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Equity Crowdfunding

Equity crowdfunding is a way for small businesses to raise money by getting investments from people who are keen to support their project or service. In return, those people become part-owners and might make money from the business if it succeeds.

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What is equity crowdfunding?           
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Eligibility and exclusions                   
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Benefits and scenarios                     
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Risks                                                
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       Things you can use to secure the finance
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       Is equity crowdfunding a good fit for you?
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What is equity crowdfunding?

 

Equity crowdfunding is a way for startups or entrepreneurs
to raise money from many different people, who each invest
a small amount in exchange for a share in the company's
ownership and potential future profits.

It's a collective effort where many individuals become
part-owners and supporters of a business they believe in and
want to back.

Eligibility and exclusions

 

Anyone can be eligible for equity crowdfunding as
long as they have a compelling business idea or project.

Some exclusions may include businesses with certain legal
or financial issues, those seeking large amounts of funding,
or companies unable to share ownership with investors.

Benefits and scenarios

 

Equity crowdfunding gives you access to a large
pool of potential investors, making it easier to
secure funding for your projects or business ideas.

By involving regular people in the funding process,
it creates a community of emotionally invested
investors, leading to a boost in customer loyalty
and support.

It might also create a media buzz which can raise
your business profile and attract new customers.

Risks

 

By promising a share of your business to many investors,
equity crowdfunding can lead to financial pressure if your
business doesn't perform as expected, as this would impact
your ability to grow or pay back investors.

As you will have many investors owning a portion of your 
business, you might have less control over important business
decisions.

If you’re unable to get enough money from investors, your
plan to raise funds might not work out.

Things you can use to
secure the finance

 

The most important thing to securing equity
crowdfunding is to have a clear and exciting
business idea or project to get people keen to invest. 

You can do this by creating a persuasive campaign
on a crowdfunding platform, explaining why people
should invest in your idea and what they will get in
return for their support.

You’ll also need to give up a portion of your business’
ownership as well.

Think equity finance could
be a good fit for you?

 

Speak to one of our finance specialists today
to find out how you can get started.

Find out more: 

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The information does not constitute financial advice or recommendation and should not be considered as such.

SimpliFi is not regulated by the Financial Conduct Authority (FCA), its authors are not financial advisors, and it is therefore not authorised to offer financial advice. 


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