Crowdcube is an online crowd investing site that lets investors choose which projects they want to back. It’s a great way for entrepreneurs to gain funding from investors without needing to deal with banks and financial institutions. Crowdcube is based in the UK, so it may be geared more toward the UK/European crowd. But if you’re based in the United States, it’s still worth a try if you want an international funding source.
In the simplest of terms, owners of private companies pitch the idea of their company on the crowd cube website and investors then decide if it is worth the risk to invest in that company.
Crowdcube advertises a number of startups on its website called ‘pitches’. Typically it has about 15-20 pitches at any given time. As a startup, you have to create your pitch. You will create your own dedicated page which gives you key information such as an overview of your business, key financial data, the market for the product/service and the reasons why you need funds and what the funds will be used for.
Every pitch also has a video where you give a quick snapshot of the business and why you are seeking funding. The videos are great they are an opportunity for you to demonstrate the passion about your business and clearly the gap or problem it solves.
Crowd Cube has two basic models:
- Joint-venture profit share model (Equity based model) – investors using this model, can basically own a share in a startup business.
- Fixed income model – Also called Bonds. This is when an investor makes a loan to a company and in return, they receive a fixed amount of interest every year.
What Types of business can get funding on Crowdcube
Crowdcube deals in private business aka businesses you can not buy shares on the open market (stock exchange).
The businesses are typically in three different stages of a business life cycle:
- start up
- early stage
- growth businesses