Crowdfunding is using monetary contributions from people you don’t know to provide the money needed to fund a project. Crowdfunding has two primary types as identified by Crowdfunding Centre in May 2014. There is Reward Crowdfunding which involves entrepreneurs pre-selling a product or service in order to raise funds. There is also Equity Crowdfunding where the contributor receives shares of the company in exchange for the money they contribute.
Here are 10 Crowdfunding platforms where you can get funds for your business if you are in the UK.
- Kickstarter: This Crowdfunding was launched in 2009 with an objective to find a ‘new way to fund and follow creativity’. This platform funded 22,252 successful projects in 2014 alone. During this period, 3.3 million people donated more than 500 million dollars. This is no doubt a place to look to if you are in the UK and need fund for your business.
- Crowdcube: This started as a Crowdfunding platform for startups where people can buy equity in exchange for investment. It has further included two types of investment opportunity namely, equity and mini-bonds.
- IndieGOGO: This can be seen as the world’s biggest Crowdfunding site having more than 300,000 people in 224 countries who have been using it since 2008 to launch campaigns. These campaigns include films, arts and start-ups. Any amount you raise here becomes a reality as you are not required to attain your target before keeping what you raise.
- LendInvest: This is a debt Crowdfunding company that allows investors to buy securities in a fund which makes the loan to individual borrowers. LendInvest is known to be the first Crowdfunding providing this type of peer-to-peer lending platform for residential and commercial mortgages. It entered the London Stock Exchange in February 2015.
- Funding Circle: As of 2015, Fund Circle had lent more £550 million to UK businesses. It can lend up to £1m to a single business, and it is known to have lent £35m to small businesses each month. This has made it evolve to a peer-to-peer lending company valued at $1 billion today.
- Seedrs: This is a type of equity Crowdfunding that pays particular attention to start-up investment, and it’s the first platform to be approved by FCA. It is simple and focuses on small start-ups with investment as little as £10.
- Trillion Fund: This is Britain’s biggest social Crowdfunding platform having some exclusive investors such as Westwood. This Crowdfunding was founded in 2011 following a warning by UN that $1 trillion worth of investment will be needed to avoid the world warming by greater than 2 degrees. It, therefore, focuses on environmental and social projects.
- Unbound: This is a digital publishing platform that makes use of Crowdfunding to permit the public members to fund and influence author’s works at the creating stage. Unbound is one of the first to try this and has published over 50 books using this method.
- Zopa: This is the world’s oldest debt-based Crowdfunding service linking borrowers and lenders. Zopa almost doubled its revenues at the beginning of 2015 and had plans to lend £550 in the following 12 months. Based in London, it offers a diverse yet secured range of borrowing and lending options.
- Angel List: This Crowdfunding platform is only for start-ups and angel investors who fund a project with the hope of converting the fund they provide into debt or ownership equity. Though the UK branch has been affected by EU regulations, it’s still creating an impact on equity and debt platform.
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