FinnCap – a London brokerage for small-cap companies listed on the London Stock Exchange’s secondary AIM market – is the firm behind the new platform. FinnCap will partner up with equity crowdfunding platform InvestingZone in order to deliver the new hub. InvestingZone – which up to now has focused on the crowdfunding of unlisted companies – seems to have kept a relatively low profile. The relatively new platform has already financed some pretty large deals – as much as £700k a pop – and is over the £2m mark in cumulative funding.
FinnCap has indicated that the new service, which remains nameless for now, will be used by AIM-listed companies seeking alternative methods of financing. FinnCap will conduct all the necessary due diligence on prospective fundraisers. The new initiative will set out into relatively uncharted territory – with no LSE-listed company yet having ventured down the equity crowdfunding road.
Sam Smith, CEO of FinnCap, commented:
"Traditional banking models are not providing adequate access to growth capital for ambitious listed and private companies."
"The new service allows management teams and entrepreneurs to access further sources of equity investment, and allows qualifying investors a new selection of investment opportunities."
There’s a pretty clear potential impetus for the launch of the FinnCap/InvestingZone scheme. Chapel Down recently became the first publicly traded company to attempt an equity crowdfunding round. The results were spectacular: just shy of £4m raised, nearly £2.5m of overfunding – the largest equity raise in crowdfunding history. We wrote at the time that Chapel Down’s success could be attributed largely to its public status. The campaign offered investors the chance to acquire a stake in a household name company – as well as offering them the unique luxury of liquidity in the form of the ICAP Securities & Derivatives exchange.
For FinnCap, the hope will be that a listed company-only crowdfunding operation will be capable of consistently churning out Chapel Down-like success stories. Theoretically, the new platform should be capable of a much higher average deal size than is typically seen within the equity crowdfunding space. Watch this space.