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Crowdfunding

Illustration shows three hands putting coins and cash in to a box which has a light bulb underneath.
Crowdfunding is a method of generating funding for a service or project from a number of people, normally through social media or the internet.

There are 4 general categories:

  • equity-based
  • donation-based
  • debt-based
  • rewards-based.

It is estimated that by 2020, crowdfunding will raise £15 bn for British innovators, entrepreneurs, community groups, artists, sports people and others.

Crowdfunding platforms include:

Kickstarter (external link) is made up of a community of people to make projects happen.

Funding Circle (external link) is an alternative finance industry provider.

CrowdCube (external link) enables the ability to invest alongside professional investors.

Indiegogo (external link) if you have an idea, you can start a campaign and raise funds.

Nesta (external link) is an innovation charity supporting ideas that meet the aim of the charity through grant funding, direct investment or challenge prizes.

You can read further information about crowdfunding on our Business Wales website (external link) which gives an overview and lists the pro's and con's as well as finance sources.

Nesta’s online directory (external link) helps you to source funding tailored to your needs and is a directory of all crowdfunding platforms in the UK.

Crowding In” (external link) this Nesta report will help you to explore the possibilities of crowdfunding. And Nesta’s publication “Working the Crowd: A short guide to crowdfunding and how it can work for you” (external link) asks if crowdfunding is right for your business.

Nomine Trust published this useful publication “Spring Giving Insight – Crowdfunding – The Wisdom and wallets of crowds” (external link) providing a mix of strategic and operational instructions and guidance, which contains many links and useful contact information.

Big Innovation Centre the UK’s hub for knowledge sharing, investment and growth produced this policy briefing “The future of crowd-sourced funding in the UK” (external link).

The Financial Conduct Authority (FCA) has produced this guidance on crowdfunding (external link). In October 2013 they produced a consultation paper “The regulatory approach to crowdfunding (and similar activities)” (external link). This paper is relevant for consumers and consumer organisations with an interest in crowdfunding and similar activities. They also produced a policy statement which has a summary of responses to the consultation (external link).