A new crowdfunding and Seed Enterprise Investment Scheme (SEIS) hybrid ticks all the boxes for entrepreneurs and investors.
Crowdcube’s sprint program aims to provide rapid finance for startups already pre-approved by HM Revenue & Customs (HMRC) for SEIS.
The crowdfunding platform is designed for entrepreneurs looking for between £20,000 and £150,000 in startup cash.
The first company to dash to success through the sprint program was The Pressery, which produces almond milk drinks.
The firm hit a £100,000 cash target in less than two hours, with 58 investors pitching in for an equity stake. The largest investment was £30,000.
“The Crowdcube pitch could not have gone any better for us,” said Natali Stajcic, of The Pressery.
“The program appealed to us and helped us reach the next stage of our business plan very quickly.”
The sprint program comes on the back of official statistics compiled for the Department of Innovation and Business (BIS) showing how crowdfunding has grown over recent years.
Date research firm Beauhurst crunched the numbers to reveal:
- Entrepreneurs are increasingly turning to crowdfunding to raise cash – from just 2% of crowdfunded deals in 2011 to 18% in 2014
- Although startup crowdfunding is popular with businesses with nearly a third seeking funding on a platform in the first six months of 2014, the crowdfunding share of the startup investment pie is small – amounting to just 2.2% of total equity investment in the UK during the same period
- 91% of crowdfunded investments do not pass the £500,000 barrier and 97% are less than £1 million
“Crowdfunding is building up a head of steam and funding platforms are sealing more equity deals every year,” said a Beauhurst spokesman.
SEIS tax advantages
“The trend does not seem to show any signs of abating and we predict around a fifth of seed stage companies will look to crowdfunding platforms to raise money in 2015.”
The Crowdcube sprint program is very tightly aligned with SEIS, so offers backers all the advantages of the scheme’s tax incentives.
The platform has a pool of 150,000 active investors with an interest in seed stage funding.
“We want to make the process of raising startup cash even easier for entrepreneurs who are striving to find the cash to turn their ideas into reality,” said a Crowdcube spokesman.