The crowdfunding market continues to gather pace, and the recent exit for crowd investors with the sale of E-Car Club giving investors a three times return has done nothing to dampen enthusiasm for this fast moving funding solution.
Although often met with skepticism and criticism in some investor circles about it’s ability to provide sufficient returns to investors through an exit, the E-Car Club exit is a fantastic example of the old and new funding worlds colliding, to facilitate an exit and healthy return to investors. In summary, the business initially raised funds through a technology board which secured seed capital for it through Crowdcube, followed by angel investors, before ultimately finding an institutional investor.
Often there is a deep misunderstanding about the types of businesses that raise funds via the crowd. Far from being unsophisticated businesses for unsophisticated investors, they are becoming increasingly established, led by credible and experienced business teams.
The market is still developing, and here at De Novo Advisory we and our clients are increasingly getting involved in this area. As with all developing areas, there is always an element of caution, but our experience to date and view of the market going forwards, is that it’s an area not to be dismissed lightly.