Crowdfunding platforms have established themselves as a viable alternative to traditional equity funding sources for start-ups locally, according to cross-Border enterprise promotion body InterTradeIreland.
The organisation, which has this week issued a new guide for companies considering going down the crowdfunding route, said it is becoming an increasingly popular option for firms looking to scale.
Its report shows £206 million (€230.6 million) was raised by start-ups across the four leading equity crowdfunding companies in the United Kingdom last year. Overall, there were 352 deals completed with the average per deal working out at £584,000 (€652,000).
Among the Irish start-ups to avail of crowdfunding campaigns last year were HouseMyDog, Flender, See.Sense and Re-Vana Therapeutics, whose stories all feature in the new guide.
133 deals
The leading platform last year was CrowdCube, which was responsible for 133 deals and a total raise of £87.3 million (€97.5 million). Other popular UK-based platforms include Seedrs, Syndicate Room and Venture Founders.
“Historically angel and venture capital investors were the main sources of third-party equity capital for high potential start-ups on the island of Ireland,” said Drew O’Sullivan, who as lead equity adviser with InterTradeIreland’s equity network has provided guidance for many companies both north and south.
“With over £200 million raised in 2017 alone on UK-based equity crowdfunding platforms by young businesses, it is clear equity crowdfunding has established itself as a viable alternative or, quite often, complement to traditional equity funding sources for high-potential start-ups,” he added.
The new InterTradeIreland online resource, which has been released to coincide with its VC conference in Belfast, weighs up the benefits and negatives of crowdfunding.
“We compiled the resource as we found companies were asking about the option, but had difficulty sourcing objective sources of information about the issues, the process and the challenges involved. In addition, they were not aware of exemplars from the island who had successfully completed an equity crowdfunding fundraise on the UK-based platforms,” said Mr O’Sullivan.
