New Platform Looks to Push the Limits of Equity Crowdfunding

By AltFi on 30th September 2014

Equity Crowdfunding

A new face has emerged within the UK’s vibrant equity crowdfunding scene.

New Platform Looks to Push the Limits of Equity Crowdfunding

VentureFounders is looking to the push the boundaries of what is possible via the process of equity crowdfunding. The new platform’s focus will be placed firmly on sourcing only the most attractive investment opportunities for its investors. VentureFounders will be targeting young businesses that demonstrate the following qualities:

  • High growth and profit potential
  • A sustainable competitive edge
  • An obvious path to commercialization
  • A strong management team
  • Viable monetization options

Let’s take a closer look at one of the first active fundraises – Sapient Sensors – which is looking to raise £1.65m. Sapient is developing a simplified diagnostic device for Bovine Tuberculosis. But does it tick all of the above boxes?

A glance at the financial projections document tells you that the business expects to hit profitability in 2018 – and also to exhibit a pretty rapid growth in profits from that point onwards. A competitive edge? Every young entrepreneur will tell you that their business has it. Sapient is no exception – describing itself as “a revolutionary new product to address a growing global problem”.

In terms of commercialization, Sapient is addressing a huge market. TB is the second most lethal disease worldwide with 8.6m new cases reported every year. Sapient plans to first develop a range of devices to better detect TB, but further down the line it intends to license its technology to the world’s leading medical devices companies.

Extensive details of the management team may be perused as part of the pitch. A very small amount of detail about Sapient’s exit plan is also included. Though a number of years away from being realized, the company envisages a trade sale to a major medical diagnostic company as the most likely exit route.

Sapient seems to more or less fulfill all of VentureFounder’s requirements. But what’s really impressive is the depth of information available via the project pitch.

VentureFounders has been founded by a pair of former investment directors – James Codling and Paul Moravek – formerly of JPMorgan, Merrill Lynch, and Montagu Private Equity. James and Paul, along with their investment team, will play a critical roll in due-diligencing every prospective fundraiser that comes to the site. Their goal is to produce a next-level platform, both in terms of professionalism and transparency.

In keeping with the general air of professionalism, the minimum amount that may be raised by a business via the platform is a hefty £250k – with the maximum amount standing at £2m. VentureFounders is going after high net worth investors – with a minimum investment size of £2,500.

Consistently showcasing deals that have truly “viable monetization options” is going to be a challenge for VentureFounders. As mentioned, every campaign on the site includes some explanation of the business’ exit strategy. That strategy generally reads something like: “we’re an attractive acquisition target, or will be at some point in the future”.

Encouraginly, however, VentureFounders don’t simply get projects funded and then forget about them. The nascent platform maintains a relationship with its business fundraisers and provides ongoing support in order to propel those businesses on towards reaching their goals.

So, will VentureFounders’ vision catch on? Well, the brand new platform has already posted a fully-funded £525k campaign. 3 active projects on the site are looking to raise around £3m collectively – with nearly £1m of that total already accounted for. Rarely do you see a platform garner such instantaneous traction – a sign that the VentureFounders model could be just what many equity-minded investors have been waiting for. 

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