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It’s a well known fact that the majority of start-up companies fail to be a success. This could be down to a bad product, poor marketing, high competition or a number of other factors. But even if companies are successfully selling their wares, hundreds, if not thousands of them, can fail due to poor cash flow management.

Getting customers to pay their invoices promptly can be a major challenge for entrepreneurs. And when clients eventually do pay their bills companies can experience additional delays via the banking system. For example, traders who take card payments typically have to wait at least 72 hours for funds to be cleared and reach their bank accounts.

This is down to the way that current banking systems are organised, with transactions processed via a slow and archaic centralised system. Waiting even three days for payment can cause considerable pressure on small companies’ cashflow, restricting their ability to pay bills and invest in growing the business.

But two rapidly developing and disruptive technologies known as “blockchain” and “distributed ledger” are helping to speed things up.

Blockchain is a technology which is behind the way crypto-currency Bitcoin works.

Put very simply, the blockchain is a public (or distributed) ledger which records ownership of an asset. In contrast to current systems – which use a private and centralised ledger – copies of the blockchain are stored on thousands of computers across the world. Being distributed freely and openly the technology is able to approve transactions much more quickly by cutting out the middleman and obtaining a consensus approval.

The industry has received much attention in recent years, with a recent report from Santander entitled Fintech 2.0 suggesting that distributed ledger technology could save banks up to $20 billion in costs by 2022.


Distributed ledger vs centralised ledger. Source: Santander Fintech 2.0 Paper

 Investing in blockchain

One company which is using blockchain technology is Payver.

The firm is a technology and quasi-financing business which helps small businesses to receive funds from their card transactions much more quickly. Using its bespoke software (based on distributed ledger technology) the company is able to provide small businesses with almost instant funding against their received card payments. Its business model is based on receiving a monthly fee of between £10 and £25 from users of the Payver app along with a small fixed fee for every transaction completed.

Payver is currently looking to raise £300,000 on the Crowd for Angels platform.

To see the full details of the pitch CLICK HERE




Risk Warning

Investing in small public listed or private companies involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Crowd for Angels is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own Investment Decisions. You will only be able to invest via Crowd for Angels once you are authorised. Please click here to read the full Risk Warning.

This page has been approved as a Financial Promotion by Crowd for Angels (UK) Limited (Company number: 03064807) , which is authorised and regulated by the Financial Conduct Authority (Reference number: 176508). Investments can only be made on the basis of information provided in the Pitches by the Investee Companies concerned. Crowd for Angels takes no responsibility for this Information or for any recommendations or opinions made by the Investee Companies.

Financing a startup used to be a precarious task for entrepreneurs due to the amount of debt they would accrue just to get their project off the ground. The days of worrying about credit cards and bank managers, however, are gradually becoming a distant memory thanks to the rise of crowdfunding for startups.

Crowdfunding allows entrepreneurs to pitch a business plan via the web to prospective investors; these investors may be other entrepreneurs, bands of investors, or simply individuals looking to invest some disposable finance.

And crowdfunding for startups brings a wealth of benefits, so let’s take a look at why it’s a good opportunity for launching businesses.

Diverse Range of Investors

With public knowledge of crowdfunding receiving such a boost in popularity due to the rise of Kickstarter, many first-time investors are now heading online to investigate potentially lucrative investment opportunities.

This is in stark contrast to the old days of investment, where it was more common for a small number of investors to invest large amounts of capital into your business. This certainly cut down on the admin, but also exposed startups to substantial risks e.g. if an investor suddenly pulled their money.

With crowdfunding, however, the levels of investment per individual are much lower and present less financial risk to your overall targets.

The Internet Allows You to Pitch Online

Due to the lack of capital in the early stages of a startup it’s always advisable to keep operations as streamlined as possible. However, the need to physically get out into the world and meet investors has meant it’s difficult to achieve.

Thankfully, crowdfunding for startups cancels a lot of the legwork involved by bringing all pitches online. This is crucial for entrepreneurs who simply can’t afford to be in two places at once and also reduces the stress of preparing individual presentations.

Crowdfunding Brings Feedback

Running a startup can be a lonely business at first, but the beauty of crowdfunding is that it brings in a broad range of investors who all want to take your business to the next level. This provides an amazing sounding board to work on ideas and gather feedback from. And at the startup level this is invaluable to help guide your business through those hazardous early days.

Media Exposure is Enhanced

Previously, funding ventures failed to capture the public’s imagination as they were primarily conducted behind closed doors and far away from the public eye.

Crowdfunding, however, has become a unique phenomenon in that it can generate headlines very quickly if the media picks up on your vision. This, in turn, can then spread like wildfire across social media, raising your project’s profile even higher. It’s this publicity which can help you maximize the investment into your business with virtually no financial outlay.

And the benefits of this increased exposure aren’t just limited to the amount of investment your startup receives. It also brings in organic traffic to your brand and helps to raise your brand’s profile as well as bring potential customers into your conversion funnel.

We’ve shown that there are a myriad of benefits when it comes to crowdfunding for startups, so bearing this form of investment in mind should be a given for any startups.

It is no secret that as a society, we are quickly losing faith in the banking system. As technology continues to grow, there is a fast approaching sub-sector in alternative finance that could provide us with a solution. Crowdfunding platforms have completely transformed how we approach business through the medium of new technology. The good news doesn’t stop there.

Crowdfunding is just the tip of the iceberg in terms of the new industry norm, especially when it comes to finance. In the UK in 2014, equity-based crowdfunding grew by 420%. Because of its recent boom, many now ask whether crowdfunding is trustworthy, and if so, can it pick up the slack of the banks?

An attractive alternative to banking, this thriving industry has not yet reached its full potential. As more and more companies use crowdfunding as a fundraising opportunity, digital platforms continue to grow, offering companies an attractive and already popular resource. The UKCFA recently reported that, “The European online alternative finance market grew by 144% last year to nearly 3bn euros and could top 7bn euros in 2015.  The UK is by far the largest European country for alternative finance at 2.34bn euros (£1.78bn) in 2014.”

Small and large companies both thrive from crowdfunding because it gives the public a degree of control over what makes it onto the public market and what does not. It has particularly changed the way we view bank loans. As banks continue to let individuals and small companies down, there is now a shift in how we view the role of lenders. More so than ever before, we realise a financing system can indeed be built by and for the people. Highly decentralised and equal in its prospects, crowdfunding is that financing system.

In the near future, crowdfunding will surely replace lenders, as more people realize the success of this new financial platform.

On the first glance, It does not seem likely that the UK government would be that generous with its revenue. Nevertheless, these tax reliefs are available to investors in certain instances.

To be eligible for the relief, the company seeking the investment must have:

  1. A permanent establishment in the UK for a period of 3 years from the issue of the shares.
  2. All the money raised by the share issue must be used within two years in a ‘qualifying trade.’
  3. The trade must be carried on by the parent company or subsidiary which is a 90% subsidiary for a period of 3 years from the issue of the shares.

I guess the reasoning here is that if the company establishes a permanent establishment in the UK this must lead to some of the investment being made in this country which can only help better the economic prosperity of the country.

Spundge, a Canadian company, is currently raising EIS funds on They have established a UK subsidiary and a London office as part of this process. Andrew Edwards of Spundge stated, “Raising investments for the UK subsidiary that is going to be responsible for driving forward its international development, through its London Office was made considerably easier with the availability of EIS tax relief for UK investors, to be able to invest via the Canadian Holding Company. That way investors can invest in the entire Spundge operation, including its intellectual property as well as all its  international business.”

Crowdfunding is a popular way for small companies to raise money and provides many marketing opportunities that would otherwise be unavailable. Since many ideas that are crowdfunded are innovative and exciting, it levels the playing field for smaller companies to develop their products.

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