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World’s first crowdfunding website launched

document Crowdfunding, Distributed Knowledge

University of Exeter-based Crowdcube, has launched the World’s first crowdfunding website which enables ordinary people to buy shares in start-up and growing businesses and offers equity in exchange for investment. Crowdcube aims to make access to finance easier for entrepreneurs of newly formed and growing small businesses. Instead of competing for limited business angel or venture capital funding, start-ups can use Crowdcube as a platform to connect with a nation of ‘armchair dragons’ to find investment. “The task of securing business investment is notoriously difficult. Banks adopt a no-risk approach to lending while business angels and VC funding are difficult to access,” said Darren Westlake, co-founder and managing director of Crowdcube. “We are democratising an age-old model for raising business finance by empowering the ‘crowd’ to pool small amounts of investment money and give Britain’s start-ups a much needed boost. Crowdcube is the next generation of business investment.” A similar idea has previously been applied to the music industry, with Dutch-German website Sellaband, having successfully used crowdfunding to enable a number of underground or unsigned artists to raise money in order to finance an album. Crowdcube offers entrepreneurs the chance to showcase their business and investment potential to thousands of micro-investors by uploading a ‘dragons’ den’ style video pitch, images and supporting documents. Spreading the word about a pitch is made easy via Facebook, LinkedIn and Twitter sharing links on their dedicated Crowdcube webpage. People can support an idea, person or business by investing small amounts of money – from as little as £10 – in exchange for shares in the business.

Summary Crowdcube is a new crowdfunding website that hope to act as a meeting point between entrepeneurs that are seeking investment and "funders" that have the necessary financial support to do so. This removes the obstacles most entrepreneurs face when they are looking for funding options from banks, angel investors and venture capital.

Description Crowdcube is not exactly "the world's first crowdfunding" website, but they do adopt a unique approach towards crowdfunding that could give supporters more value for their wallet. Instead of funding and then leaving as most crowdsourcing platforms do, supporters will have the chance to attain shares in the company that they invest in. This not only stimulates more interaction, but enables "funders" to see that crowdfunding is more than just clicking "enter" after filling in their credit card details!

Tags: Angel Investment, Crowdfunding, Venture Capital

Posted by Ruth Baxter

Mar 10, 2011 11:08 pm GMT Viewed 3115 times

Author: The Drum Source

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