Last updated on April 12th, 2013 at 09:10 am
Equity based crowdfunding web platforms such as Crowdcube give people a new way to invest in companies through online portals and micro-payment systems which lower the barriers to investing and allow anyone to easily log in and back businesses, even if its just with £10. Not only does crowdfunding simplify and open up the financing process, but it taps into the viral nature of the internet by allowing start-ups to amass an army of brand evangelists who can rapidly raise the profile of the company and build its community.
Crowdfunding was recently used by Scottish beer brand Brewdog to successfully raise over £2 million from around 700 individual investors, principally to finance the roll out of their branded bars and the construction of an eco brewery. Brewdog’s ‘Equity for Punks’ crowdfunding was especially remarkable in that they financed themselves through their own website with no intermediaries or brokers involved at all.