Funding for companies throughout their growth cycle
Crowd for Angels is a crowdfunding platform which helps businesses raise money through investors who benefit by receiving tax efficient shares and Crowd Bonds in the company.
Its goal is to bring innovative and appealing products to investors and provide funding for companies throughout their growth cycle.
Crowd for Angels investors get the opportunity to invest in shares in a tax efficient way through the use of Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) tax relief and through Bonds which can be held in a tax free IF-ISA wrapper.
There are no fees for investors and companies looking for investment only pay if the funding is a success.
We sat down with CEO Tony De Nazareth to find out how Crowd for Angels can help businesses raise the money they need to fuel their next stage of growth, and how anyone can become an investor in small private companies by spending as little as £25.
Q&A with Tony De Nazareth
Q: What type of funding do you provide?
A: Crowd for Angels provides funding through sale of shares or Crowd Bonds of the company. Shares are invariably linked with SEIS/EIS tax relief whilst our Crowd Bonds can be placed in an Innovative Finance ISA so that returns are tax free.
Q: Can anyone apply?
A: Yes, but our minimum funding amount is £50,000
Q: How does your business benefit?
A: We charge a success fee on funds raised. Our fees vary from 2 to 6%.
Q: What types of companies are the most lucrative for you?
A: Lucrative for us is measured by investor interest. A company that’s able to attract investors to its pitch is of most interest to us. For Crowd Bonds, this is based on interest rate offered and the level of collateral as security for the bond. For share offering, this is investor perception of the likely success of the company and the ability to realise their investment.
Q: Why, in your opinion, are more companies looking to alternative finance/funding?
A: The traditional sources of SME funding were the High Street banks but, in recent times, they have reduced their exposure because of capital restrictions and general reduction in risk appetite for this type of business.
Q: What are the main challenges for business and in your industry?
A: Undoubtedly a shortage of funds available for SMEs
Q: Have you ever made any major investment mistakes?
A: Fortunately not.
Q: What do you look for in a company?
A: Good management, sound business plan, competitive and investment of their own funds in the business.
Q: What types of companies are most suited to this type of investment/funding?
A: Companies which have passed their seed round and are revenue generating.
Q: How does it work/what’s the process?
A: The company has to create a pitch on the platform. The pitch will give details of the company, its management, the amount it is seeking, what the funds will be used for and how investors will be repaid and what they earn from the investment.
Q: What advice would you give to businesses looking for funding?
A: Have a sound business plan. If you are looking for funding through shares do not over value your business and if you are looking to crowd bonds then remember investors need to know how they will be repaid.
Q: What types of people are your investors?
A: As a crowd funding platform we take virtually all types of investors and these include restricted retail which have to pass a questionnaire before they can invest.
Q: Do you have to be rich to invest?
A: No, as the minimum investment on the platform is £25 for shares and £100 for Crowd Bonds.
Q: What single thing would help you better meet your business objectives?
A: A greater number of investors on the platform will allow us to fund more businesses.
Q: Any new products/services on the horizon?
A: The developments of Crowd Bonds that can be placed in an innovative Finance ISA is a significant achievement.