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COVID-19: Adapting to new challenges

By Crowdcube. 20th Mar 2020

Our response to covid 19

As the impact of COVID-19 continues to unfold, we wanted to outline how we can continue to support you as a member of our community, whether you’re an investor, an entrepreneur, or member of our Funded Club. Since sharing our initial update last week, we have continued to monitor the rapidly evolving situation and adapt as needed.

While this will be a challenging time for many, we stand by our community and their families. We know that every businesses’ situation is different, so we’re working closely with those currently raising fund with us, or planning to in the coming weeks. We have an unshakable belief in entrepreneurs and believe they will rise to the challenges that Coronavirus will no doubt throw at them. The whole Crowdcube team remains committed to helping businesses through these difficult times.

Investing

Crowdfunding investments are long term, so investment behaviour on Crowdcube is far less susceptible to macroeconomic factors as the public markets. However, this is a fast-changing situation, so we will continue to closely monitor activity and developments in the economy across the UK, Europe and globally.

We don’t expect the current situation to cause any delay in shares being issued, but we will, of course, update you if this changes. We have robust due diligence processes in place and all companies that raise with us go through final due diligence before they receive the investment. As we are in unprecedented times, our team will be working with all companies to confirm that we are comfortable closing a funding round.

Raising finance

We expect that raising finance will now take longer than usual, so we suggest allowing for longer lead times when considering your next funding round. We’re committed to giving the businesses the time they need to complete a successful round on Crowdcube, so campaign timelines will now be more flexible.

We recommend keeping in close contact with your investors, now more than ever. It’s vital that you proactively talk to them and reassure them about your short term response to recent events and your long-term strategy.

If you have any questions or queries relating to your fundraising round, please don’t hesitate to get in touch with your Campaign Manager.

We appreciate that every business’ situation is different in these challenging times, so whether you’re considering short-term funding options now, or evaluating your longer-term funding strategy in preparation for the global bounce-back, we’re here.

There are several existing products and some new measures we have now introduced to help businesses through this challenging time:

Private rounds: an investment round only open to your existing shareholders. This is a streamlined funding option that enables you to raise funds quicker with limited internal resources, from your existing shareholders who are already familiar with your business and long-term plans.

Community-only round: an investment round open to your existing shareholders and your community, that’s not publicly available on Crowdcube. This is a funding option that allows you to limit the public exposure of your round, by making it accessible to shareholders and potential investors who support and understand your business.

We’re also introducing the following measures to give you greater flexibility and a better chance of successfully raising investment with Crowdcube:

Longer private period: this will give you longer to secure cornerstone and community investment prior to going public.

Early drawdown of funds: we know getting investment into your business could be crucial, so we’ll help by working with you and your investors to close material investments into your pitch before it is formally closed.

Extensions of public rounds: we understand funding may take longer than usual, so we’re committed to giving you the time you need to complete a successful round with Crowdcube.

We’re committed to supporting our community with open, honest and transparent advice and flexible ways of raising funding during these challenging times.

Following recent government advice, the Crowdcube team will be working remotely for the foreseeable future. Working remotely has been part of Crowdcube culture for years, so we have tried and tested systems in place, and a technology infrastructure that’s designed to ensure business continuity in times like this.

We don’t expect disruption to your Crowdcube experience, but we will update you if the situation changes. Face-to-face meetings with our customers will be done via video conferencing from now on, but we remain on hand and responsive as ever to all your queries and concerns.

Funded Club

Crowdcube was founded on the belief that we could build a more wonderful world. Even in darker times, we're here to shine a light on a more positive future. That’s why we’re sharing some of the ways our Funded Club can help spread some joy, as well as how you can continue supporting the businesses you love.

From helping solve the hand sanitizer shortage to providing free hot drinks to NHS workers, these businesses prove that in times like this, a strong community is more important than ever. Read more on this on our blog.

Stay safe, and if you have any questions or queries, please do get in touch.

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Risk warning

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.

Crowdcube is authorised and regulated by the Financial Conduct Authority (FCA) and the Comisión Nacional del Mercado de Valores (CNMV). This page has been approved by Crowdcube. 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. Further restrictions and Crowdcube's limitation of liability are set out in the Investor Terms and Conditions.

Investment opportunities are not offers to the public and investors must be eligible Crowdcube members. Please seek independent advice as required as Crowdcube does not give investment or tax advice.