SMEs are increasingly looking at crowdfunding as a way of raising finance without dealing with bureaucratic banks and fickle investors. However, new rules by the Financial Conduct Authority (FCA), which came into force recently, regulate certain types of crowdfunding.
Crowdfunding involves raising finance by taking small investments, loans or donations from a large number of people. Depending on who you believe, the new FCA rules have either "taken the crowd out of crowdfunding" or "represent the right balance between the freedom to invest and investor protection".
Fluentify, a London-based videoconferencing language learning platform founded last year, has closed a $410,000 angel investment, led by Stefano Marsaglia, former chairman of Barclays global financial institutions group and current co-head of Mediobanca investment bank.
The new funding brings the startup’s total raised to date to $500,000.
With recent talk of early-stage startups being squeezed out of the Old Street area of East London’s ‘Silicon Roundabout’ (or Tech City, to give it its UK government sanctioned name), it’s no surprise to see a new startup crop up to help other startups in the city find suitable office space. Spacious, founded by Tushar Agarwal and Tom Watson last November as part of the Entrepreneur First programme, is an online marketplace for startup office space, initially targeting companies in London.
Darren Westlake of Crowdcube knows what it is like to start a business. It was the very same process now faced by many of his customers that was to be the genesis of Crowdcube. After experiencing the difficulties of obtaining financing first hand as an entrepreneur, Darren noticed that the financial sector had not adopted technology, which could lead to greater efficiency and access to capital for small businesses. Enter Crowdcube.
The UK’s Meducation, an online education network for medical students and practitioners, has raised $1 million in seed funding. Part of the round — approx. $300,000 — comes from the UK taxpayer-funded Technology Strategy Board, with the remaining being funded by unnamed private investors.
Entrepreneurs say new rules from the UK regulator will "take the crowd out of crowdfunding".
New policies come into effect next month concerning crowdfunding in the U.K., drawn up by the Financial Conduct Authority (FCA) Crowdfunding leverages regular consumers who want to purchase equity or a stake in new business, usually startups. Many are hosted through popular platforms like Kickstarter, Indigogo, crowdfunder and even our own platform fundedflow. Investors, lenders and even donators usually get rewards or paybacks the amount they have “pledged”. This could be anything from T-shits, badges, tickets, CD’s or whatever is being funded as a return for support.
London U.K. accelerator called Wayra is still a relatively new player in the startup market place. Wayra set up shop in May 2012 and took in its first set of startup seedlings. Out of the 17 startups selected last year, they included a lesbian dating service called Dattch and journal app called Narrato. Recently Wayra has listed the current selection of young hopefuls that will be groomed through a nine month training and mentoring course.