Simon Dixon, CEO and co-founder, of BankToTheFuture.com discusses the role his crowdfunding platform fills in the financial sector.
My wife, Bliss and I launched BankToTheFuture.com in September 2012, to make angel investing available to the masses. Traditionally investing in private companies has been left to rich people and institutions, but now anybody can invest in this asset class. We also offer start-ups and mature businesses a means to secure Crowd Finance by offer shares in their companies to investors online where people can invest starting from as little as £10.
In the first nine months after the launch, we helped to secure more than £400,000 for businesses pitching for investment. We had already proved the crowdfunding concept when we had secured our own funding on our own platform to create the BankToTheFuture.com platform.
Having worked in the investment banking sector myself, I firmly believe banking and venture capital can be transformed for the better by working alongside alternative finance institutions like ours that add more transparency to finance and banking.
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In the future what gets funded will, and should, reflect the values of society. Crowdfunding gives the public the power to invest in great ideas whether we’re talking about new businesses or established businesses looking beyond the high street banks for finance.
With that in mind, I have just launched a bid to become ‘the world’s first transparent investment bank’ by seeking to raise £1.6 million on our own crowdfunding platform over the next three months.
By this I mean every investor will be able to see exactly where their money is invested, how it is going to be used and will be able to make clear judgments based upon that knowledge. They can invest in what they believe in ethically and from a business perspective.
At BankToTheFuture.com, we have taken all the best practices used to raise billions of pounds for large companies: we have stripped out the up-front costs and put the opportunities online for small to medium-sized businesses to raise finance.
I believe we are at the vanguard of witnessing the de-institutionalisation of funding, with more people investing in this creative way. Crowds, rather than banks and venture capitalists are determining who gets funded – and who does not. People are voting with their wallets and they clearly want crowdfunding to be a sustainable type of banking and investment.
Today we are in an environment where there is more money than ever. That seems a ridiculous thing to say in the news of economic doom and gloom, doesn’t it?
The reality is that the money supply has doubled over the last eight years, yet it is harder than ever for a business to raise finance in an environment where banks do not want to lend money to businesses.
Venture capitalists are only interested in the later growth stage of business and there are simply not enough angel investors out there.
When we secure our Investment Banking licence, our investors will be able to manage a portfolio in growth and income generating private businesses and will be able to connect with the entrepreneurs directly to perform due diligence.
In a sentence: we are leading the way in democratising finance for businesses and investors in the UK.
Crowdfunding offers an opportunity not only for start-ups but mature businesses to pitch crowds of investors, crowdfunding also gives the general public the chance to become an investor, this is a place where people can invest as little as £10. This will create a new flood of money that was never previously available to start-ups.
As we can see Crowd Finance is not just a passing phase, crowdfunding is here to stay. The sector has been funding its own progress; we are now looking to create a transparent investment bank where people invest direct rather than through large funds. In the past banks and venture capitalists had to be persuaded before a sector could grow. Now the people are deciding and crowdfunding cannot be held back.