Crowdcube is the world’s first crowdfunding website that gives investors equity in the companies they fund. It uses the web-based notion of ‘crowdfunding’ where a community of like-minded people pool their money and knowledge together to back an idea, business or person. We asked co-founder Luke Lang about how they started up.
How did you come up with the idea?
My business partner and I both have personal experiences of the challenges facing small businesses seeking to raise finance so we both know first-hand how difficult it is. Banks aren’t lending and business angels have been left battered and bruised by the economic turmoil. The eureka moment was watching Dragons’ Den and thinking that I’d like to invest when the TV dragons didn’t. I didn’t have £50,000 to invest but thought that there must be other people out there who could invest, say £50.
How did you finance it?
We financed Crowdcube privately through friends and family after giving up on business angel networks and speaking to the banks. It is ironic and very much supports the need for a new solution to bridge the funding gap for small and start up businesses.
How was it marketed?
On a shoe string. We knew that Crowdcube was a hugely innovative model and deserved good press coverage if pitched correctly. It’s simple message of ‘providing an alternative route to finance for Start up Britain’ and ‘Allowing a nation of Armchair Dragons to invest in small businesses’ was a very compelling story in the midst of a recession. We have also focused on social media and face-to-face networking and public speaking to get the message out there.
We plan to focus on delivering the next generation of equity finance. We are just getting started at the moment and there is plenty more innovations that we have in mind to improve the Crowdcube platform and make finance for small businesses easier.