Crowd funding has grown “dramatically” to establish itself as a genuine source of finance, not just an alternative to bank loans, and the food and drink industry is one of the most popular among investors, Crowdcube’s co-founder and chief marketing officer Luke Lang told FoodManufacture.co.uk.
“We’ve seen a dramatic growth … a heck of a lot of interest right across the board – food and drink has always been popular,” Lang said.
‘Opportunity’
“The Great British public seem to care about their food and drink and love investing in these types of businesses, so certainly for companies that are positioning themselves in the right manner, there is a real opportunity that they can go and raise significant amounts of money.”
Crowdcube has seen its investor database grow from 60,000 to 124,724 in the past 12 months, Lang claimed. It has also seen the amount of money it has dished out to businesses grow – from £2M in 2011 to £35M in 2014. So far the Soho-based crowd funding firm has funded 178 businesses with more than £51M.
Lang said better quality businesses – such as the River Cottage and the Eden Project – had started to apply for crowd funding from its network of fans, which helped raise its popularity among investors.
“We’re getting better at marketing crowd funding,” said Lang. “There’s a lot more interest and a lot more people that are interested in Great British businesses – whether they are technology, environment or food and drink.”
As well as providing valuable investment to help firms boost production or launch new packaging, businesses could benefit from having a number of wealthy and dedicated investors involved with their business, Lang claimed.
“When you’ve got a network or a community of 50–150 investors, you’ve got a real core group of stakeholders and advocates for you company – which for a small business can be really, really important in the early days,” he said.
‘Tap into expertise’
“Some firms have had investors come in as non-executive directors; you can still tap into that expertise without necessarily having to pay huge amounts of money for it.”
He encouraged entrepreneurs and businesses seeking crowd funding to be engaged in the process and passionate about the journey to securing investment to help them be as attractive as possible to investors.
Watch out for our video interview with Lang in which he reveals his top three tips for food and drink businesses to help them stand out from the competition when seeking investment.
Food and drink businesses that have received investment through Crowdcube include salad dressing firm Righteous, Super Jam, Healthy Nibbles, UBREW and Soul Tree Wine.