equityEquity
Capital at risk
£35.0m
Valuation
5.7%
Equity share
EIS
Capital at risk
EIS
Amount
£
ownership
Minimum investment is £5,000
EIS Tax Relief
£
Ownership share

Crowd2fund is an investment platform for entrepreneurs by entrepreneurs. Uniquely, investors choose the entrepreneurs they back rather than investing the money into a pooled fund. This means investors can potentially generate much higher returns, up to 15% tax-free with the IFISA. Businesses benefit because they can reduce the cost of borrowing by inviting their own investors or offering tangible rewards. Crowd2Fund has recently been authorised for EIS, which means there are generous tax incentives for investors who invest in this funding round. Crowd2Fund is aiming to grow to a value of at least £353m by 2024.

Pioneering a new breed of credit.

ENTERPRISE INVESTMENT SCHEME TAX RELIEF

EIS is a tremendously generous tax scheme for investors where investors can claim 30% tax relief from their investment back from HMRC. Investors can also claim loss relief in the unlikely event the business fails and pay no capital gains tax on any future earnings from the sale of their shares.

For example, if you invested £20,000 in this round you would be potentially eligible to claim £6,000 in the form of tax relief and also claim £6,300 in loss relief. This means that you would only be exposed by £7,700. If you are an existing investor, we are also offering a £5,000 loyalty reward if you invest £20,000 in this round.

Being granted EIS is significant because up to £12m can be invested via this scheme. Next year we plan to continue scaling the company by securing a Series A investment round of £10m also via EIS. The business is ready to scale because our historical data and proven business model with the ability to scale via increased direct business sales.

WE ARE BUILT BY ENTREPRENEURS, FOR ENTREPRENEURS

Uniquely with Crowd2Fund, investors can select their own businesses and entrepreneurs to invest in, define the amount they wish to invest, and conduct their own due diligence thanks to the transparency of the platform. Having world class technology and compliance at our core allows us to achieve this. ‘The Exchange’ also allows investors to access their cash, if needed, by trading with other investors. The Exchange also helps investors diversify their portfolios to help manage potential losses– all from their desktop computer or mobile app.

WE HAVE REGULATION AND COMPLIANCE ARE AT OUR CORE

We work with the FCA and HMRC to maintain robust processes, which build trust and offer a better service for our clients. This, along with a significantly different client proposition to other platforms, has allowed us to achieve our unprecedented growth. We are also an authorised Innovative Finance ISA manager, meaning with Crowd2Fund, investor returns are tax-free.

We work tirelessly to find the best opportunities for our investors to invest in, present opportunities clearly and maximise investors returns and satisfaction.

Businesses borrow through us, rather than another platform or bank, because they also gain a community of like-minded investors, who act as brand advocates, driving sales across local and global markets; we build communities, not just portfolios. Companies can offer a tangible product as a reward to reduce the cost of borrowing and increase customer loyalty by offering product discounts if they invest.

By building direct relationships between businesses and investors, we enrich the investing and fundraising experience. Investors can choose their own investments, and invest directly into growing, carefully selected entrepreneurs.

WE ARE POWERED BY REVOLUTIONARY TECHNOLOGY

We continued to innovate in 2018 with the implementation of a new user interface, the launch of our new iOS app, the optimisation of our operational processes, and the development of an increasingly effective recovery system. We are developing an optional contingency fund next year to help protect participating investors, by allowing losses to be shared between the community. We have also made great progress in becoming Blockchain enabled, as we migrated to a new payment provider earlier this year offering more benefits to investor. With our dedicated and talented teams, we are certain that 2019 will see us exceed our goals.

It is our priority to stay on the cutting-edge of FinTech. This work comes with endless opportunities, such as more innovative improvements to the user experience, new recoveries features, a portal for business referrers, equity trading on the Exchange, and the development of an Android app. Expansion of our international businesses via the new FinTech trade bridge to Australia and Canada will continue, which will create additional future investment opportunities.[1]

WE DELIVER BETTER RETURNS THAN OUR COMPETITORS

Our returns are highly competitive: so far we have generated about £3m in interest for our investors who are lending at 10.46% APR, resulting in an average platform return of about 4.2% APR tax-free, after fees and bad debt over the last 12 months.[2] These higher returns are achievable due to the efficiencies offered by peer-to-business lending, a superior credit assessment approach, as well as the added transparency of Crowd2Fund and scrutiny of our community.

WE HAVE CREATED CONSISTENT SUCCESS

We are overwhelmingly proud of what has been achieved so far. The Crowd2Fund community has lent £35m to 450 businesses and entrepreneurs, supporting their growth. We have created countless jobs and in total, these businesses have generated more than £1.2bn for the UK economy. As a community, we also won the Money Net award for Best Innovative Finance ISA provider for 2018. Our annual revenue has grown from just £26k in 2016 to £832k in 2018 – a 32x increase.[3]

GFIN AND THE FINTECH BRIDGE

We are one of ten companies selected by the Department for International Trade to be on a highly prestigious international FinTech programme, which is to facilitate cross border trade in the FinTech sector between Australia and the United Kingdom. At this time, we are actively setting up in Australia.

We are also a keen supporter of the GFIN. A new global trade hub specifically for FinTech focused on facilitating cross jurisdiction FinTech transactions. We plan to expand internationally across this network and are keenly watching for the alignment of regulations which will make it much easier to penetrate international markets.

PROVEN BUSINESS MODEL

The last year has been critical in the company development because we have been waiting for EIS approval, consolidating technology such as changing payment provider and proving our direct sales channel cost of acquisition for £100k loan.

This has all been critical to put in place prior to raising an institutional round to scale the company. Most importantly proving the CPA for direct leads means we’re not beholden to the limited number of deals brokers can send us and can tap into the £2bn of transactions in the wider UK marketplace.

We have proven over the May to July period that our cost per acquisition for a business loan worth £100,000 costs £3,090.39 in marketing spend. This generates a gross profit margin of 48.5%, however with repeat customers this reduces to £1,846.11, which accounts for 23.5% of loans.

Our CPA/£100k this year through all channels is £2,442.53 which means the cost of sale to achieve £34m within one year is approximately £830k. On the other side of the marketplace, the cost of acquisition for a new investor is £347.34, where the investor invests £9,160 on average in their first year, then £6,753 per year. Therefore to ensure the liquidity is available to complete the above deals, a £920k investment is needed for new investor acquisition. Our detailed financial model is available for review.

We want to push this further with our first Series A investment next year of £10m via our EIS authorisation, allowing us to grow the company to a value of £353m, giving you a 10x return on your investment assuming you top up to avoid dilution.

OUR VISION

Longer term we are looking to develop the worlds first decentralised bank. This means that we will be offering full banking services to businesses and investors in the form of bank accounts and debit cards. Our banking system will be focused for small businesses and this is where users will receive their interest. Interest earned by users selecting and lending to businesses directly or alternatively an automated investing AI system. We aim for the bank to be mainly automated and fully transparent to the extent where it’s users even have the option to own the bank. Imagine the capability of a new challenger bank but with a peer to peer capability combined. The bank will deliver a superior service and returns for investors but also liquidity needed to power the new entrepreneur led economy of the future.

JOIN US IN DEVELOPING THE FINANCIAL SYSTEM OF THE FUTURE

We would be delighted for you to join Crowd2Fund in this private investment round. You can also download the confidential Crowd2Fund 2019 business plan containing in-depth insights about this exclusive opportunity. Please feel free to ask any questions below or request any further information.


[1] https://treasury.gov.au/fintech/uk-australia-fintech-bridge
[2] These figures are accurate as of the 1st of November 2018. https://www.crowd2fund.com/fund-statistics
[3] These figures are based on our audited 2018 accounts, available for review
[4] https://www.gov.uk/guidance/venture-capital-schemes-tax-relief-for-investors

X

Equity - product type
Maximum
£ 2m
Raised
£ 668k
Investors
70
Estimated close date
Coming Soon

Where will the funds go?

Platform development
£348,000
New investors
£910,800
Business advertising
£892,800
Team salaries
£510,000
Legal, compliance and operations
£324,000
Revenue earned (total costs £1.2m)
£1,785,600

Key people

Chris Hancock
CEO
Nicky Pace
Managing Director
John Daniel
Strategic Finance Director
Rob Older
Content Director
Liviu Dragulin
Director of Tech Ops
Mike Boehm
Tech Development
Hannah Colgan
Senior Risk Analyst
Russell Tolley
Commercial Director
Hamish Chreseson
Risk Analyst
Caroline Gill
Marketing Manager
Jen Garcia
International Project Manager
Cosmina Palade
Front End Engineer
Katherine Atkin
Advisor
Nigel Webber
Advisor
Michael Fischer
Advisor
Mahmood Yusuf
Advisor
Red cup

Investor rewards

Join our club

If you invest £5,000 - £9,999
Get yourself a limited edition Smart-Coin and gain access to Investor Club benefits and receive up to £2,999 EIS tax-relief

Zero fees for life

If you invest £10,000 - £19,999
Zero fees on Crowd2Fund for life and up to £5,999 EIS tax-relief

Myoshka Artwork and more

If you invest £20,000 - £49,999
Receive a limited edition Myoshka Crowd2Fund artwork, with more exclusive perks and events to follow and up to £14,999 EIS tax relief

Bonus shares

If you invest £50,000 - £99,999
Receive an extra 25% in bonus share, plus the above and up to £29,999 EIS tax-relief

Have your say

If you invest £100,000+
Become an informal advisor and input into the growth of the firm , plus above and a potential minimum of £30,000 EIS tax-relief

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Business brand

London, UK

"Pioneering a new breed of credit."

Business stage
Expansion
Incorporated
6 years, 7 months
Investment strategy
Target valuation
£353,156,737
Target share value
10.1x
 

The target valuation is not a target return on your investment but simply indicates the desired and forecast growth of the platform. If the target valuation is achieved then your shares would need to be sold at this valuation for you to realise the investment.

Investments like these involve risks including loss of capital.
Please see our risk section before making an investment decision.

Risk warning

Investments like these involve risks including loss of capital. Please see our risk section before making an investment decision