The equity crowdfunding market doubled in size last year as investors flocked to the sector

30/01/2015
The crowdfunding equity market doubled in size last year and is now worth over £50m. The two platforms that dominate the space, Crowdcube and Seedrs, both recorded huge growth in investor and campaign numbers as an increasing number of growth-stage businesses launched campaigns. Crowdcube announced it raised £35.9m for 105 businesses during 2014, a 133% increase on the prior year.

Seedrs, the second biggest platform, does not publish the total raised but it has shared the following information on the type of deals that are taking place.

• Average net investment per month: £1,624,120
• Average number of deals funded per month: 10
• Average number of unique investors per month: 1,046
• Number of countries in which active investors are located: 30
• Average deal size: £163,940.84
• Average amount invested per investor: £3,174.52
• Average number of investors per campaign: 180

The phenomenal growth of the market is driven by a large increase in the pool of investors and the number of growth-stage businesses taking part, including household names like Eden project and River Cottage. And this is why those in the industry are talking about 2014 being a "coming of age" moment.
Theres no precise data on growth-stage businesses available, but Crowdcube co-founder Luke Lang estimates the share of "pre-revenue" startups on the site has decreased from 30-40% to 20-25% over the last two years. The evolution of the sector towards existing, larger businesses is in part investor-led. Those putting money into equity investments favour companies that can demonstrate experience and revenue generation.
Big campaigns on Crowdcube during 2014 include easyProperty which raised £1.4m, Caterham F1 at £2.3m and LOVESPACE at £1.5m (the platform crowdfunded £1.2m for its own activities in 16 minutes, which was followed by a £3.8m investment from VC firm Balderton Capital).
Seedrs' multi-million-pound campaigns included Chapel Down raising £4m and Landbay $2.35m, among others. In addition it closed December with nine deals worth a total of over £3m.
Lang points to the number of registered investors rising by more than 65,000 to 122,000 during the year and the FCO acknowledging crowdfunding as the other key reasons behind the sectors growth, telling BusinessZone: "We've seen more serial entrepreneurs. Well known, proven entrepreneurs that have done it before."
Seedrs reported a three-fold increase in investor numbers, pushing the total unique investors to just under 7,000 in 2014. The growth has been encouraged by the platform’s European expansion, which happened in late 2014, and has lead to an influx of new investors.
Finally, what advice would Crowdcube’s founder give businesses that are thinking about equity crowdfunding?
“All of the businesses that are successful have one thing in common; they understand the process, they understand crowdfunding isn’t necessarily a free lunch. The good entrepreneurs are well prepared. They create a pitch that does themselves and their business justice, and makes it stand out. They buy into the process and opportunity, and work terribly hard to make it work,” says Luke.

Fonte:http://www.businesszone.co.uk/blogs/chrisgoodfellow/deputy/equity-crowdfunding-market-doubled-size-last-year-investors-flocked-se-0

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