Upgrade to ChromeUpgrade to FirefoxUpgrade to Internet ExplorerUpgrade to Safari

11th February 2016

Statistics say that most new businesses will fail in their first five years due to insufficient funding. For many, it is a risk you have to take when wanting to start up your company. With the economic downturn causing banks to tighten their purse strings, many small businesses are now forced to find alternative funding methods to get their dream start-up off the ground. Enter Crowdfunding.

Why crowdfund?

Crowdfunding is a way to raise money, awareness and support for a project from the people around you. The idea of Crowdfunding was launched in 2011 by MP Vince Cable, who wanted to start a fresh new funding channel for small businesses in the UK that put particular emphasis on the power of the crowd through pledges and contributions – and so was born Crowdfunding.

Entrepreneurs and new start-ups with great ideas for a business can raise the money they need in return for rewards. The public can back their idea with pledges of money, and project owners can ‘thank’ their backers by offering them a small stake in their business idea.

Does it really work?

There are several benefits when it comes to Crowdfunding for your business. Aside from financial backing, one of the most beneficial effects is validation for your business and yourself; if people are pledging money to an idea, it proves that people believe in it, which will, in turn, create confidence in your business.

Crowdfunding is also for life and not just for fundraising. The people who support you and your great idea become a part of your journey and will become the ambassadors for your project in the future; an example of this is the success story of The Camden Town Brewery.

Success story

Industry giant AB InBev bought the microbrewery last year for around £85million. Just five months earlier, the brewery – which only started in 2010 – used Crowdfunding to raise £2.75million before needing to expand.

Investors are thought to have been offered up to £1.25 for each share – a return of almost 70 per cent on top of their original investment within a year. This is a fantastic example of how Crowdfunding can help advance a business.

Of course, there are some downsides to Crowdfunding. Business ideas can be stolen or copyrighted if not correctly protected and if a company is unable to hit its funding target the funds raised by investors or contributors are often returned.

One last thought

If you are a small business looking for funding, Crowdfunding could be your alternative finance option.  The funding could ultimately help develop your business and create loyal customers along the way, which is always a bonus for a new startup.

If you are a freelancer, sole trader, or small business owner, get in touch and see how we can help. Our clients have access to a dedicated bookkeeper, a qualified accountant, and an award-winning accounting dashboard, all included in our fully tailored accountancy service.

We hope you find this article informative and helpful. To get notified when we publish a new guide or article, please follow us on LinkedInTwitter or Facebook. Our ethos is quality over quantity, so we promise not to crowd your social media feeds with less than-valuable content.


Latest Posts

If you run a business, you have expenses, and what comes with them are heaps of receipts you must keep….

Read Full Article

Customer Testimonials

“The great thing about myaccountant is there is no “portal”, I can just deal with a human being at the other end of the phone, or I can just e-mail them. They are ...

View full testimonial


“I have been using MyAccountant for seven years now and can highly recommend their services.  I use them for both my company accounts and personal finances and find their knowledge, professionalism and attention ...

View full testimonial


“The best thing about MyAccountant is that I can ask them to do a little or as much of the work as I want. Over time I learned how to do most ...

View full testimonial


I love having a nominated accountant as my one point of contact, so I do not have to explain everything to a new person every time. My accountant being ACCA-qualified gives me confidence ...

View full testimonial


Speak to our team on
0800 917 9100

Or click here to contact us

Join My Accountant Today

Fill out our registration form