Crowdcube is an equity crowdfunding platform (as opposed to a P2P or peer to peer platform). As an equity crowdfunder, your investment gets you a share in the equity (ownership) of the business. This differs from P2P, which is debt funding for borrowers. Debt funders’ return on investment comes from what they lend, plus interest and is usually repaid in set instalments, while equity funders’ return comes through what their stake in the business is worth. It’s also worth noting Crowdcube offer mini-bonds as a form of debt funding investment.
Key facts and figures
Minimum investment: £10
Minimum term: N/A
Requirements to invest: Anyone over 18. Might be eligible for Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) tax benefits. Should have sufficient knowledge to be able to evaluate possible investments on their merit.
Cumulative volume invested: £101,356,111
Type of borrowers: Early stage and start up businesses
Most common reasons for loan: N/A, but as an investor look for businesses seeking funds for growth
Money invested in last 12 months: £64,139,993
Crowdfunding market share % over last 3 months according to Liberum AltFi Volume Index UK: 55.52%
A Nesta study revealed that an overall return of 2.2 times the capital invested if you build a broad portfolio. However, there are no guarantees and it is more difficult to predict returns than other investments.
Getting money on the platform
Once you decide you’d like to invest, you enter your payment details. No money is taken until the pitch has made its target and you’ve reviewed the paperwork.
Do investors get a choice in who or what they invest in?
Yes, you can choose between start-up, early stage and growth businesses in a variety of sectors to satisfy your risk appetite, investment preferences and budget, and see details of each business.
Investing your money
Monitoring your account
Understanding the risks