In this Crowdcube review, we will discuss all the essential information regarding the investment platform.
If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).
The platform is recommended for those looking to diversify into private businesses, but caution is advised, as investing in smaller businesses involves high risks. It always makes sense to reach out to an expert when unsure how to proceed.
What is Crowdcube?
Crowdfunding is the process of assisting startups by providing capital, connections, professional guidance, etc.
In general, equity crowdfunding platforms collect money from a group of people and use the pooled funds for the development of a project or venture.
In the UK, Crowdcube is among the major equity crowdfunding platforms known to assist several entrepreneurs in attaining success.
The platform is available in several countries like the UK, Spain, France, Germany, and Sweden.
Crowdcube Investment Models
Crowdcube offers two investment models: Equity-based and Fixed Income.
The Equity model involves owning a share in the business, with benefits from dividends and gains upon selling the investment.
The Fixed Income model entails giving a loan to a company in exchange for fixed annual interest. The review focuses on the Equity-based model due to its appeal.
Investing in the investment platform involves browsing through business pitches, key information, and financial data, and watching pitch videos.
Interested investors can go to the Crowdcube login page, create an account, click the “invest” button, provide details, and specify the investment amount (minimum £10).
Payment is simple, and funds are only withdrawn if the business reaches its funding target.
The platform handles due diligence, paperwork, and issues share certificates upon successful funding.
Crowdcube Key Stats
Since its establishment in 2013, the platform has played a pivotal role in supporting mission-driven businesses, successfully raising over £1.4 billion for more than 1,300 enterprises.
With a growing community of over 1.7 million members, the platform continues to thrive.
In the latest month (January 2024), it welcomed 7,283 new members, facilitated 7,976 unique investments totaling £5.1 million, and recorded 194,000 site visitors.
Types of Businesses
Crowdcube deals with private businesses in various stages: startup, early stage, and growth.
Tax incentives, such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), offer:
- Income tax relief
- Capital gains tax exemption
- Loss relief for qualifying early stage businesses
Investing in the equity crowdfunding platform involves risks, and returns are not guaranteed.
Diversification is essential to mitigate risks. Crowdcube is suitable for those looking to diversify their assets, support businesses they believe in, and optimize their tax strategy.
However, it may not be suitable for those seeking quick short-term gains.
Alternatives to this platform include Seedrs and Bnk to the Future.
Crowdcube is authorized and regulated by the Financial Conduct Authority, ensuring a trustworthy platform.
Due diligence is conducted on businesses, and investors must be registered as sufficiently sophisticated.
Crowdcube vs Seedrs
Seedrs charges investors 7.5% of their profits only if the campaign succeeds, with no management or administration fees.
Campaigners pay a 6% success fee, a 0.5% payment processing fee, and a £2,500 completion fee.
Seedrs’ Private Live round is 14 days, with no extensions, and the Public Live round is 40 days, potentially extended.
Crowdcube features a 1.5% investment fee (capped at £250), a 7% success fee on raised funds, and completion and processing fees.
The equity crowdfunding platform offers class A shares and has a 30-day Private Live round, extendable, and a 30-day Public Live round.
Seedrs and Crowdcube are expected to merge, which may transform the equity crowdfunding platform scenario in the UK.
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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
