Crowdfunding

Crowdfunding platforms can be grouped under four categories: donations, mainly applicable to charitable giving; rewards, where the venture seeking funds offers something in return for the money pledged; equity, where the supporter acquires a shareholding in the business; and peer-to-peer (P2P) lending, where the ‘crowd’ can lend funds more quickly and at more competitive rates than institutional lenders. There are also more specialist forms of ‘alternative finance’ usually based on lending, including invoice financing, and supply chain financing.

However, the crowdfunding sector is complex, and rapidly growing. A reliable guide to the wide range of funding available is given on the Nesta-operated website www.crowdingin.com. We have included here just a few examples of crowdfunding platforms which have hosted successful campaigns by Scottish companies.

In principle, being web-based, crowdfunding platforms can operate independently of their location, but readers of this Guide might wish to look at those based in Scotland: Bloom VC, ShareIn, and Squareknot.