A recent survey of our investor community found that 94% of investors think it is important, now more than ever, to support businesses they believe in. With 94% of investors then going on to say that if the opportunity arises to invest in a business they believe in, they are still open to investing despite Covid-19.
This encouraging news follows our recent analysis of activity on Crowdcube, which saw investment increase in May, reaching a lockdown high of £15.2m, more than double the amount in March. Standout raises from the likes of Freetrade, which raised £7m, and more than 23,000 investments into campaigns on Crowdcube showed that investors are still eager to back businesses they believe in, even in challenging times.
One investor stated that “it is too easy for even good businesses to go under in the current climate unless people put their money where their mouths are and support them in the most practical way possible.”
Supporting the next generation of businesses, so they can leave a mark on the world, is another key reason why investors are continuing to invest, commenting that “we have an opportunity to build on business that are relevant, sustainable and that presents a solution to pertinent problems that perhaps were not at the top of the agenda previously. Businesses with long-term views, resilience and mindfulness towards the environment and social entities have the opportunity to attract a loyal audience.”
This view was supported by another investor, who said: “with so much uncertainty about the future, it's important for the genuinely innovative business to get the support they need now.”
However, while investors are still investing despite Covid-19, 48% of investors said it had changed their investment behaviour:
- 45% are investing more
- 22% are still investing but were conducting more due diligence
- 16% are investing, but investing less
- 12% are investing, but only in sectors/businesses doing well right now
- 4% are not investing at all right now
- 1% are investing, but only in businesses they’ve previously backed
We also found that 65% of investors think that EIS or SEIS tax relief is more important now in light of Covid-19. While this is encouraging for investors on Crowdcube, where the majority of investment opportunities are eligible for tax relief.
While there is still a lot of uncertainty for many businesses at this time, it’s encouraging to see that investors continue to support the UK’s startup community, which will be crucial in helping our economy emerge from this crisis.
If you’d like to talk to us about how to harness the support of your community for your next funding round, find out more and get in touch to speak to one of our fundraising experts.
This data is based on 158 responses from Crowdcube’s investor community. Data collected from 29/05/2020 to 01/06/2020.