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A Government Backed Crowdfunding Platform?

After months of offering vehement support for the alternative finance sector, the UK government has just gone a step further in supporting early-stage businesses.

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JustInvesting has forged a partnership with the Department for Business, Innovation and Skills (BIS). JustInvesting will now become the official online marketplace for the BIS’s GrowthShowcase – another platform which matches accredited investors and venture capitalists to high-growth small businesses in need of funding.

JustInvesting aims to address the “Series A” equity funding gap. The platform will do this by making it easier for professional and institutional investors to deploy capital into companies at a very early-stage. It’s at this pivotal point of development that many budding businesses struggle to get funding.

The GrowthShowcase is a partnership that supports entrepreneurs and businesses in their infancy.  Growth Accelerator, which is one half of the partnership, is a unique service that loops young businesses into new investment sources, ideas and strategies. Growth Accelerator has already nurtured over 18,000 growing businesses. The other half of the union is Innovate UK – the UK’s innovation agency which has worked with 4,900 companies and 150 research organisations.

Paul McGuire – CEO of JustInvesting – explained:

“We are excited to announce the GrowthShowcase partnership which will bring the benefits of the JustInvesting platform to the many thousands of British companies backed by Growth Accelerator and the Technology Strategy Board.  This partnership will create greater visibility of the early-stage UK venture market, improving access to follow-on funding for companies and helping to leverage the initial investments made by our GrowthShowcase partners.”

The joint initiative also involves the British Business Bank and UK Business Angels Association. Nigel Walker of Innovate UK also weighed in:

“We absolutely recognise the importance of angel investors in supporting these enterprises. GrowthShowcase is just one way in which we are working to support entrepreneurs and the early stage investment community, and we look forward to working with the JustInvesting team, benefiting from their expertise in this space.”

This development chimes nicely with recent government promises to do more to support small businesses, as well as with its plans to help promote the buzzing UK alternative finance space. But can the government-supported JustInvesting site be counted as a crowdfunding platform? We believe so. The model is actually not dissimilar to that of Angels Den – an equity crowdfunding hub that is solely focused on accredited investors. It will be fascinating to observe what kind of dealflow an association with the BIS can generate. 

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