Crowdfunding has taken off in the UK. Crowdcube launched last year, with a web based platform offering small investors the chance to make equity investments in small business. The highest package so far, £75,000, has just been confirmed for fairtrade bodycare business Bubble & Balm.
Crowdfunding brings traditional business investment together with new technology and social networking. It means that micro-investments can quickly stack-up to worthwhile equity stakes. Bubble & Balm’s investment came from 82 investors each contributing between £10 and £7,500, giving them a joint 15% stake in the business.
Sue Acton, founder of Bubble & Balm, says: “I am absolutely delighted we have achieved our target. Raising finance is incredibly tough for any small business – Bubble & Balm included – and I was really excited when I first heard about Crowdcube. The idea of pitching our business to a wide range of people, ranging from armchair dragons looking to invest £10 through to more traditional investors with thousands to invest, was really appealing. As well increasing our chances of raising the funds, I also liked the fact that the Crowdcube model fits really well with what Bubble & Balm is all about – working directly and fairly with communities and all our partners to achieve a shared success.
“I’m very much looking forward to working with all our investors as we take Bubble & Balm to the next level. Some of our new shareholders have already offered their skills as well as their cash to support our growth, and this is another huge benefit of crowdfunding – not only do we now have the investment we need to deliver against our plans, we also have a diverse team of supporters (and customers!) too.”
How it works
Businesses or projects create an online pitch and promote it through their networks. Potential investors may be customers, supporters, family, friends or colleagues. The proposition is also promoted through the Crowdcube website to a wide range of micro-investors.
There is no cost to pitch your business through Crowdcube. They take a 5% success fee if you meet your target. You can register your pitch at: www.crowdcube.com.