What is the best software for launching an online Equity Crowdfunding business
The best solution in equity crowdfunding platform choosing is to find one which is based or has an agency in the UK. As the project is planned to be launched in the UK, there can be a need to contact the platform itself or its agents regarding legal issues.
The main equity crowdfunding platforms based in the UK are:
Seedrs Characteristics: minimum investment - £ 10; platform fee: 7,5%; A shares (Butler, 2013).
Risks: low level of liquidity; possible business failure (D'Arcy, 2015).
Successful project: Told to have a great year due to raising > £ 1 million for twenty six startup projects. For example, E Car Club (electric cars) raised £ 1 hundred thousand from sixty two founders (Forbes, 2014).
Crowdcube Characteristics: minimum investment - £ 10; platform fee: none; no A shares (Butler, 2013).
Risks: unsecured investments; loss of interest to the product; lack of liquidity and dividends; possible dilution (D'Arcy, 2015).
Successful project: “Escape the City” – raised £ six hundred thousand in twelve days. The platform is likely to grow (Forbes, 2014).COTS, hybrid and bespoken approachesIf choosing between COTS, bespoke and hybrid routes, we should clearly understand what each of them is. COTS crowdfunding product is fully customized by the developer.
Investors can’t change or add options to the product. This approach is good for large businesses when the product is well known and desired. If Microsoft Office were a crowdfunded product, it could have been a great example of such approach (Valančienė & Jegelevičiūtė, 2014). Bespoke approach is pretty good when you are a beginner and you feel like studying the market before developing the product. The huge minus here is that customers, investors, and developer will surely have the different opinion at some point. There is a huge risk of failure due to the absence of the result. But still, it is a great opportunity to find out potential customer’s needs. Really popular and optimal approach is a hybrid one.
The well-known phrase “Client is always right” is the key. When developing the product it is important to be closer to the customer ('10 Ways to Make Customers Fall in Love with Your Business', 2015). When showing the product in different development stages, the developer can gain a lot of useful advises from crowdfounders and potential buyers. Being transparent is also a great way to advertise the project (Alois, 2014).
Alois, J. (2014). Hybrid Crowdfunding Site Vision Launch Schedules March Go Live |. Crowdfundinsider.com. Retrieved 24 July 2015, from http://www.crowdfundinsider.com/2014/02/32843-hybrid-crowdfunding-site-vision-launch-schedules-march-go-live/
Butler, A. (2013). Top 10 Crowdfunding Sites in the UK. KindredHQ. Retrieved 24 July 2015, from http://kindredhq.com/top-10-crowdfunding-sites-uk/
D'Arcy, C. (2015). The top crowdfunding sites. Lovemoney.com. Retrieved 24 July 2015, from https://www.lovemoney.com/news/47280/the-top-crowdfunding-sites
Valančienė, L., & Jegelevičiūtė, S. (2014). Crowdfunding for Creating Value: Stakeholder Approach. Procedia - Social …