FAQ


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General Questions

To set up an account, click 'register'. The link is found in the top right hand corner.

 

Enter your email address, username and password. Usernames have to be between 4 and 12 alphanumeric characters with no hyphens, dots or underscores.

 

You will subsequently be asked to complete a short questionnaire that assesses whether you fully understand the high risk nature of investing in start-ups and early stage businesses, or you can self- certify as a High Net Worth Individual or Sophisticated Investor.

 

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Each Entrepreneur creates an online Pitch explaining their business and what they aim to achieve with the investment. The Pitch will include 2 key numbers: 

 

1. The Target Amount: the total amount of money they wish to raise and invest in the business

2. The equity offered and the percentage share of the business they are offering in return for raising the Target Amount

 

Entrepreneurs then promote their Pitch to potential Investors. Investors then invest money in the Pitch and over a period of time (60 days is the maximum time available to raise the investment required) investments accumulate until the Target Amount is reached.

 

The minimum investment is just £10 but investors can of course invest larger sums.

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There are a number of reasons you may want to invest in a Pitch:
 
  • To make a return on your investment
  • To get a unique Reward for your investment 
  • To help a friend launch their business
  • To support a business or industry you believe in
  • To help small British businesses
  • For the fun of it
 
Investors should implement a diversification strategy when building an investment portfolio. Diversification involves spreading your money across multiple investments and will give you, as an investor, greater peace of mind that your investments will sustain in adverse market conditions and cushion losses. However, it will not lessen all types of risk.
 
By registering as an Investor on Crowdcube you agree to building a portfolio with a spread of investments worth at least £1000 over a 12 month period.

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Each Pitch has 60 days to raise the Target Amount. In some circumstances the pitch may be extended for a further period of time and this is at our discretion.

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Once the Target Amount is reached, we will introduce the entrepreneur to Ashfords LLP. The Entrepreneur will need to engage with Ashfords LLP throughout the completion process. Ashfords LLP will familiarise the entrepreneur with our standard Crowdcube Articles of Association and make any amendments that are necessary before they fully adopt them.

 

Once the paperwork and legal documentation is completed, the money will be transferred to the Entrepreneur's bank account and Shareholder Certificates can be issued. It is the duty of the Pitch owner to organise the delivery of any promised rewards in a timely manner. This process takes about six weeks.

 

Investors will be emailed a copy of the adopted Articles of Association and given seven working days to review them. During this period an Investor can ask any questions that they may have and edit or withdraw their investment if they wish.

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Depending on your investment readiness, getting your Pitch live on the site can take from a couple of days to a few weeks. The average time for a Pitch to reach its Target Amount is around 45 days, although some have secured their funding in just a few days. Upon successfully completing your Pitch, the timeframe for completing the legal documentation and transferring the funds over to you is around six weeks.

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If the Target Amount is not raised within the time period then the Pitch will expire and no money will be taken from Investors' bank accounts. In some circumstances the Pitch may be extended for a further period of time and this is at our discretion.

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Yes, once a Pitch has reached its Target Amount it is possible to set a secondary target and continue to receive more investment until either the secondary target is met or the Pitch completes its duration. We call this "Overfunding" and it is proving really popular, enabling Entrepreneurs to capitalise on the demand created to raise further funds.

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The minimum Target Amount is £10,000. There is no maximum Target Amount, however our optimum range is £100,000 - £150,000. If you are looking to raise over £150,000 you will need to have a very compelling proposition to convince us to list your business on Crowdcube.

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Crowdcube is authorised and regulated by the Financial Conduct Authority (No. 572026). You can see full details of our authorisation and permissions on the FCA Register.

 

The Financial Conduct Authority (FCA) is an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000. They are an independent organisation responsible for regulating financial services in the UK and set the standards that they must meet and can take action against firms if they fail to meet the required standards.

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Investing

As a Crowdcube investor you may benefit from the Financial Ombudsman Service (FOS), which is the official independent expert in settling complaints between consumers and businesses providing financial services. It looks at consumer complaints about a wide range of financial matters – from insurance and mortgages to savings and credit. It answers more than a million enquiries a year and deals with more than 250,000 disputes.

FOC is completely independent and impartial, supporting neither the business nor the consumer.

Please click here to find out more information about the Financial Ombudsman Service (FOS) and whether you may be eligible to benefit from its service.

You may also be covered by the Financial Services Compensation Scheme (FSCS). It is the UK's compensation fund and last resort for customers of authorised financial services firms. The FSCS may pay compensation if Crowdcube is unable, or likely to be unable, to pay claims against it – this is usually because the company has stopped trading or has been declared in default. The scheme applies to Crowdcube's activities only (post FCA authorisation, 01 Feb 2012) and would not cover investors in the event the investee firms were to fail.

The FSCS is independent of the government and the financial industry, and was set up under the Financial Services and Markets Act 2000, becoming operational on 1 December 2001. It does not charge individual consumers for using its service.

Please click here to find out more information about the Financial Services Compensation Scheme (FSCS) and whether you may be eligible to benefit from this scheme.

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You will need to register as a Member first before investing. Once you have found a Pitch that you would like to invest in simply enter the amount of money you wish to invest in the box that says 'Enter Amount' and click on the 'Invest now' button.

 

How you pay for the investment will depend on the option(s) selected by the pitch owner. They can choose to accept payments via Stripe using a debit or credit card, and/or GoCardless which uses a single direct debit transaction from UK current accounts. 

 

You just need to complete the online form and the money will be taken upon the Pitch hitting its Target Amount and the completion of legal paperwork and documentation. If the Pitch doesn't reach its Target Amount then no money is taken. 

 

Investors will be emailed a copy of the adopted Articles of Association and given seven working days to review them. During this period an Investor can ask any questions that they may have and edit or withdraw their investment if they wish.

 

The minimum investment is only £10.

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When you invest via a one-off Direct Debit payment using GoCardless, the money will only be taken from your account when the Pitch reaches its Target Amount and all of the legal documentation is completed. 

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No, your money will not be withdrawn from your bank account and no charges made.

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If you successfully invest in a business via Crowdcube you will become a direct shareholder in that company. The amount that you invest and the equity that the company is issuing in exchange for investment will affect your percentage ownership of the business.

 

Once the legal documentation is completed you will become a legal shareholder in that business, be sent a Share Certificate and appear on the company's share register at Companies House. Such investments are long-term and used to help the company succeed and allow them to experience more growth than they would if they were funded with a traditional loan or grant.

 

The majority of investments are classed as B Shares, which means that you will not have a vote in any future business decisions. Companies pitching on Crowdcube can offer A Shares with voting rights so please check the pitch carefully.

  

Investors will be emailed a copy of the adopted Articles of Association and given seven working days to review them. During this period an investor can ask any questions that they may have and edit or withdraw their investment if they wish.

 

Investing in start-up and early stage businesses is high risk. The majority of start-ups fail or do not deliver shareholders a return on their investment. Liquidity, or the ability to cash in your investment is limited as it often relies on the company being sold. Dividend payments are rare and the likelihood of an Investor's percentage shareholding being diluted by future fundraising is high.

 

Investors should implement a diversification strategy when building an investment portfolio. Diversification involves spreading your money across multiple investments and will give you, as an investor, greater peace of mind that your investments will sustain in adverse market conditions and cushion losses. However, it will not lessen all types of risk.

 

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Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution and it should be done only as part of a diversified portfolio. Crowdcube is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Crowdcube once you are registered as sufficiently sophisticated. Please click here to read the full Risk Warning.

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No. We display a list of Pitches that you have invested in on your public profile but we do not disclose how much money you have invested in each Pitch.

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Whilst Crowdcube does vet businesses before they are listed on Crowdcube, Investors should call upon their own judgement, knowledge and research along with that of the Crowd (other Investors within Crowdcube) to decide whether the Entrepreneur is worthy of their investment.

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Absolutely. We provide a discussion Forum for each Pitch where you can ask questions which the Entrepreneur will reply to. You can also use the Forums to discuss the Pitch with other Crowdcube Members and help each other to form opinions on the Pitch's prospects.

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Pitches can opt to utilise a new payment method recently implemented by Crowdcube called Stripe. This enables people who are based outside of the UK to invest in Pitches on Crowdcube. Please note that Pitches are not automatically assigned this payment method, Entrepreneurs must opt to utilise this payment processor.

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Yes, when a Pitch reaches its Target Amount all Investors will receive an email to that effect.

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Yes, you can cancel your investment in a Pitch at any time before the deal is completed. Please go to your GoCardless account to cancel a pledged investment, this will subsequently update our platform. 

 

Investors in a Pitch that successfully reaches its Target Amount will be emailed a copy of the adopted Articles of Association and given seven working days to review them. During this period an Investor can ask any questions that they may have and edit or withdraw their investment if they wish.

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We are not authorised to hold client money and therefore we don't accept cheques or bank transfers.

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Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Crowdcube is targeted exclusively at Investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Crowdcube once you are registered as sufficiently sophisticated.

 

Investors should implement a diversification strategy when building an investment portfolio. Diversification involves spreading your money across multiple investments and will give you, as an Investor, greater peace of mind that your investments will sustain in adverse market conditions and cushion losses. However, it will not lessen all types of risk.

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In the unlikely event that you are not completely happy with the service that we have provided you can register a complaint online or by phone. To submit a complaint, please visit our Complaints page.

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The Alternative Offer tool allows you to tell Pitch owners that you want to make an investment but that you think the valuation isn't quite right. By entering what you believe the business is worth and how much you’re willing to invest (min £5,000 to make an Alternative Offer), we’ll recalculate how much equity needs to be offered to raise the funds needed and what your share would be.

 

This Alternative Offer will be put forward to the Entrepreneur and they can decide whether it’s acceptable. If the Alternative Offer, which is valid for three days, is accepted it will apply to all previous and future Investors.

 

Please note that the Target Amount can’t be changed.

 

Here's an extreme example...

 
Original structure
Target Amount = £100,000
Original equity offered = 10%
Original business valuation = £1,000,000
 
Proposed deal
Target Amount = £100,000
Your valuation = £500,000
New equity required = 20%
 
Your investment = £10,000
Your total share would be = 2%

 

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Rewards

Entrepreneurs take full responsibility for ensuring all Investors receive their Reward.

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A Reward is a gift of goods or service, usually related to your business, that you provide to an Investor as an incentive to invest in your Pitch.

 

For instance, you could give away one of your products or a discount on future purchases of your products or services. 

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Once you have applied for and been accepted as an Entrepreneur you will be able to create your own Pitch within the 'Pitch' section of 'My Account'.

 

There is a sub-menu within the 'Edit My Pitch' section where you can click the green button to 'ADD NEW REWARD'. From here you can create, edit and delete Rewards.

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Once the Target Amount has been met and the investment has been made in to the Entrepreneurs' company, the Entrepreneur will be responsible for ensuring that every Investor receives the appropriate reward.

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The Entrepreneur is responsible for contacting the Investors if any further information is required.

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Entrepreneurs and Pitches

Yes, on every published Pitch there is a widget that you can place on your site or blog which shows the Pitch details in real time. Just click the 'embed on site' link within the Pitch page.

 

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To be approved to list your business on Crowdcube you will need to provide a business plan, financial forecasts for the next three years and a video pitch that clearly explains the investment proposition.

Click here for advice on getting investment ready.

Click here to apply to start a Pitch.

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No, you do not need to be a PLC however you do need to have a regular UK Limited company that is registered with Companies House.

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Anyone who is a UK resident; over 18 years old and has, or can create a regular UK Limited company that is registered with Companies House can become an Entrepreneur on Crowdcube.

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Entrepreneurs must set an investment Target Amount which cannot be changed once their Pitch is published.

 

The deadline is automatically set at 60 days from the date that the Pitch is published. You can specify a shorter time period if you wish.

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Once the Target Amount is reached, we will introduce you to Ashfords LLP. The Entrepreneur will need to engage with the solicitors throughout the completion process. Ashfords LLP will familiarise you with our standard Crowdcube Articles of Association and make any amendments that are necessary before you fully adopt them.

 

Once the paperwork and legal documentation is completed the money will be transferred to the Entrepreneur's bank account and Shareholder Certificates can be issued. It is the duty of the Pitch owner to organise the delivery of any promised rewards in a timely manner. This process takes about six weeks.

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It is currently free to register as an Entrepreneur and add a Pitch to Crowdcube. For a limited period we are waiving our £250 listing fee.

 

When an Entrepreneur successfully raises their Target Amount Crowdcube will deduct a success fee of 5% (+ VAT) of the Target Amount.

 

For the purposes of execution, a fee of £1,750 (+ VAT) is charged.

 

Of this, £1,250 (+ VAT) is paid to the solicitors engaged to see to the adoption of our standard form Articles of Association, the waiver of existing pre-emption rights and the issue of new shares.

 

A fee of £500 (+ VAT) is charged by Crowdcube Ventures Limited for administering the process, preparing and issuing Share Certificates and dealing with the inevitable miscellaneous queries.

 

From 02 July 2013, the Entrepreneur of all new Pitches that come on to the site will be charged the 0.5% payment processing fee incurred by GoCardless.

 

This model of charging means we only charge Entrepreneurs if they are successful in raising their funding through Crowdcube.

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There is no maximum amount that can be invested in a Pitch.

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No, each Entrepreneur may only have one active Pitch at any time.

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Pitches can be edited and updated at any time, however all amendments do need to be passed through the Crowdcube Team to ensure they are in line with the proposition.

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Yes, Pitches can raise more than the Target Amount. Our "Overfunding" feature enables a higher Target Amount to be set to enable the Entrepreneur to capitalise on the demand. The equity offering will remain at the same rate.

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Please contact the Crowdcube Team if you wish to change the Target Amount of your Pitch.

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Once the Pitch is live the Entrepreneur may only increase the amount of equity offered, they cannot ever decrease it.

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Yes, if you wish to cancel your Pitch for whatever reason please contact the Crowdcube Team.

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Yes, absolutely.

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Yes, please notify the Crowdcube Team and after we have seen the relevant paperwork we can add it to your total.

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If you log in to Crowdcube, click 'My account', click 'Pitch' and select the green button 'POST NEW UPDATE'.

 

This is a useful tool for letting all people interested in your Pitch know about any recent business developments and that you are active on the Crowdcube site. Your current Investors and Pitch Followers will automatically be notified of your update by email.

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Yes you can see them here.

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Any claims made in your pitch need to be fully referenced using an independent source that can be checked third-party. Also, your pitch, including the video, needs to be free from superlatives.

So if you say that you have an advisory board that includes Bill Gates and David Cameron, you will need to provide links to prove this. Likewise, if you say that your market has sales of £5 billion per annum, you will need to provide evidence to substantiate this.

With regards to superlatives, you cannot say your idea is ‘absolutely brilliant and leads the market’ as ‘absolutely brilliant’ is a superlative. You need to be measured in your language.

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About Crowdcube

You can see us and follow us at:

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We sure do. It's at www.crowdcube.com/blog/

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Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Crowdcube is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Crowdcube once you are registered as sufficiently sophisticated.

Please click here to read the full Risk Warning.

This page has been approved as a financial promotion by Crowdcube Ventures Limited, which is authorised and regulated by the Financial Conduct Authority. Investments can only be made on the basis of information provided in the pitches by the companies concerned. Crowdcube takes no responsibility for this information or for any recommendations or opinions made by the companies.