Crowd Funding Stewart Horne

1. Crowd Funding Stewart Horne BUSINESSINFOPOINT.CO.UK

2. Start Up & Grow It has been made available to support pre-start businesses who have the potential for growth and to create employment opportunities. The support may include a mix of: • One-to-one advice with an experienced business advisor • Business skills workshops • Telephone and email support – culminating in the preparation of a plan for the business. It will cover all aspects of setting up and growing the business including but not limited to business and financial planning, marketing, taxation and human resources.

3. Growth Support It has been made available to support existing businesses wishing to grow, expand or who just wish to have an outside view of their current business. The support provides: • An initial face-to-face meeting with an experienced business advisor • An opportunity to commit to a further 9 hour support package including an assessment of digital opportunities and financial understanding, with a possibility of looking at innovation and marketing within your business, depending on needs. • Can register online here: https://www.heartofswgrowthhub.co.uk/gsp-apply/

4. Innovation In Heathy Ageing • Business Support- up to 12 hours for businesses serving the older population • Grant of 60% of project to develop new product or process £5-£75K • Business could be in the care sector or supplying the care sector • Student placement support available to develop the project

5. CIAG- Creative Innovation and Growth Grants Fund • Funded by Devon County Council Adult Social Care • Revenue grants from £5000 and up to £40,000 50% not for profit 60% • Capital grants must be between £20,000 and £80,000 40 % not for profit 50% • Mixed capital and revenue grants (grants sought for revenue and capital • costs), must be between £20,000 and £80,000 intervention rates as above.

6. Grants Attractive – as they do not have to be repaid!! But not cost free? Effort and time to prepare a successful application Usually 3 – 4 months period from initial contact to receiving the cash! Usually paid in arrears Despite the problems – would have to work for considerable time to earn the same amount of profit

7. What we’re going to cover • What is Crowd Funding • Crowd Funding for borrowers • Crowd Funding for lenders • Recent developments in Crowd Funding • Alternative Funding sources

8. What is Crowd Funding? • Firstly its NOT new • Think Poldark & private lending • Open to all with the advent of on line platforms

9. Why would you use Crowd Funding? • Conventional sources unwilling to lend • Build project not mature enough for mortgage • Business in early stage of development- no track record

10. The Process • Peer-to-peer lending works on a simple model, people sign up to the platform as either a borrower or a lender. • The borrower submits an application for a loan. • The lending platform leverages technology and online data to quickly assess risk, figure out a credit rating and assign an appropriate interest rate. This whole process is completed within hours or even minutes. • Now the loan is available for investors to fund. Investors can be individuals, private companies or financial institutions and typically invest in many different loans to spread their risk.

11. Donation / Reward Crowdfunding People invest simply because they believe in the cause. Rewards can be offered (often called reward crowdfunding), such as acknowledgements on an album cover, tickets to an event, regular news updates, free gifts and so on UK Sites include: www.banktothefuture.com, www.fundit.buzz, www.crowdfunder.co.uk, www.justgiving.com, www.pleasefund.us,www.kickstarter.com

12. Donation / Reward Crowdfunding • Example The Railway Inn Winchester • Aim to raise £31900 • Rewards; Tee Shirt -£25 • Tee Shirt and Pint Glass-£35 • Up to £5000- two free drinks whenever you visit, no charge for any activities plus 2 free venue bookings. • https://www.crowdfunder.co.uk/railway

13. Debt Crowd Funding Investors receive their money back with interest. Also called Peer-to-Peer (p2p) lending, it allows for the lending of money while bypassing traditional banks. Returns are financial, but investors also have the benefit of having contributed to the success of an idea they believe in. Sites include: www.abundanceinvestment.comwww.simplebacking.co.uk, www.fundingknight.com, www.trillionfund.com

14. Debt Crowd Funding Interest Rates • Level of Interest payable depends on the level of risks • Mainstream banks range from 3-4% to 19% • Peer to Peer from 6.5% to 18-20%

15. Debt Crowd Funding Folk to Folk Minimum £50,000 @ 6.5% interest only over 5 years Fees 1% plus £1500 plus solicitors fees Ist charge taken over security Secured on property with Loan to Valuation circa 60% forced sale value.

16. Equity Crowdfunding People invest in an opportunity in exchange for equity. Money is exchanged for a shares, or a small stake in the business, project or venture. As with other types of shares, apart from community shares, if it is successful the value goes up. If not, the value goes down. Sites include: www.crowdcube.com, www.downingcrowd.co.uk, www.seedrs.com, www.propertypartner.co

17. Equity Crowdfunding OWNTHELOOK.COM is an online global womenswear store focusing on outfit dressing for the everyday woman. Launched in March ‘17 with over 40 emerging brands, they were titled “The new ASOS” by industry experts and have been featured widely in the media including Vogue, InStyle, and The Telegraph. Seeking £175,000 for 21.26% equity – Pre money valuation £875,000 Exit strategy- sale of business in 3-5 years.

18. What do you need when using Crowd Funding sites for Funds • Business Plan – for all sites • Financial details • Valuations of assets • Some or all of the above are available for investors to see. • Are used by the platform to decide rates of interest charged to borrowers.

19. And Finally – borrower or lender! Do your research on the platform. Trust pilot – be a little cautious but gives a trend Local knowledge P2p forums- unbiased but probably more negative users so again digest carefully. Due Diligence- Companies House FCA registered If lending don’t accept everything in the documents supplied by the platform, particularly valuations.

20. Start Up Loans • Government backed personal loan • Up to £25,000 per partner • 5 year loan at 6%, no fees • No security required. • Available for start up businesses up to 24 months trading.

21. Finding Grants • Government website • https://www.gov.uk/business-finance-support-finder/search • https://new.devon.gov.uk/fundingnews/fund/category/business-funds/ • Grants for social aims: https://new.devon.gov.uk/fundingnews/fund/category/social-funds/ • Subscription option (£15 / £25) • http://www.grin.coop/

22. Grants

23. Grants for Child Care Provision • There are three types of grants available. • A £500 grant for an early years childminder or childcare provider on domestic premises • A £1,000 grant for an early years childminder or childcare provider on domestic premises of children with special educational needs and disability (SEN/D) • A £1,000 grant for a Childminder Agency (CMA). • Please note that from 1st May 2017 if you have been registered with Ofsted for longer than 3 months you are not eligible for a grant. This rule will be strictly upheld.

24. Questions? Thank you businessinfopoint.co.uk