Archives For Crowd funding

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 www.crowdforangels.com. 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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Crowd for angels feature in Asian Voice 7th June

Tony De Nazareth, who has over 30 years’ experience in investment banking, venture capital and lending, has launched Crowd for Angels, a platform to provide funding for companies from the beginning till it is listed. The launch pitches include film company, The Series Ltd, which is looking to raise funds for TV drama, the Mughals, Bet Fast Ltd, a mobile software company and AIM listed company Advanced Oncotherapy, a provider of radiotherapy systems, which has a £22.7 m market cap and recently raised £6 m through traditional channels.

Tony Nazareth said that this was the first time that a directly regulated crowdfunding platform combines debt and equity pitches in one place. He said that he wanted to bring innovative and appealing products to the crowd, fund companies through all phases of their growth cycle and also enable companies to find funding outside of traditional circles.

He said that the beauty of his platform was that a company could begin with raising seed capital and carry on being funded through to Pre- IPO and when listed. He said that for the investors there were no fees. Up to 50% tax relief on investments through SEIS and EIS. Short term convertible loans, thereby reducing the probability of default with the option of converting before maturity. You can invest as little as £25 and can potentially make returns of over 10 percent.

For companies, funds are released on the minimum target being reached. It provides funding for the entire growth cycle – from seed to listed. Two funding targets, that allows companies to gain access to funding more quickly.

First published in Asian Voice 7th June 2014. To view the full article please visit: http://issuu.com/abpl/docs/av_7thjune2014

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  • Crowd for Angels is the first platform to provide funding for companies through their growth cycle, from seed to listed
  • First directly regulated debt and equity platform
  • Launch pitches include AIM listed Advanced Oncotherapy Plc
  • Enables listed companies to generate funding outside of traditional circles
  • Gives investors access to products normally reserved for institutional clients.

Crowd for Angels, the first crowdfunding platform to provide funding for companies from seed all the way through to listed has launched today. The platform, which is also the first directly regulated debt and equity platform, already has three live pitches.

It is launched by Tony De Nazareth who has over 30 years’ experience of investment banking, venture capital and lending. He has combined his experience and knowledge of finance with his interest in social media and technology to create an innovative source of funding that competes with, and has the potential to replace the traditional sources of funding for companies.

The launch pitches include film company Mughals, The Series Ltd, which is looking to raise funds for a new high end prime time TV drama, the Mughals – supported by actress Mamta Kaash; Bet Fast Ltd, a mobile software company which provides software to bookmakers & stadiums; and AIM listed company Advanced Oncotherapy, a provider of radiotherapy systems, which has a £22.7m market cap and recently raised £6m through traditional channels.

Director and founder, Tony De Nazareth comments: “This is the first time that a directly regulated crowdfunding platform combines debt and equity pitches in one place. I want to bring innovative and appealing products to the crowd, fund companies through all phases of their growth cycle and also enable companies to find funding outside of traditional circles. Crowd for Angels presents a unique and appealing platform to the crowdfunding sector offering niche products that other platforms do not offer. We are challenging the status quo by developing new ways of doing things such as having a minimum and a maximum fund raising target for pitches which does away with the standard ‘all or nothing’ approach. The fact that we have a listed company as one of our opening pitches speaks volumes about the need for a new crowdfunding model such as ours. The beauty of our platform is that a company can begin with raising seed capital and carry on being funded through to Pre-IPO and when listed. Companies can use our platform to get fast and flexible financing on their terms and investors have an opportunity to invest in attractive products that would not normally be available to them.”

The benefits of Crowd for Angels include:

For Investors

  • No fees
  • Up to 50% tax relief on investments through SEIS and EIS
  • Short term convertible loans, thereby reducing the probability of default with the option of converting before maturity.
  • Invest from as little as £25
  • Investors can potentially make returns of over 10 per cent
  • Crowd for Angels platform is regulated under the April’s FCA guidance on the sector

For companies

  • A Minimum and Maximum target – funds are released on the minimum target being reached
  • It provides funding for the entire growth cycle – from seed to listed
  • Two funding targets, that allows companies to gain access to funding more quickly
  • Nominee structure so companies only deals with one investor
  • Reduces the chance of a drop in share price on conversion, as multiple investors with different risk profiles and time horizons are unlikely to convert and sell at the same time.

On 13th July 2012, Tony De Nazareth set out to forge his knowledge of quoted sector financing and social media platforms to create an online crowdfunding platform that allowed ordinary people to become investors in both debt and equity funding for Private and Public companies. Crowd for Angels was started

We wanted to challenge the status quo in the funding market, to help companies find funding and to give investor the opportunity to invest in companies they believe in.

In the coming months as we prepare for launch, Tony and his team look forward to the challenges and opportunities Crowd for Angels will bring.