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Introducing our new secondary product for later-stage companies

By Crowdcube. 20th Aug 2020

DCO blog

We're pleased to announce that we've launched a new flagship secondary product, the Direct Community Offer (DCO). The DCO gives later-stage businesses a way of offering early investors a return on their investment while simultaneously giving new investors a chance to buy a stake in a business they believe in. The product solves the age-old problem of liquidity for early investors, which has been exacerbated by businesses staying private for longer, and represents an exciting next step in the evolution of investment crowdfunding.

While Crowdcube has previously completed secondary transactions involving single investors, such as those of Revolut (20x return) and BrewDog (1.8x return), the DCO now seeks to democratise this process, offering the shares of participating early investors to retail investors. The product will be open to European later-stage businesses looking for alternative ways to create liquidity. It addresses a key trend of companies, like Slack and Spotify, moving away from buzzy IPO listings to direct listings. The DCO connects three sets of stakeholders: entrepreneurs who wish to offer their communities a stake in their business, new investors via Crowdcube, and the current shareholders in the business who want to take up the opportunity to sell shares.

BrewDog has worked with Crowdcube to amass an army of shareholders, shown above at one of their annual AGMs.

We're seeing a global trend towards high-growth, household names, looking for alternative ways of rewarding early investors with some liquidity, without the burden of going public through a traditional IPO. These same forward-thinking businesses also love the idea of offering their loyal customers the chance to become new shareholders, without the need to raise further investment. The DCO solves this conundrum.

For European businesses looking for a new, alternative IPO track, our campaign-led approach is proven to maximise awareness, engagement and investment from a business's community, and ours. This proven track record of success will help ensure early investors get the liquidity they want and as many people as possible to become new shareholders in a business they love. We're applying the experience and expertise that we have developed by funding 90% of the most popular primary equity crowdfunding raises in Europe, and applying that to secondaries.

For businesses interested in our Direct Community Offer, you can find out more here.

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.