As we enter a new tax year, many of us will be searching for ways to escape the meagre savings rates currently on offer. One option that’s grown in popularity over the last few years is equity crowdfunding through platforms like Crowdcube and Seedrs. Crowdfunding allows retail investors like me and you to buy shares in a range of small, but often fast-growing companies, for as little as £15.
Here are five start-ups that aim to do good and are currently crowdfunding, in order to expand – and ultimately do more good.
Investment summary: Raising £1.2 million for a 8.18 per cent equity stake.
Overview: MacRebur uses waste plastics, destined for landfill or incineration, to replace bitumen in a road mix. This helps to reduce carbon emissions, reduce waste plastic and also reduce the costs of asphalt manufacturing, making MacRebur one of the UK’s most promising cleantech businesses.
Investment summary: Raising £250,000 for a 6.17 per cent equity stake.
Overview: ClearWaste is on a mission to combat fly-tipping. It does this by offering a price comparison website for waste removal and also provides enforcement services to councils. ClearWaste is trying to build a virtuous cycle by making it easy to compare quotes, while also encouraging reporting, for those that refuse to dispose of their waste legally.
Investment summary: Raising £600,000 for a 2.75 per cent equity stake.
Overview: Fullgreen aims to make plant-based eating more accessible and offers a range of low-carb alternatives to rice and grains. And while there’s clearly a lot of companies jumping on the plant-based food bandwagon, Fullgreen stands out as it has patented technology and a focus on creating long-life products without the need for any preservatives.
Investment summary: Raising £75,000 for a 15.27 per cent equity stake.
Overview: Employee wellbeing is increasingly a hot topic, with a raft of start-ups trying to capture a slice of this fast growing pie. With 75 per cent of employees saying that their financial concerns effect them at work, Bippit works with employers to offer their staff access to advice and tools to help them “learn, plan and take action with their finances.”
Investment summary: Requesting a $4,000 loan for irrigation equipment.
Overview: Lendwithcare, run by the CARE International UK charity, launched in 2010. It enables consumers in the UK to lend as little as £15 to support a small business, which they can select. The loan is then repaid, with no interest. So while it won’t generate any returns, it will have a positive impact on a poor local community. Eduadro Vicentre is a farmer from Ecuador, seeking a loan to repair his irrigation equipment.
While running my previous business, a review website for financial services, I decided not to raise investment via crowdfunding. But as I think about raising growth capital for my new venture, a cyber security business called Predatech, would I consider launching a crowdfunding campaign? I think I would. For businesses looking to raise money, a successful crowdfunding campaign can also provide other benefits such as a source of new customers and publicity.
Many investors enjoy backing businesses that resonate with them, and if you’re tempted to invest in a crowdfunding campaign it could prove to be a financially rewarding experience. But it’s also important to remember that this type of investment is very high risk and some of the valuations sought, and often achieved, appear to be rather fanciful. And while the industry is good at highlighting success stories such as BrewDog and Monzo, the vast majority of crowdfunded businesses will fail to reach such lofty heights, so you should only invest what you can afford to loose.
Do remember that the value of an investment and the income generated from it can fall as well as rise and is not guaranteed. Therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Past performance is not a guide to future performance.