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Crowdfunding: Managing its way through Brexit

The Bank of England revealed in November that it expects the level of business investment in UK to drop by around 25 per cent by 2019 relative to its pre-referendum forecasts. The British economy has shifted since 2016 from being the best performing of all the G7 Nations to the worst. Confidence has been shaken, productivity has slowed and business is uncertain about the future.

Yet in the face of this, Crowdfunding continues to grow as businesses recognise the multi-layered opportunity that it gives brands. New investors are flocking to platforms like Crowdcube, wherein Q1 of 2018 a total of £21.2 was raised by 32 successful companies. Crowdcube is comfortably the largest platform in the UK, with 520,000 members, but this growth is reflected by other platforms such as Seedrs.

So why does Crowdfunding continue to grow?

Equity Crowdfunding gives entrepreneurs the opportunity for quick capital. Crowdcube have found on average companies receive funds in less than 3 months after their initial registration. This allows businesses to quickly move forward with growth plans and progress to the next stage. 

Brands that successfully crowdfund also gain a large customer base and an army of brand advocates through the process. This effect is sometimes referred to as ‘smart capital’. Campaigns can attract 500 investors or more who are each intricately linked with your business following the raise. What better way is there to engage with consumers beyond the simple purchase than making them, investors? Yes, these people are more likely to buy your product, but more important is their stakeholder interest which will motivate them to recommend, advocate and loyally follow. 

Crowdfunding platforms have also been smart about the types of businesses that appear on their platforms. Crowdcube and Seedrs have worked hard to ensure a variety of businesses can apply to crowdfund. Go to the site and see the great spectrum of ideas that are funding right now.

Crowdfunding sites have made a calculated positioning through an understanding of the markets. They are the place to go for access to companies in huge growth sectors; you can’t move for successful Brewing companies at the moment.

Take Nebeus for example. They are a Crypto Bank making crypto finance simple and inclusive. They have had a great first couple of years which has seen them extend their reach all around the world and make finance accessible to the billions of people who have previously been kept out of the capitalist model by the traditional Banking system. Nebeus are now entering a growth stage and will shortly appear on Crowdcube for the purposes of ‘smart capital’.

Exciting new businesses such as Nebeus are keeping investors interested. Whereas many of the tired markets are struggling, new ones are emerging to great success. By positioning themselves alongside these new market leaders and ensuring a variety of business appears on their sites, crowdfunding platforms are staying ahead of the game and ensuring a smooth path to future growth in the process.

Ed Prior

Founder

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