A steady stream of publicly traded companies are venturing towards the equity crowdfunding space.
The latest is ICAP Securities and Derivatives Exchange (ISDX) listed Capital for Colleagues – an investment vehicle which provides financial support to UK SMEs that are either already employee owned, or that are looking to become employee owned. Last Thursday the company kicked off a £250k round on CrowdBnk – offering 5.58% equity in the company. Capital for Colleagues indicated that it could take on up to £1.3 million, subject to investor demand. After just 4 days, the company has already attracted over £115k of investment – and 24 days remain for that total to multiply.
John Eckersley, CEO of Capital for Colleagues, weighed in:
“As one of a very limited number of funders focused exclusively on the Employee Owned Business sector, it is important that potential investors fully understand what we do and the value of it. Our crowdfunding offers investors the opportunity to invest indirectly in a portfolio of more than 20 different employee owned businesses and to be part of the expanding employee ownership sector, which is proven to offer good returns and a range of social benefits.”
The success of Chapel Down – the last publicly listed company to stage an equity crowdfund – is well documented. The winemakers initially sought to raise around £1.65m via the Seedrs platform, and ended up overfunding by more than £2m. Like Capital for Colleagues, Chapel Down also trades on in the ISDX.
We’ve also seen two examples of companies effectively hosting part of an impending IPO on an equity crowdfunding site. Mill Residential REIT, for instance, met with great success in raising around £1.5m via SyndicateRoom. Domaine Chanzy, which launched only a week ago on Seedrs, has already accrued nearly £200k.
There is a tangible demand among equity crowdfunders for listed company offerings – and the early signs indicate that Capital for Colleagues has been equally well received.
Mr. Eckersley also pointed to the use of film – in this instance delivered by Context Productions – as an invaluable aid to the campaign’s early effectiveness:
“We found film to be an invaluable tool to help explain and promote our investment case in an engaging and visually-effective manner whilst allowing us to maintain a sense of our identity and personality.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.