A brief round up of crowdfunding news…
No Crowdfunding law for UK?
The recent UK taskforce announcement on alternative funding sources suggests that nothing has been decided at UK Government level.
Seedrs raises capital
However, Seedrs.com have recently announced a £1m fund raising success with top London VCs – DFJ Esprit and Luke Johnson’s Digital Prophets.
Meanwhile, the original crowdfunding model – developed by Kickstarters – is coming under more attack for not declaring its failures .
US Crowdfunding gold rush?
In the US, the recent change in legislation has led of warnings of a goldrush for crowdfunding whilst Indiegogo raised $15m for its crowdfunding platform.
Where is this going?
There is a definite split in crowdfunding strategy away from the ‘let the market decide’ philosophy on one side to a far more regulated structure on the other.
The fact that Seedrs is FSA regulated is important and shows that it believes that existing rules can be used to protect crowdfunding investors.
However, the upshot of this is that Seedrs will take 7.5% of any money raised (this is up from the traditional 5% that business angels networks typically charge) and they take 7.5% of any profit that the angel investors enjoy.
So, ‘quality controlled’ crowdfunding will be expensive – and hence, will it be the place of last resort for businesses that can’t raise money elsewhere and hence, what will the quality of businesses on the platform look like?
It is the quality of the investments – afterall – that are caused problems with Kickstarter – will Seedrs and their like be able to do better?
If you have more crowdfunding stories or comments – please add those below…