Local businessmen create groundbreaking website

Friday 25th March 2011

Small companies will now be able to seek investment from the general public thanks to a website founded by two Exeter businessmen. Darren Westlake and Luke Lang worked with David Heard, a Partner at Ashfords Solicitors on the business model for Crowdcube, a website that makes it possible for people to buy shares in start-up and growing businesses.

Based at the University of Exeter's Innovation Centre, Crowdcube is the first "crowdfunding" website in the world to offer ordinary people shares in small companies in exchange for their investment. It aims to make access to finance easier for entrepreneurs of newly formed and growing small businesses.  Instead of competing for limited business angel or venture capital funding, start-ups can use Crowdcube as a platform to connect with a nation of ‘armchair dragons’ to find investment.

Entrepreneurs can showcase their business and investment potential to thousands of micro-investors by uploading a ‘Dragons’ Den’ style video pitch, images and supporting documents. Spreading the word about a pitch is made easy via Facebook, LinkedIn and Twitter sharing links on their dedicated Crowdcube webpage. People can support an idea, person or business by investing small amounts of money – from £10 – in exchange for shares in the business.
Darren Westlake, co-founder and Managing Director of Crowdcube says:  "We were driven to create the website because we had experienced first-hand the real challenge of securing business funding, particularly in the current economic climate, where banks are adopting a no-risk approach to lending. Other forms of funding, such as approaching "business angels" or using venture capital firms are difficult for small business owners to access. We wanted to empower the public to pool small amounts of investment money and give Britain's start-ups a much-needed boost.
 
"Without the invaluable help of Ashfords LLP, and their legal expertise,  we simply couldn't have set up the site ."

David Heard, a Partner at Ashfords LLP, who carried out research to enable Darren to set up the site, said:  "This groundbreaking site is a world first in that it enables members of the general public to buy shares. When I first heard about the plans for the project I was intrigued, and very happy to support what I considered to be an extremely pioneering scheme. I feel it is vitally important to encourage an entrepreneurial spirit in the local community, particularly in these tough economic times."

Crowdcube believes that it could make the difference to the success of the five million small businesses in Britain seeking to start or grow.  Westlake continues, “Because Crowdcube gives people the chance to become ‘Armchair Dragons’ by investing modest sums of money in exciting business opportunities, small businesses have a better chance of securing funding for their businesses.  We can crowdfund Britain’s economic recovery.”

Businesses registered to find finance through Crowdcube at launch include equine-assisted psychotherapy business Equus Solutions, denim company Storyboard Jeans, text marketing business U-Recommend.co.uk, online counselling, life coaching and business mentoring service Borders Counselling and Coaching and advertising business White Ad Vans. 

There is no cost for entrepreneurs to sign up to Crowdcube. Crowdcube receives a five percent success fee. If the target funds are not met, investors get their money back and no success fee is charged to the entrepreneur. Start-up ventures can register their business idea or company at www.crowdcube.com.