In the face of what looks like a pullback in funding from VCs and angel investors, crowdfunding platforms are showing their agility in efforts to endure.
In addition to the obvious move of focusing on funding campaigns for start-ups in sectors that are in-demand in a lockdown situation (digital GP, farm-to-table delivery and, of course, subscription toilet paper), Seedrs and Crowdcube are combining emergency measures aimed at allowing start-ups to extend live campaigns and access raised funds quicker than usual, with leveraging community support for local hero businesses and lobbying the government on short-term measures to increase the flow of angel funding to startups (like an increase in the EIS tax relief).
Given the high degree of alignment between the crowdfunding platforms and the startup community (Seedrs and Crowdcube are themselves venture-backed, loss-making growth companies after all), this is a encouraging sign for startups that crowdfunding may be able to, at least partially, fill a funding gap left by a VC pullback.
“[Startups] are going to be more resilient [than other small businesses]. Their crowdfunding communities are going to rally around them… Like, I’m an investor in a local beer business and I want to back them.”