In between these two alternatives is Crowdcube, the world’s largest equity crowdfunding platform with 52% of the UK market. Head of Equity James Chalk explained that earliest investors in equity crowdfund projects are often quite small-scale, though when enough of them have created momentum behind a crowdfund project it is not uncommon for serious high net worth individuals to then step in with significant investments in which they may want to take an active interest. 19% of Crowdcube’s registered investors earn over £200k p.a., and HNWIs have been responsible for 59% of all the money invested through Crowdcube since it started in 2011.

Other important issues for crowdfunders included protection of Intellectual Property through copyright, registration and use of trade marks. This is all very valid if you’re going to essentially post a business plan online for people to decide whether or not to invest in you and your idea.

There were further lessons for deciding on items to offer as crowdfunding perks from a branded merchandise supplier. Thank about what’s memorable and relevant, allows good quality at an affordable price, is going to be useful to people and will last long enough.

Acquiring contacts and driving enough of the right types of people to an online crowdfund project is the core basis of success or failure, and the most popular seminars were any that offered to explain how to put together an effective social media strategy. Relevant presenters included Kristian Downer of DowSocial.

Finally, it’s well known that anyone trying to put together and run a crowdfunding project on their own has the odds stacked against them. A team of people almost always gets better results. And Alastair Cook, captain of the England cricket team, made an appearance to draw some parallels between leading teams in business and in sport. When things get tough – and inevitably at some stage of crowdfunding they will – believe in yourself as a leader and dig-in rather than pack it in. And when your team is under pressure it’s vital that everyone keeps putting in their fair share of contribution, no ifs, no buts, no excuses or cop-outs.

This collection of issues to consider shows how complex putting together and running a crowdfunding project can be. If you think you could benefit from independent crowdfunding advice, whether for equity or donations-for-rewards crowdfunding, then please get in touch: [email protected].

Equity crowdfunding hopefuls and ten tips from successes

Posted on November 23, 2015March 15, 2017 by Clive Reffell

This month I enjoyed a week in which week I met nine entrepreneurs at different ends of the equity crowdfunding spectrum. Six were seeking investors, three were sharing tips on having achieved successful results. The willingness to share experiences and support each other is a very positive characteristic of the crowdfunding sector that helped me decide to specialise as an independent crowdfunding adviser. And those tips apply just as much to donations-for-rewards crowdfunding as equity projects.

Investors and business development advisers critique crowdfunding hopefuls

The six entrepreneurs ready to trade equity for investment presented to a panel of four advisers and an audience of over a hundred people gathered in Whitechapel, London E1. The audience included several potential investors plus other people who were planning how to conduct their own equity crowdfunding to launch or develop their businesses.

The meeting with the successful users of crowdfunding was organised by equity platform Seedrs and held in a function room at Camden Market, London NW1.

The Hopefuls
Here is a brief summary of the six companies and the diverse business sectors they operate in.

In Your Stride, founded by Shaun Lancaster, is a smart adaptive coaching platform. It matches runners’ individual abilities with a database of over 20,000 events to create a custom training plan that adapts with progress. It is compatible with a range of wearable technology for easy use. It is available through a personal subscription, and also supported by charities that stand to receive more sponsorship income if people running in events on their behalf achieve better results. In Your Stride has exceeded its £100,000 target on Crowdcube for a 15.8% stake in the business.

Unis Learning provides HR departments with the means to test the aptitude of potential employees and thus place them in the most productive roles compatible with their inherent talents as well as academic qualifications. They wanted £150,000 for 20% and would seek further investment two years on.

Leeds-based Perks Loyalty, represented by Commercial Director Whaleed Shihadah, enables local traders to co-operate and utilise electronic customer loyalty cards. It empowers the traders with affordable technology to build and maintain business traffic through customer tracking and dynamic and adaptable benefits. Perks Loyalty is currently seeking £130,000 through Crowdcube for 8% of the company. One of the panellists thought they weren’t seeking enough to establish themselves firmly in their competitive marketplace.

Two bespoke high-end men’s tailoring companies, Daniel & Lade and Edit Suits Co., utilise the benefits of electronic 3D imaging and laser cutting to create quality clothing at a fraction of the cost of traditional suppliers. Both want extra money fast to develop ahead of the me-too competition in this obviously highly competitive business sector.

Colony is a new management software tool to manage increasing numbers of staff working remotely. It helps new office-based companies set up without the need for as much office space as traditional businesses, if any at all. They want £450,000 for 20% and in 12 months they will be seeking further investment.

What all six have in common is harnessing the latest IT, developing its use to provide tangible customer benefits, and trying to raise funding to move faster than inherently slower existing competitors tied to older methods and perhaps dated software. If you have a business idea along these lines then perhaps you’d like to get in touch with me and we can explore the opportunities and benefits that equity crowdfunding could deliver for you.

The successes
The three successful equity crowdfunding users had all used the Seedrs platform.

Shaken Cocktails raised £118,690 for 9.43% equity in March 2015
Incubus is a business incubation service for start-ups provided on a converted double-decker bus. They raised £53,770 for a 15.95% stake in July 2014
Brother Cycles make bike frames and builds custom bicycles for their customers. They raised £125,880 for a 16.22% stake in the business in July 2015

Ten tips the three companies offered.

Thorough planning and preparation is vital. Decide on who (the types of people) you want to tell about your offer, create in advance what you’re going to tell them (the content), and plan when to tell them (don’t overload demands on your own time by telling everyone all at once, stagger it).
Examine projects by other equity crowdfunding users in your business sector. Check for opportunities through your platform provider to identify and contact backers with a relevant investment history.
Build your own networks of relevant people for as long as possible before going live. Every person you have ever met is a potential investor! This crowd-building includes making professional media contacts to ensure a good response to press releases in your local area and sent to relevant trade/business sectors.
Pre-sell to your closest contacts and supporters so that you can count on at least 30% of the funding arriving in the first few days. This gives the project vital momentum and reassures other would-be investors.
Ensure you and your support team have adequate social media skills, or have a budget to access some.
Crowdfunding can be a fulltime role. Organise your day job, maybe by taking on temporary support, so you have the time to answer questions, send out information, and personally meet prospective backers. Don’t forget – people invest in people, get out and meet some investors.
Set weekly targets to monitor progress and check that you are doing enough, and establish what’s working well and what isn’t.
Make it easy for investors to tell their own networks about your investment opportunity, provide them with content.
Be flexible to accommodate other opportunities that arise, such as offers of retail distribution.
Invest some time on your new backers because they could turn in to important brand ambassadors for your business.

In short, you will need soft ‘people skills’ to engage with potential investors; an ability to segment audiences and identify key prospects; skills to harness the power of the written word; social media skills; an easy to deliver and understand SMART business plan (Specific, Measurable, Achievable, Realistic, Timetabled); a budget to bring in any of these skills and any other requirements as necessary (such as video production, temporary office support staff); a campaign plan with KPIs; a campaign manager to oversee everything if you don’t have the time. These requirements are just as important for donations-for-rewards projects.

Or contact me, an independent crowdfunding adviser, at [email protected] or on 07788 784373.

Crowdfinders Live, a top all day crowdfunding conference

Posted on October 16, 2015October 18, 2015 by Clive Reffell

Over 400 people booked their place at Crowdfinders Live (#CFLive) held in London on 15 October 2015. A blend of personal and company investors, entrepreneurs seeking funding and crowdfund platform providers spent the day networking and hearing industry updates, panel discussions of topical issues and some live pitches from companies seeking equity funding. This is not a summary of the whole day, it’s selected items that resonated most with me personally.

Will Broome, a respected figure in the events and hospitality industry and creator of londonlaunch.com in 2001, had the role of MC. In his first of several entertaining sessions at the microphone he reckoned that having a good idea made up about 1% of a successful crowdfund project – 99% being hard work! This was a comment I used in one of several tweets during the day (@Cliveref) which were shown on the big screen behind the speakers and panellists.

Nicola Horlick, CEO of Money&Co, a person-to-business lending platform, was the first speaker. Banks are generally still not lending to SMEs, in part due to recent rules on bank capital requirements to support their amounts on loan. So there is a demand for business loans and through its high net worth clients who are looking for good investment returns there is a source of funds available through Money&Co. There is the risk of business failures among start-ups, though the latest average gross annual yield for Money&Co investors is 9.1%. For those of us of more modest means, a new Innovative Finance ISA will allow individuals to invest up to £15,000 a year in loans to small businesses in a tax-free wrapper.

Next speaker was Christian Mouyesset, co-founder of Hummus Bros which raised £500,000 this year (against an initial target of £250,000) through equity platform Seedrs. He stressed the importance of pre-selling to guarantee some early funding to give a project momentum. Whether it’s for equity or donations crowdfunding, empirical evidence shows that successful projects receive 30% of target within the first few days. This gives strong encouragement to others who may be thinking about investing or donating.

Kiki Loizou, Small Business Editor at The Sunday Times, chaired a panel session covering topical issues in equity crowdfunding. Sound-bites included:

A lingering unresolved issue is how new companies go about establishing a credible valuation figure – some are simply outrageous. Julia Groves, Chair of the UK CrowdFunding Association said investors should just reject those projects, so that the marketplace would cultivate responsible behaviour.
Case studies of failed projects as well as success stories should be examined to identify common reasons for failure to reach target. I tweeted whether doing this and making the results easily available should be within the remit of UKCFA?
There are people looking to invest more money than is required by current good opportunities.
To encourage continued growth, perhaps there ought to be case studies from an investor perspective as well from the companies that receive funding. Another UKCFA task?
Equity crowdfunding is maturing fast, though perhaps more should be done to educate potential small-scale investors about possible risks and the length of time they may have to wait to cash out their investments.

In a second panel session, Michael Wilkinson of CrowdCube repeatedly stressed how important it is for crowdfund project owners to understand the need for effective marketing to drive a big enough crowd of the right type of people to their project. This is a very good piece of advice that was also identified by business think tank Nesta as often being a bit of a problem, which I pointed out to conference delegates via Twitter.

The afternoon session showcased 15 minute pitches from seven fund-seekers.

David Brabham, several times winner of the Le Mans 24 Hour Race and son of Formula One champion Sir Jack Brabham is using crowdfunding as part of his plans to revive one of the most famous names in international motor racing.

Kelvin Mackenzie (right), formerly editor of The Sun and owner of talkSPORT radio station, is raising funds for his price comparison site A Spokesman Said. The site also champions the consumer rights of ‘little guys’ who believe they are being bullied or ignored by big companies.

Former TV Apprentice challenger and qualified lawyer Lauren Riley (left) wants £150,000 to develop TheLinkApp, a version of WhatsApp designed for the legal industry to improve both their profitability and their clients’ quality of experience.

Husband and wife team Rufus and Charlotte Pearl already have a thriving business selling their Pink Lining brand products to the Mother and Baby market. In the UK they are stocked in 300 stores including Harrods. They are also stocked in Paris, New York and Tokyo, and are big in South Korea. They want to expand further. Strong social media networks are vital for crowdfunding success , and they have a customer database of over 100,000 people and 55,000 Facebook fans.

The other pitches include a dog-sharing website called Borrow My Doggy, a UK based asset management company called Alquity which invests in sustainable ethical projects in Africa, and Mayfair Brands. Mayfair Brands has achieved national USA distribution for their high quality gin, vodka and rum produced in Clapham, London. Now they need investment to create the stock levels needed to soon meet the American orders.

And Mayfair Brands products were available in the post-event party where I got together with several other delegates, some of the speakers and panellists, and Luke Davis (pictured on the left), CEO of Crowdfinders who organised the event.

If you want to discuss your own thoughts or plans for crowdfunding with a specialist independent adviser then please send me an e-mail to [email protected] or call me on 07788 784373.

A high octane evening of crowdfund investment opportunities

Posted on June 29, 2015May 10, 2017 by Clive Reffell

It had all the ingredients for a heady cocktail of modern-day wheeling and dealing. Nine entrepreneurs seeking equity or loan investments through crowdfunding. Each giving quickfire three minute pitches followed by a couple of questions from a Crowdcube convenor in front of an audience of around a hundred people. These were potential investors and some would-be entrepreneurs who had come along to get a flavour of the occasion before they go under the spotlight themselves. And it did not disappoint.

It was one of Crowdcube’s regular monthly events that allow registered investors and investment seekers to get together in person for some important discussions. The funding seekers were spread around a few tables in a meeting area, some with samples of their products. Potential investors and the simply curious began to appear after 6.30 pm.

Among the refreshments available was a Grind stand. Grind is a small group of espresso and cocktail bars that provide “beautiful spaces in London for eating, meeting and drinking. Their strong, bitter coffee cocktails with Icelandic vodka and Kahlua coffee liqueur were a new take on the classic Black Russian. They are seeking £750,000 through bonds that will pay 8% interest over four years.

Is Joe Inglis on to a winner with a website, Qtsy, aiming to become a favourite for pet owners? They can post photos of their own pets, and vote on others. Votes win points and points mean prizes. Joe is after £150,000 for 12.5% equity.

As a cyclist who has suffered from the actions of errant motorists (and an impatient passenger in a traffic jam) the Lumo Clothing proposition has strong appeal. Doug Bernier is targetting £200,000 investment for 14.29% equity in his company that produces washable bags and jackets for cyclists with built-in powerful LEDs to give added accident-avoiding visibility. This is clothing and accessories designed for the places you’re going to, not the archetypal cyclists’ bright coloured and skin-tight garb. You could wear it in Grind and feel at home.

It may seem unfair not to mention the other projects seeking funding but I want to give you a flavour of the evening, not a blow-by-blow account of the whole proceedings. Though here is a line up of the entrepreneurs using this democratic source of securing funds to achieve their business aspirations.

Left to right: Doug Bernier, Lumo Clothing; Hasan Mustafa, Collar Club; David Abrahamovitch, Grind; Richard Berkeley, Linkz; Joe Inglis, Qtsy; Alex Holland, Brew; Mark Aspinall, Extremis Technology; Sokratis Papafloratos, Togethera.

Crowdcube does not allow questions from the crowd following the quickfire presentations. So you have to stay at the event and find the people you want to talk to. If you have any interest in raising money through crowdfunding, even if it’s on a donation basis rather than equity or loan, checkout how to attend on the Crowdcube website and get along to the next one. It will show you how high the professional bar is set to be a winner in this competitive arena. And if you want help or guidance with any aspects of crowdfunding, please contact me, [email protected].

Crowdfunding London 2015 – brilliant one day conference

Posted on April 24, 2015March 15, 2017 by Clive Reffell

The Crowdfunding London (#CFLondon) conference on 23 April 2015 served up a feast of information and inspiration for over four hundred people in The Crystal building at Royal Victoria Dock, East London.

The diverse nature of attendees spanned the full range from significant investors and business leaders running some of the biggest crowdfunding websites to individuals with a somewhat vague idea of a start-up business they want to launch.

First speaker was Luke Lang, CMO and Co-Founder of Crowdcube. Crowdcube is the largest of the UK crowdfund companies that enables funds to be raised in exchange for company equity. Their growth is representative of the whole industry. In total, 230 organisations have used them to raise £80m since 2011, and the industry is growing so fast that projects hosted by Crowdcube have already raised £20m in 2015.

Whilst crowdfunding may have started largely with attempts to raise relatively small budgets to launch start-ups that banks or other traditional lenders would not go near, the biggest individual amount raised on Crowdcube is £3.7m. The average investment made is £2,500, and the largest individual investments have been £0.5m on two occasions.

Luke’s two key pieces of advice to anyone who wants to raise an investment budget through crowdfunding are:

Work extensively on your own network of personal and business contacts. If you can’t convince them you won’t convince anyone else. And get them to make their investment as soon as possible because early support and momentum attracts other investors who don’t already know you.
Don’t forget that it’s all about delivering returns to investors and treat them with respect.

Next up, an expert panel chaired by the Sunday Times Business Editor Kiki Loizou discussed factors that have contributed to crowdfunding’s spectacular rise in the UK.

Banks are reluctant to lend to small businesses, particularly start-ups with no assets
The growth of a stronger UK ‘entrepreneur culture’, and thus a demand for business investment
Low returns for investors from traditional opportunities
A ‘light touch’ by the financial regulators
Ease of use and trust in e-commerce
The democratisation of two-way communications with big companies through social media
The rise of popular online ‘sharing’ businesses such as Airbnb and Uber

People want to use the internet to do more than post personal content and maintain contact with friends and family, make purchases and let companies know what they think of their products and service levels. They are now ready to be part of something more solid. And it’s easy to build an investment portfolio. After a few clicks anyone can say they are a shareholder in a brewery, an ecological project or whatever else they choose. Crowdfunding has democratised being an entrepreneur or an investor.

Nicola Horlick, the international investment adviser once described as “Superwoman” for her skills balancing global business responsibilities and family life, brought heavyweight gravitas to the afternoon sessions. Her own crowdfunding company is Money & Co though she pointed out her ‘crowd’ was not a large number of people. They are a select group of seriously high net worth individuals looking to make equally serious business investments (known as peer-to-peer lending).

To the previous reasons for the popularity and success of crowdfunding she added:

Fees to meet with financial advisers have created a new type of independent investor
Medium size businesses are vital to the recovery of the national economy because they employ 50% of the UK workforce, and maybe this has influenced the ‘light touch’ of the financial regulators

Business celebrity Michelle Mone, founder of the Ultimo lingerie brand, gave a very personal account of her life from a 15-year-old unqualified school leaver to founding a global brand and receiving her OBE.

It was all here. The battles won by her personal drive to overcome doubters and break through the constraints of other peoples’ limited expectations of her. Creating stunts to achieve £multi-million media coverage. Breaking in to the American market through sending samples to Hollywood film set wardrobes. Then being swindled by her American distributors who robbed her of 10 months’ stock and £1.4m. Yet never giving in, never accepting “No”.

It was inspiring and punctuated with spontaneous applause. Thank you, Michelle.

The final session of the day was a guest panel of speakers being honest enough to admit some mistakes they had made in a quick-fire round of How NOT To Do Crowdfunding. I have been helping a project I found already being run by the Steam Tug Brent Trust. Their aim is to raise funds to restore the last steam powered tug, called the Brent, which had worked in London’s Docks. My sincere thanks to them for allowing me to go on stage and share some points with the audience about what could have been done better.