World's first equity and debt crowdfunding platform launches
Today sees the official launch of the world's first equity and debt crowdfunding platform, Funding Tree. Funding Tree, which is FCA-regulated, is currently the only crowdfunding platform that enables companies to raise capital through either equity or loans.
With its dual crowdfunding model, Funding Tree is focused on building long-term relationships with companies, not just facilitating one-off transactions. The goal of Funding Tree is to work alongside UK SMEs as a growth partner to help them secure the type of finance they need - when they need it.
So a start-up may begin by raising seed capital through Funding Tree in return for equity and then, a few years later, take out a loan to fund expansion via the same platform. The same company, now established, might then use Funding Tree to find new equity investors to buy out its competitors.
The maximum individual investors can lend or invest via Funding Tree is £1m, the minimum investment/loan size just £50, meaning the platform is open to all investors, not just the higher net worth. All deals must achieve 90% of their funding target in order to proceed. Joint equity and debt deals are also possible.
Deals currently live on Funding Tree include:
Premier Digital Media (seeking £40k loan) - Berkshire-based company that produces innovative accessories to wirelessly extend the usage time of smartphones and tablets. More info…
Qwaqoo (seeking £100k for 15% equity) - The must-have product for businesses needing to fill cancelled appointments or wanting instant footfall. More info…
Dolce Gelato (seeking £100k for 30% equity) - A new restaurant concept in the dessert market that offers a unique, modern-day Gelateria dining experience. More info…
Not only is Funding Tree one of just a few FCA-regulated crowdfunding platforms, its strong capital base means it is also authorised to hold client funds itself.
This enables the companies on Funding Tree to access monies raised far quicker than they would be able to through other platforms — always within seven days of the fund target being reached.
Dillen Iyavoo, CEO and Co-founder, Funding Tree, commented:
"The finance requirements of companies are always changing and, during a typical growth cycle, will often switch from equity to debt and back again. It’s these changing demands that we have set out to accommodate with Funding Tree, which is able to offer UK SMEs the type of finance they need when they need it — and get the money to them far quicker than other platforms thanks to our strong capital position. Our goal is to make crowdfunding relationship-based rather than transactional, something the banks, despite their many faults, have always understood. With crowdfunding increasingly in the spotlight, we also wanted to stay one step ahead and get FCA approval at outset, which gives investors in our companies not just the potential for great returns but extra peace of mind.”
Funding Tree loans range from £10,000 to £1,000,000 with repayment periods between six and 60 months. Unsecured loans are available up to £100,000 subject to status, and secured loans from £100,000 to £1,000,000. The maximum amount businesses can raise via equity on Funding Tree is £1m, the minimum £10,000.