Clarifying the warnings about crowdfunding

Posted: Wed, 22 August 2012 by

Last week the FSA issued a report warning of the dangers of crowdfunding, and advising that it is only for sophisticated investors.

What they failed to point out is that this only applies to the equity model of crowdfunding, where backers buy shares, or parts of shares, in the project owner's company.

The reward model of crowdfunding - the Bloom model - involves no investment, no selling of shares, and the project owner retains 100% of their business.

If you want to use the equity model to raise funds for your business, then we recommend you use our friends at Seedrs, who are the only FSA regulated equity crowdfunding platform in the UK.

But if you don't want to give up your equity, then use Bloom or one of the other reward based crowdfunding platforms.

Do give us a call if you want to know more.