When startups look for additional funding, there are many options to be considered. However, financing is no simple task. The very first financing usually comes from discussions with friends and family, $50k.
Discussions with the angel investors and with the banks, for the most advantageous personal loans, could prove to be difficult. Crowdfunding market seemed to loose momentum and actually was shrinking in the recent years. One of our conclusions was that the crowdfunding market should transform in order to remain relevant and should give people a stake.
Finally, the sector is transforming, we have discussed about the impact of ICO and the blockchain technologies but it seems that the momentum is owned by the equity crowdfunding.
The essence of equity crowdfunding is gathering a big number of small investments to acquire an equity stake of a startup, by using a digital platform.
European Commission describes it as “selling a stake in your business to a number of investors in return for investment. The existence of equity funding is well established, with private equity, venture capital and angel investing long playing a role in developing companies. The main difference between equity crowdfunding and these traditional models is that, rather than establishing a one-to-one relationship, it is offered to a wide range of potential investors, some of whom may also be current or future customers. Equity crowdfunding does this by matching companies with would-be angels via an internet-based platform.“
Seedblink is one of the European platforms and they make it easy for everyone to invest on the platform by:
– selecting one of the listed startups
– making a commitment, respectively a binding promise of investment (minimum of 2,500 euro)
– signing an investment agreement prepared by our specialists
– and finally execute the payment that becomes the investment into the selected startup
Is it for you?
Take a look at the following table based on the ICAEW Corporate Finance Faculty’s analysis. Maybe this will help you decide.
|Profitable growing business||✓|
|Established and steadily growing||✓|
|Established stable business||✓|
|Launching new product/service/brand||✓|
|Expanding into new territories||✓|
|Investing in new facilities||✘|
|Looking to refinance||✓|
|In need of capital restructuring||✓|
Looking foward, equity fundraising will become mainstream as the European Commission continues to support the innovative financing solutions to boost entrepreneurship in the EU.
EC welcomes the provisional political agreement reached on 19 December 2019 between the European Parliament and the Council on its proposal to boost Crowdfunding in the EU.
The proposal, described by the Commission as “a key building block of the Capital Markets Union“, aims to harness the opportunities presented by emerging technology-enabled innovations in the financial sector, known as FinTech. With this agreement, 12 out of 13 Capital Markets Union legislative proposals have been adopted or agreed at EU level.