The MoneyLab Blog

Structuring your pitch deck - how to get it right?

Posted by Michael McDowell, Sapphire Capital on 10-Sep-2018 13:01:01


The first contact many investors will have with your business is an introductory email with a pitch deck. However, too often a pitch deck is just:

  • a high-level business description;
  • a long exploration of an industry sector;
  • unsubstantiated financials; and
  • a biography of the founder.
I often hear entrepreneurs say that the branding and production quality of the pitch deck doesn’t matter. I don’t agree with this. Pitch quality counts as it infers how well you can promote both the company and the product. It’s true however that some investors will look beyond branding and production quality, but in my experience it’s a risk not worth taking. 
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Topics: Crowdfunding

Getting your business ready for the crowdfunding and angel platform stage.

Posted by Michael McDowell, Sapphire Capital on 16-Nov-2017 15:13:15

 

For some time the team at Sapphire have championed the use of crowdfunding and angel investment platforms. They continue to provide businesses with a stage to present their investment opportunity and the administrative systems to accept investment in an orderly manner. This has been achieved by the use of new technology and design of efficient business processes.

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Topics: Crowdfunding

How the tax man rewards you for being a crowdfunder

Posted by Michael McDowell, Sapphire Capital on 15-May-2017 11:37:35


When Airpos
board of directors decided to launch a round of fundraising they wanted to ensure it was open to as wide a community of investors as possible.  They wanted to avoid the traditional roadshow, photocopied brochures and hard sell over coffee.  They identified the efficiencies of equity crowdfunding platforms and particularly Crowdcube as the best way to raise money.  They also wanted to ensure investors receive all benefits possible from investing, including those offered from HMRC.  

AirPOS is the type of company the UK Government likes to encourage- it’s an innovative technology company that is growing quickly, employing staff that will contribute significant tax.  
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Topics: Crowdfunding

Equity crowdfunding - the new reality

Posted by Michael McDowell, Sapphire Capital on 22-Mar-2017 15:02:58

 

As the leading crowdfunding platforms grow to a new level of maturity, businesses increasingly view this as a way of raising investment. They also appreciate the opportunity to use crowdfunding to raise the businesses’ profile, attract customers, professional partners and prepare for future fund raising rounds. The challenge is to get listed on a platform but there is some transparency in what they are looking for and what they expect from a business who wants to list. It’s also clear what a company has to do to get ready:

 

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Topics: Crowdfunding

Grow Advisors Seminar Series 2016 - Essential Digital Marketplaces

Posted by Michael McDowell, Sapphire Capital on 02-Jun-2016 14:51:24

Essential Online Marketplaces - Lending & Equity Investment

London ,  29th June, 2016

Since before the global financial crisis, a new breed of financial services has been taking hold in markets as far afield as the US and China. Today, the UK itself is a world leader in equity crowdfunding and online lending platforms.

It is estimated that close to half of all investment in UK fintech relates to platform based financial services.

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Topics: Crowdfunding, Alternative Investments, private equity, seminar, fund management, platforms, fintech, p2plending, wealth management

Highlights of the 2016 FCA consultation for Peer to Peer lending

Posted by Michael McDowell, Sapphire Capital on 04-Feb-2016 17:45:50

The fastest growing and most visible area of alternative finance is Peer to Peer (P2P) lending. This was born back in 2006 with ZOPA who facilitate loans between investors and members of the public. 

 ZOPA proved to be very successful and following the banking crisis of 2008 the number and markets P2P lending services has grown quickly. There are now over 100 platforms in the UK offering investment and borrowing opportunities for individuals, businesses, property development and investment and invoice factoring.

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Topics: Crowdfunding

UK property crowdfunding - harnessing the power of the crowd

Posted by Michael McDowell, Sapphire Capital on 05-Dec-2014 11:18:55

Over the past few years the growth of crowdfunding has been remarkable.  It started as a reaction to a decline in bank lending and traditional sources of finance following the credit crunch of 2008.  Since then, we have seen Crowdcube raise over £46m from 115,000 members for start up businesses and Peer to Peer lending sites like Funding Circle facilitate over £100m of loans for small and medium sized businesses. The sector that has been slower to approach these alternative sources of finance has been real estate.

The ability to source capital for development projects or commercial property investments outside major cities such as central London continues to be very difficult. This is despite the genuine opportunity of excellent financial returns.

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Topics: Crowdfunding

What is crowdfunding? A refresher for 2014

Posted by Michael McDowell, Sapphire Capital on 18-Jun-2014 19:19:28

Over the past 18 months, crowdfunding has entered the vocabulary of the business community, but it can mean very different things to different people. There are currently circa 87 crowdfunding platforms operating in the UK.  They are offering investors the opportunity to lend to business, buy equity in start ups and growing businesses, support projects for rewards or buy a new product which is still in development.  This has led to a lot of confusion in the market place as the definition of what exactly crowdfunding is has become very broad.

Usually crowdfunding platforms are classified as being loan-based (P2P lending), investment-based or a rewards based model.  These classifications have been adopted by the FCA in their recent policy statement (PS14/4) but what do they mean?

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Topics: Crowdfunding

Top 10 ways to get your business listed on a UK crowdfunding platform

Posted by Michael McDowell, Sapphire Capital on 14-Mar-2014 16:12:00

From an investor's perspective it is reassuring to know that the leading UK equity crowdfunding platforms list less than 10% of the businesses that approach them.  It's therefore important for entrepreneurs to understand their selection criteria.  There isn't a simple prescriptive list but here are some key principals that should be followed.  From our experience, the following are the top 10:

1. It's all about you.

It's you who will deliver on the investment.  It can be a world class product or service but if you can't deliver, no one will profit. You therefore have to convince the platform that you have the skills, experience and track record to create a success using the funds invested.  You also have to convince the platform that you will be able to engage and connect with potential investors as well as being easy to work with and can be a good leader.  

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Topics: Crowdfunding

Crowdfunding: The FCA needs to hear from you!

Posted by Michael McDowell, Sapphire Capital on 07-Dec-2013 19:31:00

The UK Crowd Funding Association (UKCFA) have launched a PlaceSpeak topic to encourage their members and others with an interest in Crowdfunding to voice their opinions and join the debate on the future of Crowdfunding in the UK.

Crowdfunding is a recent development in the financial services sector. It is the practice of businesses borrowing money or selling equity to a large number of small investors. The two main models are the sale of equity and peer to peer lending.   The FCA views the offering of other debt securities such as debentures as an equity investment. This is due to the perceived level of risk despite the fact that it is a form of peer to peer lending. Others in the design, technology, arts and charitable sectors have adopted the sponsorship/donation or reward model.

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Topics: Crowdfunding

Is it time for Crowdfunding to grow up?

Posted by Michael McDowell, Sapphire Capital on 07-Dec-2013 19:21:00


With the success of Funding Circle, record breaking months of money raising with Crowdcube and Seedrs and new platforms launching every week, a few questions remain unanswered.  Why are most Enterprise Investment Schemes ("EIS") still being promoted with a scruffy PDF and a long trudge through IFA firms, hotel lobbys and coffees shops? Why is it that it appears to be only the more risky startups and not the established profitable businesses, that are looking to expand via crowdfunding? And of course, the question that I am constantly thinking about, should the term crowdfunding be permanently dropped from the business community and replaced by the more appropriate description of what really is happening i.e. crowdinvesting?

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Topics: Crowdfunding, EIS Schemes, investing, seedrs, crowdcube, high net worth, sophisticated investor, angel networks, angelsden

Reducing the fear of regulation and fraud from equity crowdfunding

Posted by Michael McDowell, Sapphire Capital on 11-Sep-2013 16:01:00

There are two big fears when it comes to equity crowdfunding.  Platforms fear regulation and everyone fears fraud.  Both unfortunately are likely, but signs are that these fears will be reduced by a collaborative approach from the FCA and the crowdfunding platforms themselves.

The Sunday Times recently reported that crowdfunding, will face regulation by next April 2014.? The FCA spokesperson said: “We believe most crowdfunding should be targeted at investors who know how to value a start-up business, and who appreciate the risks involved and that they could lose all of their money.  We want it to be clear that investors in the majority of crowdfunds have little or no protection if the business or project fails.”

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Topics: Crowdfunding

Peer to Peer Lending Comes to the Rescue of Commercial Property

Posted by Michael McDowell, Sapphire Capital on 03-Jul-2013 22:19:00

The property professionals’ journal – Estates Gazette – had one of the most interesting editorial comment pages that I’ve seen for a long time on the 8th June.

“Suddenly, it seems, borrowing has ceased to be a problem.  New lenders are tripping over each other to offer terms, and there could be a lending surplus within 12 months.  But, as with any smoke signal to emerge from a financial institution, pay close attention to the small print.”

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Topics: Crowdfunding, peer to peer lending, UK REITs, Property Investment Funds, commercial property sector, Relendex, Funding Circle

Is Australia (not the UK) leading world in Equity Crowdfunding??

Posted by Michael McDowell, Sapphire Capital on 17-Jun-2013 20:12:00

Daily Telegraph 11th June 2013: Can the UK “lead the world” in Crowdfunding? Australia might have beaten them too it!

In an interview with the Daily Telegraph last week Jeff Lynn from Seedrs gave an excellent overview of the equity crowd funding landscape and introduced some great success stories.  The suggestion that the UK can lead the world in equity crowd funding is based on the premise that the UK have granted regulated approval for Crowd Cube and Seedrs while the US grapple with the Jobs ACT.   I would however suggest they all take a look at the Australian Small Scale Offerings Board (ASSOB).  They have helped Australian business crowd fund $133,813,078 since 2005.

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Topics: Crowdfunding, seedrs, assob, uk, australia

A level playing field for crowdfunding across Europe

Posted by Michael McDowell, Sapphire Capital on 29-May-2013 17:04:00

As the European banking sector continues to focus on rebuilding their balance sheets following the financial crisis, crowdfunding is increasingly being seen as one alternative solution for businesses to get access to funding.  The crowdfunding industry is however keen to see a degree of regulation to provide protection and confidence to everyone involved.

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Topics: Crowdfunding, seedrs, crowdcube, FCA, regulation, ireland

CBI and Vince Cable encourage businesses to look to crowdfunding

Posted by Michael McDowell, Sapphire Capital on 22-May-2013 10:59:00

The changing landscape of business finance and lending continues with small and medium sized businesses being encouraged to look beyond the main high street banks for lending and sources of funds for growth. 

As the main high street banks retreat from lending to small and medium sized businesses the CBI have published a report encouraging a revolution in business finance.  Encouraging the growth of the corporate bonds market, invoice or other factoring and crowdfunding.Crowdfunding can take the form of peer to peer lending by firms such as Funding Circle or direct equity investment through websites such as Crowdcube or Seedrs.  

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Topics: Crowdfunding, uk crowd funding association

Crowdfunding company Crowdcube raise £1.5m in record breaking time

Posted by Michael McDowell, Sapphire Capital on 15-May-2013 21:36:00

Westlake and Lang co-founders of Crowdcube.

If further proof is needed to convince that equity crowd funding is growing in reputation as well investor confidence Crowdcube have delivered it.  They used their own platform to raise £1.5 million in just three days from 259 investors. Existing investors met the initial funding target of £250,000 within the first five hours of the pitch going live, making it the fastest equity funding on a crowdfunding website anywhere in the world. The pitch was then opened up for others to invest with one million pounds being invested in the following 24 hours. The investment, which sets a new world record for funds raised via an equity crowdfunding platform, will be used to fuel Crowdcube’s next phase of growth.

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Topics: Crowdfunding, EIS, EIS Schemes, investing, crowdcube, Alternative Investments, Equity Financing

"Show me the Money" the future of crowdfunding

Posted by Michael McDowell, Sapphire Capital on 07-May-2013 12:17:00

It was interesting to read in the Guardian yesterday that  - last month Reuters reported crowdfunding had helped companies and individuals worldwide raise $2.7bn (£1.7bn) from the public in 2012 – an 81% increase on the previous year. This year the total is predicted to hit $5.1bn (£3.3bn). 

The article goes on to outline the key players in this sector - kickstarter, crowdcube, seedrs, abundance, peoplefundit.  The emphasis is on how these different players help people and businesses raise money - unfortunately it doesn't report in any detail on the returns investors have enjoyed.

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Topics: Crowdfunding, seedrs, crowdcube, FSA, Financial Services, 2013 Budget, FCA, abundance, guardian, uk crowd funding association

Crowdfunding real estate - what would Thatcher have said?

Posted by Michael McDowell, Sapphire Capital on 21-Apr-2013 20:25:00

The majority of large property deals in the UK are transacted by a handful of institutional investors or very wealthy people.  As Thatcher’s legacy is currently being closely examined, the obvious question is what would Lady Thatcher have thought about this new way to invest in real estate?  Surely she would want everyone to have the opportunity to share in this market?

This is already happening overseas.  In Colombia, for example, they have built the first crowd funded sky scrapper.  A company was formed to build Colombia’s tallest building.  A high profile advertising campaign was launched encouraging everyone  - from doctor to barbers – to invest and share in Bogata’s regeneration in return for a share in the profits.  Hard to believe I know - for those of you who doubt - watch the clip below:

Colombia sky scrapper funding by Crowdfunding

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Topics: Investment Funds, Crowdfunding, Financial Services, FCA, Alternative Investments, commercial property sector

Crowdfunding comes to the commercial property sector

Posted by Michael McDowell, Sapphire Capital on 11-Apr-2013 13:10:00


Individuals rarely purchase commercial property, it’s usually a pension fund, an investment company or an institutional investor.  What they have in common is that they put lots of different people’s money into a company structure that then buys the property and shares the proceeds.  To put it another way, it’s Crowdfunding – but – the crowd don’t always know what they are investing in and there in lies the problem.

Many would argue that property and the banks crashed because funds had targeted high yielding but extremely risky portfolios to make up short falls in other under performing assets.  The problem in my view is that investors didn’t always see the whole portfolio, so the crowd was kept in the dark and didn’t see the crash coming.

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Topics: Investment Funds, Crowdfunding, investing, Property Investment Funds, commercial property sector