Alternative StartUp Finance Rockets
Sources of alternative finance take off as funding increases fivefold at crowdfunding platform Crowdcube…
Just days after news came in that the Funding for Lending Scheme was seeing less money being lent to small businesses, alternative funding seems to be taking off.
According to the figures, crowdfunding platform Crowdcube raised £2.7 million for 11 businesses in the whole of 2012. This year, in under six months, that figure has increased to £4.4 million with 20 pitches being funded.
14 out of 25 successful pitches this year have been for £100,000 or more and in just April and May £3.5 million was raised with 8 businesses hitting their targets in May.
Luke Lang, the co-founder and marketing director of Crowdcube said of the latest figures:
“That’s a whopping 524% increase and we’re only at the start of June! In fact, we funded 25 pitches for a total of £2.7 million during the whole of last year – that’s a huge leap and we’ve smashed our targets.”
“It’s fantastic to see the model taking off like this in the UK. We’re excited about the next phase of our growth at home and abroad.”
In May Crowdcube raised a record-breaking £1.5 million in only three days from 256 of its members. The world-record equity crowdfunding deal will be used to expand the platform on an international level, take on more staff and to market the service more widely.
The Rushmore Group, which owns three members’ clubs in London, is no stranger to Crowdcube and previously raised £1.5 million in November 2011 and January 2012. This time round, the group raised a further half a million pounds.
Another success story came from Lawbit, the online legal service providing simple contracts for small businesses. Lawbit’s 177 backers provided £400,000 of funding for the firm.
Clive Rich, the founder of Lawbit, said of the funding:
“We already had angel backing but when we discovered Crowdcube and the power of the crowd, we were able to raise almost double the investment in a few days.”
“We’re delighted to have found a group of like-minded, passionate investors. Working with the guys at Crowdcube is great; they’re professional, very knowledgeable and go the extra mile to be helpful.”
Since launching in February 2011 the Crowdcube plat from has raised nearly £10 million for more than 50 businesses.