Following our recent crowdfunding survey 92% say legalise crowdfunding – but 8% have real concerns about potential abuse.
Of those willing to invest (80% of our audience), 65% would invest upto or in excess of £10,000 or US$10,000 per year. Although a significant number – 30% would be interested in investing up to £1,000 or US$1,000 per year.
That means that the most typical annual investment would be around 10,000 – and we can speculate that this might consist of investments in 1,000 dollars or pounds chunks.
Remember, the audience on iBusinessAngel are most interested in startups. Hence, startup companies looking to raise funds by offering #1,000 stakes will appeal to the widest audience.
However, a significant number of our business angel readers are willing to invest up to 50,000 per year. Again, assuming an average of 5 or so investments per year – that would mean stakes of 10,000.
It is clear from US and UK politics that crowdfunding is coming, the question is increasingly becoming, how do the investors – or micro business angels and the entrepreneurs (or creatives) align their interests to best effect.
The survey tells us that you should either denominate the crowd funding appeal in 1,000 or 10,000 stakes – depending on whether you wish (or are able) to appeal to casual investor who is ‘trying out’ crowdfunding or the more adventurous business angel who is keen to get a greater of his investments for less total outlay.
Remember that in traditional business angel thinking, the angel is advised to make 10 investments of between 25,000 and 50,000 each – and that no more than 10 or 15% of the angel’s net worth should be tied up in startup equity stakes.
Hence, angel investing has been the preserve of the individual worth 5million or more, in the past.
Simply based on the 100 people who took our survey, legalising crowdfunding would bring between £1m and £1.5m of new money into startups. That has to be exciting…
Lastly, we can not see any particular regional focus on where people would be willing to invest. Despite being a UK and US focused survey, the willingness to invest in Europe (ex UK) or elsewhere in the world is pretty even.
Clearly then, the desire for crowdfunding is a global phenomena and not limited to national boundaries.
Crowdfunding is going to make investing possible / feasible for individuals with a normal pension pot of a tens of thousand rather than the super wealth business angels. Our survey bears out this shift.
The only question is how to stop people investing beyond their means or risking capital they can’t afford to lose? Education might help, but do we need more?
Either way, the new business angels are on their way, so, welcome to the new business angels!