A new face has emerged in the equity crowdfunding space. Volpit – which launched last week – has arrived on the scene already equipped with an FCA licence.
Volpit has elected to place transparency and standardization at the core of the platform. Businesses looking to raise money on the site will have to create a campaign using an interactive pitch builder. This innovative tool, through the use of standardized questions and required criteria, will create highly comparable pitches – a useful feature for investors. One issue with equity crowdfunding as a fundraising tool is that a business generally cannot leverage the experience of its investors in the same way that it might have had it sought traditional VC investment. Volpit has a solution for this. Post-funding, entrepreneurs stay with the platform and are able to contact their investors for advice, expertise, and so on.
AltFi caught up with Co-Founder Patrick O’Flaherty to dig a little deeper.
Why were you so keen to enter the market as a regulated platform?
We believe entering the market as a regulated platform adds significant credibility to Volpit. Our authorization and the additional investor protection it affords will increase confidence in the platform. There are few regulated platforms, therefore it is a validation that our approach to simplifying investment is on the right track.
What do you see as the major difference between Volpit and existing equity crowdfunding platforms?
Volpit streamlines and simplifies the funding process and brings it online. We achieve this by reducing complexity and saving entrepreneurs and investors time and money when it comes to raising funds and investing in start-ups:
-Pitch builder -The online Pitch builder makes creating a business plan simple and intuitive. Entrepreneurs can invite their team and answer a series of short questions to create an interactive pitch that makes it simple for investors to discover what their startup is about.
-Online legal -the platform automatically generates legal agreements. This means entrepreneurs and smaller investors can be comfortable that top city lawyers have vetted these agreements, without the cost associated with them.
-Investor/Startup dashboard - Once funded, a start-up is able to harness their crowd of investors through the startup dashboard. Similarly investors can use the dashboard to offer support and manage their investments.
-Fees -We don’t charge investors on their transactions, or their dividends. If a start-up successfully reaches their investment target, Volpit takes a 6% success fee.
Ultimately we believe crowdfunding is about more than just the funding, start-ups require investors with the right skills and connections to move forward. Volpit uses technology to make that happen.
Tell us about the importance of transparency in crowdfunding.
Crowdfunding has expanded the investment market beyond Venture Capitalists and into our everyday lives. Individuals who previously did not consider themselves investors now have the opportunity to easily invest in startups. Investing in startups involves significant risks and it is important that these new investors are made aware of these risks. Therefore it is important platforms make every effort to educate their members on the risks involved.
How is Volpit providing transparency for its investors?
Volpit ensures that potential investors understand the risks of investing by requiring all potential investors to pass an appropriateness test, which assesses their knowledge of investment. Volpit hopes to increase transparency through its online legal agreements. They were designed to be simple and match the terms commonly used throughout Tech City. This is to ensure our investors are investing on the same terms as Venture Capitalists. Volpit is also a simple way for investors to keep in touch with their start-up once funded.
What sort of projects are you going after?
Our focus is on UK tech startups that are looking for their first SEIS investment round. We also get many start-ups join the platform looking to raise further capital. We are constantly on the hunt for game changers.
What are the platform’s fees?
We don’t charge investors on their transactions, or their dividends. If a start-up successfully reaches their investment target, Volpit takes a 6% success fee.
Where do you see Volpit a year from now?
Volpit hopes to change the way start-ups get funded and set a new standard. In a year from now we hope to help fund 30 start-ups. We will always focus on making it easier and simpler to raise funds and invest.