Crowdfunding News – All The Latest Updates
Hi guys and welcome to our fortnightly crowdfunding news edition, as usual we will be covering an array of interesting crowdfunding topics from around the world in five minutes. If you missed our last edition, you can catch up here. Today, we once again clock up the air miles from travelling to Canada via Kenya to ending our crowdfunding journey in Bradford.
UK Crowdfunding – A Worldbeater For Start-Ups
The University of Cambridge and Nesta have just published their report on the progress made by the online alternative finance sector during 2015. (Huffington Post, February, 2016).
The report’s findings indicated that equity crowdfunding saw very considerable growth during 2015, increasing from £84 million in 2014 to £332 million and property which also featured in this segment accounted for £87 million of equity finance.
It was also revealed that £245 million of pure venture finance came from crowdfunding platforms such as Seedrs and Crowdcube. The platforms were estimated to have collectively raised 15.6 per cent of all venture funding in the UK. This really is an amazing achievement and puts the UK on the map for starting a business.
A key point from The University of Cambridge and Nesta is that by having full access to finance will allow SMEs to create jobs. The Huffington Post mentions that 60 per cent of people employed in the private sector work for small businesses and access to finance for them is vital for the UK’s future prosperity and growth.
LSE Research Backs Crowdfunding
From The University of Cambridge and Nesta’s research to now looking at research conducted by the LSE on crowdfunding.
LSE professors Saul Estrin and Susanna Khavul believe investors in crowdfunding campaigns behave in an ‘economically rational’ way, and whilst they do collaborate there’s no evidence of a ‘stampede effect’ among investors. (Proactive Investors, February 2016)
The professors have spent two years conducting analysis of data gathered from the Crowdcube platform and have used a qualitative approach in gaining investors thoughts on crowdfunding.
Crowdcube founder Luke Lang mentions that “The findings quash concerns that the crowd is made up of naïve ‘dabblers’ who stampede into supporting pitches that seem popular or cool.” (Proactive Investors, February 2016)
He stressed that the concept of crowdfunding is a rational marketplace mechanism where both investors and entrepreneurs come together and share their expertise that leads to the crowd to make well-informed decisions.
Interested in Estrin and Khavul’s research? Read more here.
Help Kenya, Not Kanye Campaign Boosts Canadian Charity
U.S. rapper Kanye West’s plea for help with his supposed $53-million personal debt might instead lead to more donations for a African charity, based in Edmonton, Canada.
A couple of weeks ago, West pleaded for help with his finances on Twitter and even asked Facebook CEO Mark Zuckerberg for money!
He even made a shocking statement on social media that money spent funding his music is a better investment than opening “one school in Africa,” which he said wouldn’t really help “the country.” (CBC News, February 2016)
After making this outrageous comment, a former Kanye fan, Gabriel Ferrer, created his very own crowdfunding site called “Help Kenya, Not Kanye.” The public can donate money to 10 charities that help people in the east African country.
Todd Lorentz, the managing director of One Child’s Village stated in CBC News “What a sort of creative, brilliant idea of using the play of Kenya and Kanye, those words, to really shine the light on Africa and children and the needs of people in Africa, and specifically in Kenya”.
The Edmonton based charity relies on public donations to support Kenyan children who have been orphaned by HIV. They provide basic needs for the children, such as food, water, education, clothing and uniforms and school books.
Donations have started trickling into the foundation. Lorentz mentioned that the crowdfunding campaign has given the charity a major boost, especially considering donations have been down since the economic downturn in Alberta.
Last year the Canadian charity built a school in the capital Nairobi which currently has 200 students enrolled, and hired 10 local teachers.
Ironically, thanks to Kanye’s outrageous comments, hopefully more schools will be set up in the East African country. Serendipity has been a blessing in disguise for the charity and for the people of Kenya.
New Crowdfunding legislation Will Make It Easier For Australian Startups To Raise Capital
New legislation to allow unlisted public companies to raise money through crowdfunding from mum and dad investors has passed through the lower house. (Business Insider Australia, February, 2016)
The bill faced heavy criticism from the opposition and will allow unlisted public companies with less than $5 million in assets and turnover to raise up to $5 million via crowdfunding each year.
Shadow minister for startups Ed Husic disagreed with minister for small businesses, Kelly O’Dwyer’s statement (who mentioned that the bill will help start-ups and other small businesses that may have difficulty accessing equity funding) and stated concerns around red tape, particularly the need for startups to become an unlisted public company if they wished to raise funds from using crowdfunding.
Mr. Husic mentioned that the opposition would propose changes to the crowdfunding laws after he had reviewed the final report.
If you would like to know more about crowdfunding in Australia, check out one of our previous crowdfunding blogs which features Australian property crowdfunding. click here.
Bantams Turn To Crowdfunding For Redevelopment
League One side Bradford City has launched a crowdfunding campaign to redevelop its Coral Windows Stadium (aka Valley Parade).
The crowdfunding campaign, set up through ‘football fan-funding’ site Tifosy, is aiming to raise £250,000 to improve the facilities at the Coral Windows stadium from seat refurbishments to renovating the players’ changing rooms.
So far the campaign has raised £44,628 and has 52 days left.
Many football league teams have used Tifosy to raise funds, one that sticks out is Portsmouth’s training ground fundraising campaign which raised £270,000.
As much as we love footy at The House Crowd, unfortunately we can’t help you crowdfund your club, however, we can offer you some guides on Manchester (North and Central) and also our South Yorkshire guide. If you’re thinking of investing in these areas and are a footy fan, you’re spoilt for choice when it comes to watching quality football! <img src="https://s.w.org/images/core/emoji/72x72/1f609.png" alt="