New statistics have revealed more than £1,700 per hour is being raised via crowdfunding in the UK.
The data, compiled by The Crowdfunding Centre, shows that since the beginning of 2014 more than 2,600 equity and rewards projects were launched – more than 45 per day, attracting pledges of more than £5.7m.
Successful projects raised an average of a little over £9,500 each – a combined total of £2.4m.
Now, as the CBI calls on the Chancellor George Osborne to support growing SMEs in this year’s budget, there are renewed calls for the government to nurture and expand the alternative finance market which has injected almost £2.5m into the economy in just two months.
Founder of the The Crowdfunding Centre, Barry James, said his team had curated a mountain of hard data on practically all new rewards and equity crowdfunds launched this year.
“Now we have the data we know that crowdfunding is a vital force capable of creating significant numbers of new livelihoods and new jobs while helping regenerate the UK economy,” said Barry James.
“The CBI is right to say that more can be done to help startups and SMEs access new forms of finance and we too call on the government to work with us to nurture and expand the UK’s vibrant alternative finance market.”
On Monday, the CBI’s director general John Cridland* said: “We need to nurture the UK’s vibrant alternative finance market and encourage even more competition in banking so that businesses can get growth capital.”
His views are shared by many in the sector.
Karen Darby, CEO of CrowdMission, said: “Talk is cheap. I’d like to see this government proactively supporting the UK crowdfunding sector with a programme to increase education and awareness, an even playing field for the tax treatment of crowdfunded investments and a supportive and effective legislator.
“A bit of hard cash to co-invest in young, high growth businesses wouldn’t go amiss either.”
Liz Wald, Head of International at Indiegogo, said: “As the world’s funding engine, Indiegogo wants to make sure that we’re giving people everywhere the tools they need to raise money without anything standing in the way.
“We are not only opening doors to new creative, entrepreneurial and social good pursuits, we are also helping level the playing field in terms of who gets funding.
“In the UK, more than 40% of the campaigns that reach their goal are run by women – a much higher rate than is found in traditional venture capital or angel investing. Crowdfunding democratises access to capital and that’s something we can all get behind.”
The team at The Crowdfunding Centre is working with researchers around the world to analyse the data.
“What is clear is that this will give us many new and valuable insights into what this exciting, dynamic market can deliver,” said Barry James.
“But it’s crucial that the government recognises the value of the alternative finance market and does all it can to support it – for the good of jobs and the economy, not to mention cementing and extending a world leadership position in this vital new area.”
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