I heard a couple of interesting statistics the other day from a friend who has been researching the crowdfunding market. As the information is unverified I will not mention his name but he had clearly been doing a lot of homework:-
- He had managed to track down over 300 crowdfunding websites globally of which about half were in the UK. That suggests that there are a large number of new crowdfunding platforms out there which are neither authorised by www.afca.org.uk nor members of www.cfa.org.uk. As borrowers and investors become more aware of this marketplace, I am sure they will increasingly want to see that these two important boxes have been ticked before they entrust their lending proposition or their hard-earned cash to an unknown crowdfunding platform;
- Apparently everyone who manages to raise at least half the money they are looking for manages to get the minimum they need to close their funding round. However, there is a catch. I understand that a lot of people are blogging and tweeting their lending propositions but the FCA have come down on this practice suggesting that it amounts to “financial promotion”. I will leave it to the experts to decide whether the bloggers and tweeters are actively engaged in financial promotion or simply acting as “mere conduits”. However if the Government is endeavouring to increase the crowdfunding marking it seems to me that there is little wrong with signposting people towards properly authorised platforms which adhere to the principles of the Crowdfunding Association.
I have recently been introduced to such a new platform called Lending Crowd which will be duly authorised when it is launched. A brief flyer can be found by clicking here with contact details for anyone who would like to get in touch with them to discuss their requirements. As I am merely referring to a new crowdfunding platform and not to any specific project I trust I have stopped short of financial promotion.