{"id":2745,"date":"2022-03-29T05:31:57","date_gmt":"2022-03-29T04:31:57","guid":{"rendered":"https:\/\/uk.legalvision.com.au\/?p=2745"},"modified":"2025-07-02T00:41:39","modified_gmt":"2025-07-01T23:41:39","slug":"uk-equity-crowdfunding","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/startups\/uk-equity-crowdfunding\/","title":{"rendered":"How To Conduct an Equity Crowdfunding Campaign"},"content":{"rendered":"\n

As an early-stage business owner in the UK, you may need to raise funds at some point. This can be for various reasons, such as expanding your business, developing your product, or acquiring another business. Equity crowdfunding is one way of raising funds for your company if you are not listed on a public stock market. <\/span>Equity crowdfunding, also called \u201cinvestment-based crowdfunding\u201d, is a way for businesses to raise money by offering shares to platform investors. If you have determined equity crowdfunding is the right avenue to raise startup financing, the next step is planning the campaign. This article will explain what is equity crowdfunding and outline some important legal and commercial factors to bear in mind when conducting an equity crowdfunding campaign.<\/p>\n\n\n\n

What is Equity Crowdfunding?<\/h2>\n\n\n\n

Put simply, equity crowdfunding is where individuals invest in early-stage businesses which are not trading publicly<\/a>. In other words, a business that is not listed on the stock market.\u00a0<\/span><\/p>\n\n\n\n

This is beneficial to both the investor and the company. Firstly, investors can put their money into new and exciting early-stage businesses. In addition, the business can get alternative funding without going to a traditional investor, such as a bank. <\/span><\/p>\n\n\n\n

As a result, your business could get lots of exposure without needing to appeal to wealthy investors.<\/span><\/p>\n\n\n\n

How Does an Equity Crowdfunding Campaign Work?<\/h2>\n\n\n\n

A business looking to raise equity financing must approach a crowdfunding platform. This platform connects the startup with prospective investors looking to acquire small stakes in the business. Different platforms have different approaches. For instance, some operate in a specific sector, such as renewable energy or property. Others may only connect a startup with debt investors rather than equity investors. <\/p>\n\n\n\n

As a business seeking equity crowdfunding, you need the platform\u2019s approval to pitch your company to investors. Therefore, most equity crowdfunding platforms have two key stages before you begin to raise equity financing, including the:<\/p>\n\n\n\n

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  1. application to pitch to investors; and<\/li>\n\n\n\n
  2. pitching process. <\/li>\n<\/ol>\n\n\n\n

    Most platforms are selective. That is, most businesses that apply to pitch to the platform\u2019s investors are unsuccessful. Even those who join the platform may struggle to raise sufficient financing once approved to pitch. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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