The Exchanges

Q And back in 2007, where was Equity Crowdfunding at?

A It didn't exist. I mean, equity crowdfunding, you know, when Crowdcube launched in February, 2011, um, Crowdcube was the first equity crowdfunding platform, not just here in the UK or Europe, but anywhere in the world. It's, you know, we were, we were, we were truly pioneering in what we, what we did and, you know, still are today. So, you know, back in 2007, 2009, um, 2010, you know, you were starting to see The emergence of, um, Kickstarter with the reward crowdfunding side of things, um, and, and I guess before that you had, um, you know, bands and, um, you know, artists were, were using crowdfunding and crowdfunding from their fan base to, to cut their next record. Um, and we, we looked at that and how that, um, market had evolved and that industry had evolved and, and certainly in Um, 10 to the early 2011 Kickstarter was really starting to gain some traction, um, which gave us, you know, a lot of confidence that we could take the crowdfunding model to the next level and, and, you know, offer people shares and a real stake in the company rather than just, um, a t-shirt or a download.

AI assessment note: “It didn't exist. I mean, equity crowdfunding, you know, when Crowdcube launched in February, 2011”

Q Have you also seen it as a brilliantly effective form of marketing for seed companies?

A Yeah, I mean, Just Park is an example. I mean, they've had a tremendous amount of, um, press coverage off the back of what they've done. You know, they've been in the FT, they've been in the Telegraph, the Times, um, in Mail Online, City AM, so they, you know, the idea is, is capturing people's imagination. You know, they've, they've been exposed to our community of investors, which is nearly a 150,000 strong now, so I'm sure many of those people will Or go on to become just park, um, uh, uh, customers. Um, and we often see, you know, businesses that, that, that raise money on the platform through that heightened exposure and see a real bounce in, in sales after a, after a crowdfunding race.

AI assessment note: “Yeah, I mean, Just Park is an example.”

Q And back in 2007, where was Equity Crowdfunding at?

A It didn't exist. I mean, equity crowdfunding, you know, when Crowdcube launched in February, 2011, um, Crowdcube was the first equity crowdfunding platform, not just here in the UK or Europe, but anywhere in the world. It's, you know, we were, we were, we were truly pioneering in what we, what we did and, you know, still are today. So, you know, back in 2007, 2009, um, 2010, you know, you were starting to see The emergence of, um, Kickstarter with the reward crowdfunding side of things, um, and, and I guess before that you had, um, you know, bands and, um, you know, artists were, were using crowdfunding and crowdfunding from their fan base to, to cut their next record. Um, and we, we looked at that and how that, um, market had evolved and that industry had evolved and, and certainly in Um, 10 to the early 2011 Kickstarter was really starting to gain some traction, um, which gave us, you know, a lot of confidence that we could take the crowdfunding model to the next level and, and, you know, offer people shares and a real stake in the company rather than just, um, a t-shirt or a download.

AI assessment note: “It didn't exist.”

Q And you talk about this relationship. A lot of people now might see, with the rise and success of crowdfunding, crowdfunding to be actually an alternative and competing Finance model to the traditional VC model. Do you, do you agree with that perspective or do you think they are different?

A Um, I, I think they're different, but they, they do, you know, we do compete on deals, you know, from, from the very first, um, 18 months of our trading, we, we were winning deals, you know, we won, you know, a company called Escape the City, you know, they had two term sheets from, from VCs, one of them index ventures on the table, and they turned them, turned them down and elected to use Crowdcube to raise the money that they were after, you know, that was back in 2012, so it was a, You know, a long time ago, so there's always going to, there's always going to be an element of, of, of competition to the two, but I, I think that there's, there's really, because, you know, I've seen in the last 12 months a real blurring of the lines between what is, you know, friends and family funding, what's seed capital, what, you know, what's, um, angel investing, crowdfunding, VC investment, and you're starting to see that, you know, deals on Crowdcube often, you know, Encompass all of those different, um, um, sources of, of capital. You know, we've got a company on the site at the moment, Just Park. You know, they've had investment from, from Index Ventures and, and BMW, um, in, in the past, and, and Index are actually participating in this, in this round. So, you know, that's, you know, previously ordinary everyday investors wouldn't have been able, you know, wouldn't have been exposed t…

AI assessment note: “I think they're different, but they, they do, you know, we do compete on deals”

Q Have you also seen it as a brilliantly effective form of marketing for seed companies?

A Yeah, I mean, Just Park is an example. I mean, they've had a tremendous amount of, um, press coverage off the back of what they've done. You know, they've been in the FT, they've been in the Telegraph, the Times, um, in Mail Online, City AM, so they, you know, the idea is, is capturing people's imagination. You know, they've, they've been exposed to our community of investors, which is nearly a 150,000 strong now, so I'm sure many of those people will Or go on to become just park, um, uh, uh, customers. Um, and we often see, you know, businesses that, that, that raise money on the platform through that heightened exposure and see a real bounce in, in sales after a, after a crowdfunding race.

AI assessment note: “Yeah, I mean, Just Park is an example.”

Q And being the first actually equity crowdfunding platform, did you face much regulation, uh, difficulty?

A Yeah, it was, it was tremendously difficult in, in the early days. You know, the, the FCA didn't really understand what we were doing and what we were trying to achieve, and we were crowbarring ourselves into existing regulations that, that didn't quite fit with our ethos and our philosophy and where we wanted to be. So it was a, it was a long struggle, um, through that, that, that process. Um, but happily, you know, it's, You know, crowdfunding, um, equity crowdfunding, and even peer-to-peer lending, um, has its own bespoke regulation, so the FCA did a, a root and branch review of the industry, and came up with their own, um, or devised with, with a consultation with, with the industry, devised the rules and regulations and policies and processes that needed to be put into, into place, um, and that was a, that was a huge step Forward to the industry. I guess previously we'd been regulated, um, under old world regulations, um, which was, you know, like operating in a, in a, in a straight jacket, straitjacket, really. Um, so it was, it was, it was good to get that recognition from the Financial Conduct Authority, um, and, and good to have some, some clarity over the, the, the rules and regulations.

AI assessment note: “Yeah, it was, it was tremendously difficult in, in the early days.”

Q And being the first actually equity crowdfunding platform, did you face much regulation, uh, difficulty?

A Yeah, it was, it was tremendously difficult in, in the early days. You know, the, the FCA didn't really understand what we were doing and what we were trying to achieve, and we were crowbarring ourselves into existing regulations that, that didn't quite fit with our ethos and our philosophy and where we wanted to be. So it was a, it was a long struggle, um, through that, that, that process. Um, but happily, you know, it's, You know, crowdfunding, um, equity crowdfunding, and even peer-to-peer lending, um, has its own bespoke regulation, so the FCA did a, a root and branch review of the industry, and came up with their own, um, or devised with, with a consultation with, with the industry, devised the rules and regulations and policies and processes that needed to be put into, into place, um, and that was a, that was a huge step Forward to the industry. I guess previously we'd been regulated, um, under old world regulations, um, which was, you know, like operating in a, in a, in a straight jacket, straitjacket, really. Um, so it was, it was, it was good to get that recognition from the Financial Conduct Authority, um, and, and good to have some, some clarity over the, the, the rules and regulations.

AI assessment note: “Yeah, it was, it was tremendously difficult in, in the early days.”

Q And why do you think these companies are choosing the crowdfunding platform as an alternative to the VC model? And what do you think the benefits are for, for launching a campaign with Crowdcube instead of with VC funding?

A Um, well, obviously, if flexibility is, is, is good, you can, you know, drive the, the terms a little bit, a little bit tougher than you can maybe with a, with a, with a VC. Speed of finance is, is also, um, key. Yeah, you can get the money a lot quicker than you can through going through a VC's kind of often heavyweight due diligence process. Um, but often, yeah, as well as, yeah, it's, it's about, For Just Park, which is in the sharing economy as an example, and for Crowdcube, who is kind of in the sharing economy as well, it's about that engagement with our, with our community, with our customers, with our, um, um, with our clients, and, and building a very, you know, much stronger, um, relationship and bond. You know, we've, we've had companies, Eden Project, for example, which is a, you know, world, world-renowned, um, Tourist attraction down in the southwest. Um, yeah, they have millions of people that visit Eden Project every year, um, and they have finance options available to them, just like Just Park had finance options available, but they recognize the value in engaging with their, their community, and bringing their community along with them on, on their journey. Um, and the extra kind of, yeah, the, the, The, yeah, the extra value that having a, a, a group of brand advocates, um, can, can have for, for a business, particularly for a smaller business as well. You sh…

AI assessment note: “flexibility is, is, is good, you can, you know, drive the, the terms”

Q Absolutely. So Luke, what's the hardest obstacle that you've faced in building Crowdcube, the amazing platform it is now, and how did you overcome it?

A Um, well, I, I guess awareness was always our biggest challenge. You know, we always felt that we had a, a great idea, a disruptive idea, a transformational idea that could really make a difference to, you know, British businesses in, in, in the UK, and also for investors as well. We're getting the message out there, and, you know, when Darren and I launched back in Um, budget, so we were bootstrapping right from, from day one, and it wasn't until, um, you know, 12 months later that we actually raised some finance to invest in marketing, so awareness actually continues to be a challenge today as well, you know, um, but, yeah, the way we overcame it, certainly in the early days, was through, through good quality, um, PR, um, Yeah, we had a great story, and we made sure that we told it, and, you know, thankfully, there were, you know, lots and lots of journalists that were keen to write about, you know, businesses that were successfully raising finance through this, this, this new medium, exciting young businesses that were raising money, um, which I get, I, I think gave a really nice counterbalance to the, the negativity of, kind of, banks not lending, and the economic turmoil that the, the, During the, kind of, 2011, 2012, so.

AI assessment note: “awareness was always our biggest challenge... the way we overcame it... was through good quality PR”

Q And, and Crowdcube is the number one equity crowdfunding site in the UK. Um, how, there are, A number of UK competitors, though, and also a number of overseas competitors now setting up in the UK. How do you treat this competitive threat?

A Um, well, we take, we take it very, very seriously. I mean, in the early days when we were the, the, the only crowdfunding platform, equity crowdfunding platform out there, you know, we really welcomed competition because it helped to obviously validate the market and build the market, and there was other people talking and creating a buzz and hopefully other people advertising as, as well. So, you know, it certainly in the early days, it, it really did benefit us in terms of, Building that market. Um, but yeah, we're, we're firmly of the, the view that, you know, we've done more than, than anyone else to, to create the opportunity that's, you know, presented in front of us, um, at the moment, yeah, and which is growing so rapidly, and, you know, as you say, we've, we've helped fund over 200 businesses now, and, and, you know, 205 of those were in, in 2014 so it gives you an indication of how quickly we're growing this year alone bearing in mind we've only just started march you know we funded over over 20 businesses so it's growing rapidly and we're very conscious that you know the market is moving and um and we're determined to go out there and grab it with with both both hands you know we're creating um you know a world class team i believe you know if you talk about um Um, the impact and the assistance that Boulderton Capital have had, well, one of those has been in, in rec…

AI assessment note: “we take, we take it very, very seriously.”

Q Absolutely. So Luke, what's the hardest obstacle that you've faced in building Crowdcube, the amazing platform it is now, and how did you overcome it?

A Um, well, I, I guess awareness was always our biggest challenge. You know, we always felt that we had a, a great idea, a disruptive idea, a transformational idea that could really make a difference to, you know, British businesses in, in, in the UK, and also for investors as well. We're getting the message out there, and, you know, when Darren and I launched back in Um, budget, so we were bootstrapping right from, from day one, and it wasn't until, um, you know, 12 months later that we actually raised some finance to invest in marketing, so awareness actually continues to be a challenge today as well, you know, um, but, yeah, the way we overcame it, certainly in the early days, was through, through good quality, um, PR, um, Yeah, we had a great story, and we made sure that we told it, and, you know, thankfully, there were, you know, lots and lots of journalists that were keen to write about, you know, businesses that were successfully raising finance through this, this, this new medium, exciting young businesses that were raising money, um, which I get, I, I think gave a really nice counterbalance to the, the negativity of, kind of, banks not lending, and the economic turmoil that the, the, During the, kind of, 2011, 2012, so.

AI assessment note: “awareness was always our biggest challenge... the way we overcame it... was through PR”

Q And you talk about this relationship. A lot of people now might see, with the rise and success of crowdfunding, crowdfunding to be actually an alternative and competing Finance model to the traditional VC model. Do you, do you agree with that perspective or do you think they are different?

A Um, I, I think they're different, but they, they do, you know, we do compete on deals, you know, from, from the very first, um, 18 months of our trading, we, we were winning deals, you know, we won, you know, a company called Escape the City, you know, they had two term sheets from, from VCs, one of them index ventures on the table, and they turned them, turned them down and elected to use Crowdcube to raise the money that they were after, you know, that was back in 2012, so it was a, You know, a long time ago, so there's always going to, there's always going to be an element of, of, of competition to the two, but I, I think that there's, there's really, because, you know, I've seen in the last 12 months a real blurring of the lines between what is, you know, friends and family funding, what's seed capital, what, you know, what's, um, angel investing, crowdfunding, VC investment, and you're starting to see that, you know, deals on Crowdcube often, you know, Encompass all of those different, um, um, sources of, of capital. You know, we've got a company on the site at the moment, Just Park. You know, they've had investment from, from Index Ventures and, and BMW, um, in, in the past, and, and Index are actually participating in this, in this round. So, you know, that's, you know, previously ordinary everyday investors wouldn't have been able, you know, wouldn't have been exposed t…

AI assessment note: “I think they're different, but they, they do, you know, we do compete on deals”

Q And why do you think these companies are choosing the crowdfunding platform as an alternative to the VC model? And what do you think the benefits are for, for launching a campaign with Crowdcube instead of with VC funding?

A Um, well, obviously, if flexibility is, is, is good, you can, you know, drive the, the terms a little bit, a little bit tougher than you can maybe with a, with a, with a VC. Speed of finance is, is also, um, key. Yeah, you can get the money a lot quicker than you can through going through a VC's kind of often heavyweight due diligence process. Um, but often, yeah, as well as, yeah, it's, it's about, For Just Park, which is in the sharing economy as an example, and for Crowdcube, who is kind of in the sharing economy as well, it's about that engagement with our, with our community, with our customers, with our, um, um, with our clients, and, and building a very, you know, much stronger, um, relationship and bond. You know, we've, we've had companies, Eden Project, for example, which is a, you know, world, world-renowned, um, Tourist attraction down in the southwest. Um, yeah, they have millions of people that visit Eden Project every year, um, and they have finance options available to them, just like Just Park had finance options available, but they recognize the value in engaging with their, their community, and bringing their community along with them on, on their journey. Um, and the extra kind of, yeah, the, the, The, yeah, the extra value that having a, a, a group of brand advocates, um, can, can have for, for a business, particularly for a smaller business as well. You sh…

AI assessment note: “you can get the money a lot quicker than you can through going through a VC's”

Q And, and Crowdcube is the number one equity crowdfunding site in the UK. Um, how, there are, A number of UK competitors, though, and also a number of overseas competitors now setting up in the UK. How do you treat this competitive threat?

A Um, well, we take, we take it very, very seriously. I mean, in the early days when we were the, the, the only crowdfunding platform, equity crowdfunding platform out there, you know, we really welcomed competition because it helped to obviously validate the market and build the market, and there was other people talking and creating a buzz and hopefully other people advertising as, as well. So, you know, it certainly in the early days, it, it really did benefit us in terms of, Building that market. Um, but yeah, we're, we're firmly of the, the view that, you know, we've done more than, than anyone else to, to create the opportunity that's, you know, presented in front of us, um, at the moment, yeah, and which is growing so rapidly, and, you know, as you say, we've, we've helped fund over 200 businesses now, and, and, you know, 205 of those were in, in 2014 so it gives you an indication of how quickly we're growing this year alone bearing in mind we've only just started march you know we funded over over 20 businesses so it's growing rapidly and we're very conscious that you know the market is moving and um and we're determined to go out there and grab it with with both both hands you know we're creating um you know a world class team i believe you know if you talk about um Um, the impact and the assistance that Boulderton Capital have had, well, one of those has been in, in rec…

AI assessment note: “we take it very, very seriously. I mean, in the early days”