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Who Raises Money in Crowdfunding?

Headline grabbing deals in the music industry - the Arctic Monkeys, Sting, Marillion, Amanda Palmer….the list goes on…. were a great boost to Crowdfunding, being used as a means of pre-selling albums. However, based on equity deals, the biggest market remains Information Technology, followed by Industrials and Business/Professional Services. Media, Retail, Leisure and Entertainment are about half the size.


Running a Crowdfunding Campaign

Raising any type of finance is time-consuming and for most companies, unsuccessful. Having decided to raise finance and selecting Crowdfunding as the means it is essential to do homework. There are many blogs on the internet offering advice and snippets of information on what you should and should not do. There is little value in repeating them here. Instead, there are a number of points that you really should consider:

  1. How much cash is needed and for what period?
  2. How much time do you have to dedicate to fund-raising?
  3. Is crowdfunding the only route, or should you be looking at other sources?
  4. What are you offering in return for the investment?
  5. Which is the most suitable platform?
  6. Can you obtain a realistic proportion of the funds quickly through personal contacts?
  7. Do you understand the marketing required?


The Future of Crowdfunding

Many industry reports expect the Crowdfunding platforms to consolidate and the market to grow substantially. A degree of regulation will be required, which will increase costs. Crowdfunding is eating into the market used by Angel Investors, but this may lead to a consolidation in the market where Angel investors with particular interests who invest a substantially larger amount can sit alongside those making much smaller investments.


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