{"id":12993,"date":"2016-03-15T09:59:03","date_gmt":"2016-03-15T10:59:03","guid":{"rendered":"http:\/\/rb.dev.caspianmedia.com\/uncategorized\/2016\/03\/15\/where-to-find-the-best-crowdfunding-deals-and-how-to-cut-through-the-noise\/"},"modified":"2020-04-22T15:51:16","modified_gmt":"2020-04-22T14:51:16","slug":"where-to-find-the-best-crowdfunding-deals-and-how-to-cut-through-the-noise","status":"publish","type":"post","link":"https:\/\/realbusiness.co.uk\/where-to-find-the-best-crowdfunding-deals-and-how-to-cut-through-the-noise","title":{"rendered":"Where to find the best crowdfunding deals and how to cut through the noise"},"content":{"rendered":"<div class='booster-block booster-read-block'><\/div><p>The signs in 2016 are that crowdfunding will only get bigger, <a href=\"http:\/\/www.cityam.com\/235956\/mobile-challenger-bank-mondo-reaches-1m-crowdfunding-target-in-96-seconds-adding-to-7m-venture-capital-investment\">with challenger bank, Mondo, raising 1m in just 96 seconds on Crowdcube<\/a>. As the worlds first mobile crowdfunding aggregator, myself and the team at OFF3R can tell you first hand that there is an unbelievable amount of information out there being thrown at investors. Ultimately, the best deals will vary according to each individual investor, but where can you turn to find the opportunities that stand out from the crowd <\/p>\n<p>One of the greatest aspects of equity crowdfunding is its ability to support businesses that serve what would be otherwise under-funded areas or sectors. Independent beer producers are the prime example of this. In fact, on one day in February, 19 per cent of all businesses fundraising on <a href=\"https:\/\/www.crowdcube.com\/landing\/join-crowdcubegclid=Cj0KEQjw5Z63BRCLqqLtpc6dk7gBEiQA0OuhsBdqggI1uD_9X2BY3VUGOE0u6Yr_z9LdBdbi1vP6rGYaAkhp8P8HAQ\">Crowdcube<\/a> were breweries. Essentially, what weve seen is the rise of the &#8220;fanvestor&#8221;, allowing craft beer enthusiasts and the like to invest in the projects they want to see flourish.<\/p>\n<p><strong>Read more about crowdfunding:<\/strong><\/p>\n<ul>\n<li><a href=\"http:\/\/realbusiness.co.uk\/article\/33135-exclusive-interview-indiegogo-deals-with-competition-and-creates-offering-for-corporates\">Exclusive interview: Indiegogo deals with competition and creates offering for corporates<\/a><\/li>\n<li><a data-wpil=\"url\" href=\"http:\/\/realbusiness.co.uk\">Equity crowdfunding is the answer to entrepreneurial finance failures<\/a><\/li>\n<li><a href=\"http:\/\/realbusiness.co.uk\/article\/32755-how-uks-equity-crowdfunding-success-will-take-tech-investments-to-82bn-by-2020\">How UK&#8217;s equity crowdfunding success will take tech investments to $8.2b by 2020<\/a><\/li>\n<\/ul>\n<p>Investments of this type are most typically found on platforms that operate retail investor-led models, such as <a href=\"https:\/\/www.seedrs.com\/investgclid=Cj0KEQjw5Z63BRCLqqLtpc6dk7gBEiQA0OuhsAD4848Ql-cuPNPiuY9Ddq2YC7LDZDfeicQgckbLaPAaAlkp8P8HAQ\">Seedrs<\/a>, Crowdcube and <a href=\"http:\/\/www.investden.com\/\">InvestDen<\/a>. Another trend that has emerged recently is that of impact investing; <a href=\"https:\/\/www.emergingcrowd.com\/\">Emerging Crowd<\/a> is a platform that enables investors to invest in frontier and emerging markets. This is another example of <a data-wpil=\"url\" href=\"http:\/\/realbusiness.co.uk\/dealing-with-uncomfortable-situations-at-work\/\">equity crowdfunding<\/a> opening up access to previously untapped markets.<\/p>\n<p>Whilst the majority of UK crowdfunding platforms operate across many sectors, the trends are such that each platform specialises in certain areas. For example, <a href=\"https:\/\/www.syndicateroom.com\/\">Syndicate Room<\/a> has built an excellent reputation as a go to funding source for medical or healthcare businesses. Its important to be attuned to which platforms best serves different sectors and align this to your personal preferences.<\/p>\n<p>It might seem that this is becoming an increasingly crowded space, and it is, but theres an incredible amount of diversity of both funding options for startups as well as investment options for investors. Different platforms are in a position to offer funding support to businesses at all sorts of different stages. Platforms such as <a href=\"https:\/\/www.venturefounders.co.uk\/\">VentureFounders<\/a> and <a href=\"https:\/\/www.ourcrowd.com\/\">OurCrowd<\/a> which adopt a predominantly VC-style approach to investment typically raise larger rounds for later-stage businesses. One could consider fundraising rounds on these platforms to be mostly Series A or later.<\/p>\n<p><a href=\"http:\/\/www.angelsden.com\/\">Angels Den<\/a> is probably one step down from this model, typically giving burgeoning companies the opportunity to raise substantial seed rounds through a sophisticated crowd of experienced investors. Syndicate Room are in a similar position here, operating a lead investor model and a significantly higher minimum investment of 1,000.<\/p>\n<p>While Crowdcube, Seedrs and continental platforms including Finnish platform <a href=\"https:\/\/www.invesdor.com\/en\">Invesdor<\/a> and Stockholm-based <a href=\"https:\/\/www.fundedbyme.com\/en\/\">FundedByMe<\/a> also typically raise early-stage seed rounds, the platforms all operate retail investor models. What this means is that the diversity of investment opportunities available is such that investors are well-positioned to make a more informed decision.<\/p>\n<p><em>Read on to find out how to cut through the noise.<\/em><\/p>\n<p><!--nextpage--><\/p>\n<p>Its also pretty easy to forget about property crowdfunding but this is an investment instrument that hasnt reached anywhere near its potential yet. The platforms that lead the way here in the UK are <a href=\"https:\/\/propertypartner.co\/utm_source=google&amp;utm_medium=cpc&amp;utm_term=Branded&amp;utm_campaign=Branded-Search-Exact&amp;gclid=Cj0KEQjw5Z63BRCLqqLtpc6dk7gBEiQA0OuhsMk21xhC2LO_ezHGe7nAf5jPICAwUedMu8AydYYr-88aAjxn8P8HAQ\">Property Partner<\/a>, <a href=\"https:\/\/www.crowdlords.com\/\">CrowdLords<\/a>, <a href=\"https:\/\/www.thehousecrowd.com\/\">The House Crowd<\/a> and <a href=\"https:\/\/propertymoose.co.uk\/\">Property Moose<\/a>.<\/p>\n<p>There are typically two ways to invest in property based crowdfunding deals. The first is simply equity investments in commercial or residential properties where investors realise returns in the form of a share of the rental income. And the second is debt where investors invest in the mortgage loan associated with a particular property. Loans are repaid with interest which finds its way back into the pockets of investors. Generally speaking, equity investments offer higher returns but they are traditionally higher risk.<\/p>\n<p>The difference with property or real estate crowdfunding is that investors can see likely projected returns on their investment. Of course, when you make an investment in a startup, the end goal is to earn your returns through the achievement of an exit. For a more risk averse investor, property might be the way to go, but if you consider yourself a verifiable risk taker, then the potential returns of having a share in the next unicorn would probably tempt you towards traditional equity finance.<\/p>\n<h4>How to cut through the noise<\/h4>\n<p>I would actively advise you to do research into previously successful companies, look for shared characteristics between these and newly fundraising companies. As crowdfunding continues to grow, its general infrastructure is rapidly expanding, bringing forth aggregators, the emergence of intermediaries and advisories for both investors and startups alike as well as the introduction of ratings agencies that actively evaluate existing deals. Making use of these new independent, external sources will absolutely help you find and invest in the best crowdfunding deals.<\/p>\n<p>Start with a focus on companies in sectors you know. This will ease you into the <a data-wpil=\"url\" href=\"http:\/\/realbusiness.co.uk\/\">crowdfunding<\/a> process and you can start to understand which platforms are more aligned to your preferences. Before delving too deep into a possible investment opportunity, set a threshold in terms of the percentage that a particular project is funded. For example, a campaign that has reached 80 per cent of the funding goal is significantly more likely to be successful than a project that has been running for the same amount of time but has only received 20 per cent of the total investment.<\/p>\n<p>Recent research from LSE has claimed the crowd are making economically rational decisions and the likelihood of investors blindly investing in seemingly the most popular pitches is fairly low. As such, this threshold approach will send signals of quality to you as an investor that a certain pitch warrants greater attention. With OFF3R you can keep tabs on the funding progress of liked deals as well as receive notifications each time one of your liked deals hits a certain threshold.<\/p>\n<p>And finally, take some time to review who the lead investors are. A number of platforms are becoming increasingly transparent regarding who&#8217;s investing in certain projects, and they do this for a reason. It adds weight. If experienced, successful investors are leading certain funding rounds, and are proven in a particular sector, this can give you real confidence that this could be a company worth your time and money.<\/p>\n<p><em>With the global crowdfunding market predicted to reach $96bnby 2025, the rise of alternative finance has undoubtedly contributed to OFF3R&#8217;s meteoric success set up by a serial entrepreneur and investor, it <a href=\"http:\/\/realbusiness.co.uk\/article\/33097-off3r-the-tinder-style-platform-making-waves-in-the-equity-crowdfunding-space\">became one of our Everline Future 50 2016 success stories<\/a>.<\/em><\/p>\n<p><em>Lex Deak is founder of <a href=\"http:\/\/off3r.com\/\">OFF3R<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Investments made through equity crowdfunding in 2015 totalled &pound;245m and it now makes up almost 16 per cent of all seed and venture stage equity investment in the UK. As such, OFF3R founder Lex Deak unveils how to find the best crowdfunding opportunities.<\/p>\n","protected":false},"author":415,"featured_media":12994,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[2080],"tags":[2016,2083,3142],"class_list":["post-12993","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-raising-finance","tag-advice-amp-guides","tag-crowdfunding","tag-equity"],"views":943,"_links":{"self":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/12993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/users\/415"}],"replies":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/comments?post=12993"}],"version-history":[{"count":0,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/12993\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media\/12994"}],"wp:attachment":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media?parent=12993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/categories?post=12993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/tags?post=12993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}