A short after dinner Introduction to the three main types of Crowd Funding in the UK given by Alan Scrase Incubation Centre Manager, SETsquared at University of Southampton

1. An overview of UK Crowdfunding
Alan Scrase
21st March 2013
1

2. 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

3. 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%

4. 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?

5. 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

6. Crowdfunding Types

7. Kickstarter Project Crowdfunding

8. Kickstarter Project Crowdfunding

9. Kickstarter Project Crowdfunding

10. FundingCircle Loan Crowdfunding

11. FundingCircle Loan Crowdfunding

12. FundingCircle Loan Crowdfunding
http://www.crowdcube.com/pg/how-it-works-4

13. The stages of equity crowdfunding

14. Crowdcube Equity Crowdfunding

15. Crowdcube Equity Crowdfunding

16. Crowdcube Equity Crowdfunding
https://www.fundingcircle.com/how-it-works#how-it-works-video

17. Equity crowdfunding benefits

18. Crowdcube to date
Success so far…
Deals successfully funded
£18 million
£2,400
av. investment
£187,000
>59.7k
Average amount raised
funded so far…
95
members
FCA Authorised
£1.9 million
biggest deal

19. Some challenges
• Regulation
• Process challenges
• Post-investment
• Getting the best participants
• Potential returns

20. 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

21. 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

22. UK Crowdfunders
Donation crowdfunding
www.banktothefuture.com
www.buzzbnk.com
www.crowdbnk.com
www.peoplefund.it
www.gambitious.com
Debt crowdfunding
www.abundancegeneration.com
www.banktothefuture.com
www.buzzbnk.com
www.trillionfund.com
www.fundingcircle.com
Equity crowdfunding
www.banktothefuture.com
www.crowdbnk.com
www.crowdcube.com
www.gambitious.com
www.microgenius.org.uk
www.crowdmission.com
www.seedrs.com

23. Alan Scrase
SETsquared at the University of Southampton
Incubation Centre Manager
a.scrase@soton.ac.uk
07825 761 652