FAQ


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General Questions

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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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 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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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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Crowdcube Capital Limited is an appointed representative of Crowdcube Ventures Limited which 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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The amount invested will be decided by the Manager on a case by case basis and may be a greater or lesser sum than the 33%.

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The Manager has its own processes for due diligence (DD) and will carry out additional specific DD, prior to investment into a company as necessary. Individual circumstances vary but typically four areas are considered; technical, legal, financial and IP.

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Yes – the investor is always the beneficial owner of the shares. Rewards (if any) will be passed to the investor.

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It is always difficult to predict the exact timing of investments but the intention will be to build individual portfolios of up to 10 companies per investor within the first two years of an investor’s initial commitment.

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Rewards

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

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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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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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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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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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It is the entrepreneur's decision whether to list as a PLC.  

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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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An initial listing fee of £250 applies to cover initial company checks and due diligence.

 

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

 

For the purposes of execution, a fee of £2,250 (+ 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 £1000 (+ VAT) is charged by Crowdcube Capital 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 provided you have the funds to invest.  Any indication of pitch manipulation may result in your pitch being suspended, modified or cancelled.

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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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 Just call us – we’re interested in talking to you and learning about your company. Mini bonds are an exciting opportunity for growing companies who have been trading for at least five years and are generating substantial, regular revenues. If that sounds like you, our number is 01392 241 319.

 

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If we think, after speaking on the phone, that you could be a suitable candidate for a mini-bond, we’ll request comprehensive financial and business information about your company. This includes full statutory accounts for the last 3-5 years, your latest management accounts, a plan outlining your intended use of funds raised, and potentially further documents related your business and industry.

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We take a thorough look at your financial position, including your trading history and projections, the industry you operate in and your plans for the future to determine whether we think you would be suitable for a mini-bond.

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At the moment, due to financial regulation mini-bonds on Crowdcube are only available to UK registered companies.

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At the moment, due to financial regulation mini-bonds on Crowdcube are only available to UK registered companies.

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Crowdcube cannot provide tax advice to companies applying to us. Mini-bonds are an interesting and attractive form of financing so we strongly encourage you to talk to your accountant to see whether tax advantages may be available too.

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Companies who are unsure about their ability to make repayments probably aren’t the right type of organisation for a mini-bond. Your business needs to be generating strong, consistent revenues to consider issuing a mini-bond.

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While payments are managed through the Crowdcube platform, Crowdcube are not responsible for making interest payments. That is the sole responsibility of companies issuing mini-bonds.

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Quite possibly. Depending on the nature of your business, you may be able to offer rewards as part of the bond offered to investors. This will be determined during the structuring process if your application is successful.

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If your existing lawyers have experience running a mini-bond then we would almost certainly be happy to work with them. However, we have been able to negotiate attractive rates with lawyers who have extensive experience issuing mini-bonds, which could well have an impact on the cost of issuing a bond. We’ll talk to you about this during your application.

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Whilst we’re happy to provide advice and introduce you to people who can help, we don't provide hands on marketing support.

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Getting a loan from a bank continues to be particularly tough for businesses in the current economic environment, even if you are an exceptional company doing great things. It’s no secret that growing businesses need capital to support their growth, so why not cut the middleman and borrow from people who already love your business? Mini-bonds allow you to offer an extremely attractive interest rate to investors while still proving cheaper than a bank loan, and also work as a fantastic opportunity to increase your customer retention and market your brand.

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Effective marketing looks different for every company issuing a mini-bond. If you are successful in your application to Crowdcube, we can help you think through the best way to market your mini-bond.

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UK residents aged 18 or over, or companies or trusts residing in the UK for corporation tax purposes, can invest in mini-bonds. You will need to be a registered member of Crowdcube to invest in the mini-bonds listed on the Crowdcube platform. 

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About Crowdcube

You can see us and follow us at:

Twitter

Facebook

linkedin

Google +

 

 

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

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Venture Fund

The Fund is designed to provide individuals – who are perhaps short of time to carry out investment appraisal and portfolio monitoring, or who maybe simply prefer passive investing – with an opportunity to participate in crowdfunding with the added reassurance that your money is managed, and monitored for you by an independent professional fund manager.

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The Manager has many years of experience of building, managing and exiting unquoted investment portfolios. It is this experience that provides the added value with the expectation being that performance will be significantly improved.

Pre-Investment the Manager will carry out due diligence and any extra research deemed necessary and/or appropriate.

Post-Investment the Manger will work with the businesses, dealing direct with individual companies, monitoring and reporting their progress and development. The investor will receive six-monthly updates, as well as annual portfolio valuations.

When the time comes to exit, the Manager will negotiate the best available price on behalf on individual investors, and deal with all aspects of cash collection and distribution.

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The Manager may make a commitment to an investment in a company with a proviso that it raises the required 33% but no money will be invested until the 33% threshold has been hit and the money is forthcoming.

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Yes; the Manager will only make an investment into a company subject to the company raising at least 33% of its required capital on the portal.

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No; a company must raise 33% from the portal in order to be considered for investment from the Fund. The threshold does not guarantee investment from the Fund.

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The Manager has its own processes for due diligence (DD) and will carry out additional specific DD, prior to investment into a company as necessary. Individual circumstances vary but typically four areas are considered; technical, legal, financial and IP.

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Yes – the investor is always the beneficial owner of the shares. Rewards (if any) will be passed to the investor.

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Depending on the level of investment the Fund makes the Manager may seek to negotiate enhanced reporting and board rights. Such rights would be negotiated on a case-by-case basis.

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No – a preferred return is not guaranteed. It is a hurdle rate which, upon an exit, will be paid to investors prior to the Manager receiving any carried interest payments (share of the profits of the Fund’s investments). Returns over 7 per cent will be split 80:20 between the investor and the Manager with the investor receiving the larger part.

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It is always difficult to predict the exact timing of investments but the intention will be to build individual portfolios of up to 10 companies per investor within the first two years of an investor’s initial commitment.

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Investment will commence as soon as sufficient investor commitments have been made and the Manager has selected suitable investment opportunities.

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The Manager will assist the company receiving the investment with the EIS paperwork. Form EIS3 will be sent to individual investors for each qualifying investment by the Manager.

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All queries about individual investments should be direct to the Manager, being Strathtay.

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The Manager will have full discretion on deciding which companies to invest in and it is not possible for investors to exclude any sectors or specific companies. The Manager will however give due consideration to investments that may pose ethical or reputational risks.

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Your money will sit in a designated client account which is ring fenced from other accounts.

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You can withdraw from the Fund on three months’ notice at which point un-invested cash will be returned. Investments that have already been made will either be transferred to the individual investor or retained by the Manager and managed by agreement on a case-by-case basis.

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When an investment is sold the money will be returned to individual client accounts; it is then up to individual investors whether they wish to withdraw the money or to reinvest it.

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As an aspect of the portfolio management, the Manager will exercise or abstain from voting rights on your behalf.

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The relevant tax date is the date the money is transferred from the client account to the invested company. However, investors can carry back tax relief for 12 months from the date of investment.

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Any EU resident, as well as those living in Norway, Iceland, Lichtenstein and Gibraltar, can invest in the fund. Investors from other jurisdictions need to have a verifiable UK address.

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Equity Investments

To invest on Crowdcube you must be over 18 years old and legally entitled to invest.  Investors must be in the United Kingdom or a country where you may legally receive financial promotions of the nature provided by Crowdcube and are legally entitled to invest in the type of investments.  Crowdcube does not advertise investment opportunities to people in the United States, Canada or Japan or any other country where it would be unlawful for our pitches to be advertised and investors must not register or view pitches if they are resident in these countries.  

You must also categorise yourself as an investor in line with our registration process (which follows FCA regulations) and then complete a short questionnaire that assesses whether you fully understand the high risk nature of investing in start-ups and early stage businesses.  If you receive independent advice you are not required by the regulations to complete the quiz. 

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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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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.
 

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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 and will not have pre-emption rights. 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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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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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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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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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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Yes, when a Pitch reaches its Target Amount all Investors will receive an email to that effect.

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Viewing pitches and investing may not be lawful in some countries. In other countries, only certain categories of person may be allowed to view pitches on Crowdcube. Any person resident outside the United Kingdom who wishes to view pitches must first satisfy themselves that they are not subject to any local requirements that prohibit or restrict them from doing so.

In particular, unless otherwise stated by Crowdcube and permitted by applicable law and regulation, it is not intended, subject to certain exceptions, that any offering of the securities mentioned in pitches (the "Securities") by the companies seeking funding or Crowdcube would be made, or any documentation be sent, directly or indirectly, in or into, the United States, Canada or Japan.

Pitches and introductions to pitches are not an offer or solicitation to purchase Securities in any country in which such offers or sales are unlawful prior to registration or qualification under the securities laws of such country. In particular, the Securities have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to the above restrictions, 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 and who are legally entitled to invest, 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, 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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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.

FOS 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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Companies can choose a structure that works for them, with different classes of shares available. 

A Ordinary Shareholders have pre-emption rights and voting rights (subject to the company's Articles of Association and the Companies Act 2006).

B Investment Shareholders (generally "the Crowd" given the price barrier to A shares) don't generally do not get pre-emption rights meaning there is a higher risk of dilution.  B Investment shares also do not carry voting rights.

The different rights reflect the amount invested by investors and the company's raising funds can set the threshold of investment required in order to obtain A Ordinary shares.

Please read the Company's Articles of Association for full details of rights attaching to your shares.  These Articles are included in an email to investors before investment is finalised.  If an investor is not happy with rights in the Articles then he can cancel the investment before expiry of a 7 day period after the email containing the Articles has been sent.

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Mini Bonds

UK residents aged 18 or over, or companies or trusts residing in the UK for corporation tax purposes, can invest in mini-bonds. You will need to be a registered member of Crowdcube to invest in the mini-bonds listed on the Crowdcube platform. 

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If demand for a mini-bond exceeds its fundraising target, issuing companies may continue to raise money up to an upper target, which is disclosed in the Invitation Document outlining the bond offer. This Invitation Document is downloadable on the company’s pitch page and should be read carefully. 

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The issuing company reserves the right to close their fundraise if they reach their minimum target. This figure is disclosed in the Invitation Document outlining the bond offer and can be downloaded on the company’s pitch page. Investors should read this document carefully. 

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Each company issuing a mini-bond can set different limits on how many bonds investors can purchase. This information is disclosed in the Invitation Document outlining the bond offer and can be downloaded on the company’s pitch page. Investors should read this document carefully.

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Cancelling an investment is a straightforward process. Just log in to GoCardless and cancel the Direct Debit you set up as part of your original investment. While the pitch for the mini-bond you invested in is live, you can cancel your investment at any time. However, as soon as the pitch closes you have a maximum of 14 days to cancel your investment. Crowdcube will notify you by email when a pitch you have invested in has closed. 

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The tax treatment of interest payments will depend on each Bondholder's circumstances and tax status and whether or not their Bonds are held within a tax-favoured vehicle (such as a registered pension scheme).  The summary paragraphs below are intended as a general guide only, relate only to certain limited aspects of UK taxation and are based on current law and HM Revenue and Customs (HMRC) practice both of which are subject to change, possibly with retrospective effect. Prospective Bondholders who are in any doubt as to their tax position should obtain independent professional tax advice before applying for Bonds.

Generally, interest received by UK tax resident individuals is charged to income tax.  Payment of interest to UK tax resident individuals is subject to withholding tax at the basic rate of income tax (currently 20%). Issuing companies arrange for basic rate income tax to be deducted from each interest payment made to such Bondholders and paid to HMRC on your behalf.

If the Bondholder is a basic rate UK tax resident individual, there should be no further tax liability for the Bondholder in respect of the interest on their Bond investments.  If the Bondholder is a higher rate taxpayer or an additional rate taxpayer, further income tax will be likely to arise and they will need to account for the additional tax due to HMRC through their annual Self Assessment return.

Interest arising on Bonds held in a tax-favoured vehicle, such as a registered pension scheme, may have a more favourable treatment than that described above.  The exact treatment will depend on the nature of the vehicle.

Generally, interest received by a UK tax resident company is charged to corporation tax.  There is no UK withholding tax on interest paid by a company to a UK tax resident company (provided that the payer reasonably believes that the person beneficially entitled to the interest income is a UK tax resident company and provided that no direction to withhold tax has been received from HMRC).

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No. Mini-bonds represent a loan to the issuing company, not shares in the company. Bonds are traditionally sold for a fixed period with a fixed rate of interest and cannot be converted into shares. 

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The term length of mini-bonds varies from company to company and is explained in the Invitation Document outlining the bond offer. It is also displayed on the company’s pitch page. It’s important to read the Invitation Document carefully to understand what each mini-bond is offering. 

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The interest payment schedule for mini-bonds varies from company to company and is set out in the Invitation Document outlining the bond offer. It’s important to read the Invitation Document carefully to understand what each mini-bond is offering. 

Interest payments will be managed through the Crowdcube platform. Just log in to your portfolio to access and withdraw your bond interest payments.  

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No. Mini-bonds are non-transferrable and cannot be sold or listed on a secondary market. 

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Mini-bond issuers typically allow the estate of a deceased investor to prematurely redeem their investment. However, this is at the discretion of each issuer and each bond is different, so investors are strong advised to read the conditions set out in the relevant bond Invitation Document. 

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Mini-bond issuers typically reserve the right to prematurely redeem their bonds. However, each issuer and each bond is different, so investors are strong advised to read the conditions set out in the relevant bond Invitation Document.

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Yes. Mini-bonds offer a fixed rate of return. Full information about the interest rate is set out in the Invitation Document, which can be downloaded on the company’s pitch page and should be read carefully.

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Yes, companies are eligible to buy mini-bonds. There may be specific tax implications you need to consider, so we strongly recommend you speak to a financial advisor. 

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We strongly recommend that you do. 

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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 is communicated by Crowdcube Capital Limited and has been approved as a financial promotion by Crowdcube Ventures Limited, which is authorised and regulated by the Financial Conduct Authority. Pitches for investment are not offers to the public and investments can only be made by members of crowdcube.com 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.