News Briefing - Crowdfunding, SME And Alternative Finance

three women and a man discuss reports

1.UK – FinTech

The Financial Conduct Authority (FCA) has laid out its proposals to ensure a "smooth transition" for EEA firms conducting business in the UK in case of a no-deal Brexit and a failure to secure an implementation period, according to Investment Week.

Its proposals are part of one of two consultation papers published on Wednesday (10 October), as the City regulator readies itself for its role in the fallout of the UK's departure from the European Union (EU).

2. UK – Equity

FT Adviser reports an equity raise in a company that supplies e-ticekting solutions to major venues like Twickenham and Chelsea FC.

The offer is hosted on Growthdeck and qualifies for the Enterprise Investment Scheme (EIS.)

“Steve Talbot, investment director at Growthdeck, said making an investment in online ticketing platform WebTicketManager is attractive because of the business’s organic growth since being founded in 2012.

WebTicketManager plans to use investors’ cash to expand its sales and marketing operation and grow its customer base.

Mr Talbot said customer acquisition to date has been achieved on a "very limited" budget with the ticketing business achieving revenues of £400,000 in 2017, which was sufficient to break even.

WebTicketManager is projecting that revenues will grow by 11 times that, by 2021.

Mr Talbot said the company is seeking to achieve an internal rate of return (IRR) of 68 per cent for investors, including EIS tax relief.

An EIS scheme allows private investors to reduce their income, capital gains and inheritance tax liabilities by investing in growth businesses.”

3. UK – Alt-fi

Abundance Investment taps new sources of funding on Seedrs.

“Ethical investment platform Abundance is preparing to launch an equity crowdfunding campaign for the first time and has opened up pre-registration for investors.

The fundraising round, which will take place on Seedrs, goes live for anyone who has pre-registered on Wednesday next week.

More than 800 Abundance customers have pre-registered already, a spokesperson told Peer2Peer Finance News.

The raise will go live on Seedrs to the wider public the following week.

This is the first time Abundance has raised money from anyone other than the 75 angel investors who have backed the platform to date.

“Abundance has raised more than £75m for 34 UK businesses and projects with the support of 75 angel investors,” said Bruce Davis, co-founder and managing director of Abundance.’

4. UK - Equity

The Daily Mail's ThisIsMoney reports on a business that appeared on Dragon's Den in August, turned down the deal they were offered, then went on to raise three times that amount from Crowdfunding.

Alexandra and Rupesh Thomas, founders of drinks business Tuk Tuk Chai, which produces Indian chai tea for a British audience accepted an offer of £100,000 from Peter Jones, then changed their minds the following day.

The couple successfully raised £300,000 through crowdfunding platform Crowdcube, and did it for a smaller share of equity than Mr. Jones had haggled for.

"You could argue that the rise of crowdfunding is making the Dragons' Den format redundant", says the Mail, "and is now simply a marketing tool for those looking to raise the profile of a business."

The full story is available on ThisIsMoney.

5. International – FinTech

Ourmarketresearch offers paid-for research on the global crowdfunding sector.

Their latest report offers an overview of the market trends, drivers, and barriers with respect to the Crowdfunding market. It also provides a detailed overview of the market by different regions across United States, Europe, China, Japan, India, Southeast Asia and Others which shows a regional development status, including market size, volume and value, as well as price data.

Ourmarketresearch: Crowdfunding Market by Key Players, Type, Application and Regions Forecast To 2022

Academic research is free. Another Crowd recommends the work of Cambridge University's Centre for Alternative Finance (CCAF.)

6. International – Equity

Crowdcube is celebrating a milestone in Spain. The Spanish branch of the UK-based equity crowdfunder revealed this week it has surpassed €20 million in funding for Spanish firms. Crowdfund Insider reports figures from the that Crowdcube Spain has helped 61 companies in 72 offerings to raise money online, since 2014.

  • According to data from the Spanish Association of Fintech and Insurtech, Crowdcube represented 37% of the Spanish equity crowdfunding market in 2017.
  • The average crowdfunding round in Crowdcube stood at €338,095.
  • According to Crowdcube, 31% of investors were accredited and 69% were non-accredited investors.

More details of the story on Crowdfund Insider.

7. International – FinTech

Pedro Anderson of Winding Tree looks at The Good, Bad and Ugly of how institutions see Blockchain. The Ugly section has a priceless ICO remark.

“ICOs are like if the Wright brothers sold air miles to finance inventing the aeroplane” – Matt Levine

Of course, this article wouldn’t be complete without a special mention to some of the most important ICO scams to date. One of the main problems for legitimate startups to grow is dealing with scams that severely damaged credibility amongst the mainstream audience.

Bitconnect described its currency as:

“The moment you acquire BitConnect Coin it becomes an interest-bearing asset with 120% return per year. It is that simple.”

But by January 2018, the lending platform and cryptocurrency exchange was closed leaving their investors coins worthless.

According to Cointelegraph, OneCoin, “is officially labelled as a clear ponzi scheme” and was fined €2.5 million by Italian authorities.

More recently, Pincoin and iFan, both run by the same company operating out of Vietnam, “are believed to have swindled around 32,000 investors of a combined $660 million.”

Unfortunately, these are only a few bad apples amongst many infamous projects.

There are still key infrastructure changes that need to take place before blockchain technology can actually ‘disrupt’ every industry. Slowly, the emerging crypto space is evolving, blockchain-based companies are creating infrastructure to solve energy demands and ICO fever has finally calmed down.

As key players work together to further legitimize the space, we might actually reach a point where blockchain will become the underlying technology in every industry we know.”

Pedro Anderson is the Founder and COO of Winding Tree. Pedro is a social entrepreneur, fundraiser and proponent for decentralized systems.