An overview of UK Crowdfunding

Alan Scrase
21st March 2013

1
 Context
SETsquared Partnership - the Enterprise collaboration of the
Universities of Bath, Bristol, Exeter, Southampton and Surrey

Collectively supports the growth and success of new business

opportunities through spin-outs (20%), spin-ins (80%), licensing,
acceleration and incubation

Running 10 years

Raised over 1bn investment

1,000 companies created with 90% survival rate

UK has a wealth of entrepreneurial
talent

UK has lots of great ideas

Need to cultivate ideas into the next
Google/Twitter/GroupOn
Often stifled by access to Money

Google says searches for

"business plan UK" have
increased by 60% over the
past year and searches for
"small business loan" are up
by 34%
The way it is

Grants complicated and time consuming

Debt finance hard to come by
What if a large number of people lent a smaller
amount?
Venture capital difficult to find for smaller
requirements
Business angels limited investments
Typically a syndicate each investing 10k - 100k
Is there a way to have 5000 angels each investing
10?
What if anyone could become involved?
 Crowdfunding
Crowdfunding is an approach to raising the capital required for a
new project or enterprise by appealing to large numbers of ordinary
people for small amounts

Possible via the web and driven through Social Media

Crowdfunding examples
Funding Circle.com 68k UK based lenders, > 220m lent,
<1.4% bad debt
Kickstarter.com >132,000 launched projects, > $977m
pledged to-date, 44% success rate
Crowdfunding Types
Kickstarter Project Crowdfunding
Kickstarter Project Crowdfunding
Kickstarter Project Crowdfunding
FundingCircle Loan Crowdfunding
FundingCircle Loan Crowdfunding
FundingCircle Loan Crowdfunding

http://www.crowdcube.com/pg/how-it-works-4
The stages of equity crowdfunding
Crowdcube Equity Crowdfunding
Crowdcube Equity Crowdfunding
Crowdcube Equity Crowdfunding

https://www.fundingcircle.com/how-it-works#how-it-works-video
Equity crowdfunding benefits
Crowdcube to date

Success so far
Deals successfully funded

18 million 95
funded so far
187,000 >59.7k
Average amount raised members

2,400 1.9 million

av. investment FCA Authorised
biggest deal
Some challenges

Regulation

Process challenges

Post-investment

Getting the best participants

Potential returns
Regulation

Important to ensure investors are protected

JOBs Act is one option but not necessarily the best one

EU looking at options

UK FCA have started approving already

Need for more transparency and consistency across

Europe
 Post-Investment

Managing input from many investors

Incentivising investors with small stakes
Protecting investors post-investment
Voting rights
Exploring liquidity for investors
Ensuring businesses remain
attractive to follow-on funders
UK Crowdfunders

Donation crowdfunding Equity crowdfunding

www.banktothefuture.com www.banktothefuture.com
www.buzzbnk.com www.crowdbnk.com
www.crowdbnk.com www.crowdcube.com
www.peoplefund.it www.gambitious.com
www.gambitious.com www.microgenius.org.uk
www.crowdmission.com
Debt crowdfunding www.seedrs.com
www.abundancegeneration.com
www.banktothefuture.com
www.buzzbnk.com
www.trillionfund.com
www.fundingcircle.com
Alan Scrase

SETsquared at the University of Southampton

Incubation Centre Manager

a.scrase@soton.ac.uk

07825 761 652