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In July this year the word crowdfunding was searched on Google 450,000 times. You can crowdfund anything – from baking your mum an apple pie (yes, that happened), to your garage band’s debut. But that’s not where the real revolution’s taking place.
The given (and glamorised) side of crowdfunding is the ‘crowd’ bit. Collective judgements, coming together to support (or not) great (or not so great) ideas. This is largely emotional, creates excellent stories and in most cases, is forgotten as soon as it’s over.
But behind the apple pie legends and hype, there are some of the most exciting developments in finance. These are the stories that don’t support the buzzword.
Now more than ever people are becoming bedroom investors, but not the kind that buys into rewards and favours in return for money...
This a different kind of crowdfunding, which doesn’t take the crowd bit first. At its core are the principles of investing and earning returns. It’s smart, researched, has long term and very real benefits to the investor and, most importantly, has revolutionary impact on the economy. Crowdfunding is becoming a major new way to finance the economy and fund entrepreneurship, with figures raised globally on course this year to surpass VC and Angel funding levels (Forbes). In the UK, the market is expected to raise £4.4bn in 2015 (nesta.org), with globally more than 1,250 crowdfunding sites in existence (Massolution). Not an apple pie or garage band debut in sight for many of them. Some of those crowdfunding sites are at the very forefront of technology. Truly putting the fin into fintech.
The first crowdfunding platform started around 2010. Since then there has been an explosion in investment-based crowdfunding, with more than 200 dedicated websites launching in the UK. And the numbers are growing – fast.
The types of investment crowdfunding are diverse: equity, lending to consumers, lending to businesses, bonds, debentures, invoice-trading, property – the list goes on. They all work in different ways and the difficulty comes with picking the right method. There’s simply too much choice and not enough awareness.
Which is why we started investUP
investUP was created to support prospective and professional investors in negotiating the world of crowdfunding. We’ve created a single place where investors can access deals from over 18 crowdfunding sites, manage these through a central portfolio and not just lend to businesses, but also buy shares and long-term bonds. We're working hard to create an environment where transparency, accessibility and understanding help investors to make informed, responsible discoveries and investments that have meaningful benefits.
For us, crowdfunding for the retail investor is an exciting prospect, but it should be informed, supported and balanced. We’re mining data. This helps us understand the market better to predict what’s in the nation’s crowdfunding shopping bag.
We’re also creating a resource base, where investors can share, learn and actually understand what finance is all about. There’s a revolution going on for those in the know. Our objective is to change this, and make it a revolution for everyone.