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THE 13 MOST SUCCESSFUL CROWDFUNDING CAMPAIGNS OF 2015

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The 13 most successful crowdfunding campaigns of 2015

Sean O’ Farrell is the managing director of Choice Loans, specialists in alternative finance options for businesses big and small.

Crowdfunding – the practice of funding a business venture by raising money online from a large number of people – has taken off in recent years. It’s now a popular method of alternative finance.

Various crowdfunding platforms have allowed small businesses the opportunity to source funding and get themselves up and running.

However, crowdfunding has also enabled some companies to realise some pretty big ideas. It’s not all about start ups offering a ‘new take on the burrito’, crowdfunding can also be a platform to launch potentially world changing concepts. A new infographic produced by Choice Loans, has taken a closer look at the world’s biggest crowdfunding projects.

It’s called ‘The 13 Biggest Crowdfunding Campaigns of 2015’, ranking them by both the amount of funds generated, as well as giving some more valuable insight into the number of backers and what the motivation was for people to invest.

Sitting top of the pile by some significant distance for 2015 is Elio Motors. Seeking funding for an ultra-high mileage, two seater, affordable car they were able to secure more than $42 million. Making it one of the biggest and most successful crowdfunding campaigns in history.

Investors backed the campaign in return for shares in Elio Motor, a company in which they could see potential for future returns. However, they also invested because the project offered an alternative to what the market currently provided.

The new Elio model promised to emit just one third of the CO2 of an average car, whilst being extremely affordable. It would also come with the highest possible safety standards.

It was this potential that appealed to more than ten thousand investors willing to part with their money.

In second place, with a promised investment of more than $12 million, with a colossal 37 thousand backers is Flow Hive. It’s a type of beehive that uses a plastic tap in the inner frame to source honey straight from the hive. This means that honey can be harvested without opening the hive, straight into the jar, cutting out costly and time consuming additional processes. It also means less disruption for the bees.

Next on the list is the BAUBAX Travel Jacket, a modern form of clothing with in built pillow, eye mask, gloves, earphone holders and various tech pockets. They raised almost $10 million with 45 thousand backers, which already shows an incredible potential market for the product.

Backers could choose between three perks as a return for their investment. One was the BAUBAX windbreaker or bomber jacket (6,200 backers), the blazer (3,559 backers) and the sweatshirt (3,100 backers). The product comes in four styles in total, for both men and women. It’s the most successful clothing campaign in the history of crowdfunding.

This top three were all US-based opportunities but there were some very successful campaigns in the UK too. Perhaps most notably, and newsworthy, was the live action experience Crystal Maze game. Based on a popular TV show from the 1990s, more than $750,000 was raised by nearly four thousand donations.

Backers were given one of a number of related gifts, including having their name inscribed on the Wall of Fame. The original host, Richard O’Brien, returns to the game in virtual form and it is already lining up to be a big hit with former viewers and fans, now in their 30s and 40s, many working in the corporate sphere.

Another of the more unusual products on the list includes a new action-adventure video game called Shenmue III. It’s a long awaited third instalment in the series, relying on fans of the previous two to back its production. This is a clever use of an established fan base, and one that worked, with a massive 69.3 thousand investors receiving digital, physical or trial versions of the game in return for their cash.

Games proved to be a popular investment in 2015, with an unusually named card game called Exploding Kittens being the fourth biggest crowdfunding opportunity of 2015. The game is based on a conventional card game but also includes exploding kittens (within the confines of the game) and laser beams (obviously the two go hand in hand). Backers received versions of the game, including some limited edition collectors deck options for larger investors.

Other products were more altruistic, including Reading Rainbow, an interactive reading library and video field trip archive to help children in the classroom. Also in the top 13 and making the list was Sondors electric bike, the world’s most affordable and versatile model to date; shopping channel offering shares; an ice cream company making low sugar products; and a brewery.

What the infographic shows above all is that when an idea is good enough it can capture the imagination of the investing public. People are willing to risk their own personal money to back an idea they think has a good chance of succeeding and making a difference.

What this means for small businesses with big ideas is that they’re no longer completely dependent on the bottom line of a bank manager’s ledger.

Alternative funding does work – the sheer number of people investing in the vast variety of products and services listed proves the case. It’s also a very convenient and cost effective way of advertising. Backers also invest some emotional capital in your company, meaning they are more likely to tell friends and boost your visibility in the market place.

However, as well as showing that companies can succeed using different forms of funding, what it also proves is that investors are looking into new ways of spending their money. It’s not all about financial returns on investment, people like to feel included and that they’re making a difference.

In other cases they simply want to fund something that they personally enjoy – in the case of the Crystal Maze and Shenmue III games.

Of course, companies considering the crowdfunding option should also be aware that for every success story, there is a failed attempt to raise funds. What you need to consider is how appealing your product is to potential investors.

You need to either be offering a part of a promising future or goods, services and products that can exert some kind of emotional response. Social causes account for about 30% of all crowdfunded projects, with existing products with strong fan bases making up a significant percentage too.

It’s also important to remember that on the growing number of crowdfunding platforms, if you don’t reach your intended target, you have to refund all the pledged money to backers. With more than half of all projects failing to reach their targets, this is a possibility you should consider.

If your idea is good enough, however, or your product exerts a broad appeal, there is no reason why your company couldn’t appear on this list in 2016.

13 big crowdfunding campaign

Investing

Northern Trust: Outsourcing Accelerates Through Pandemic as Investment Managers Seek to Improve Margins, Enhance Business Resilience, and Future-Proof Operations

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Northern Trust: Outsourcing Accelerates Through Pandemic as Investment Managers Seek to Improve Margins, Enhance Business Resilience, and Future-Proof Operations 1

White Paper Sees Increase in Managers Outsourcing Middle and Front Office Functions to Achieve Optimal Business Structures

According to a white paper published today by Northern Trust (Nasdaq: NTRS), investment managers of all sizes and strategies have been prompted to undertake a comprehensive review of their operating models as a result of the Covid-19 pandemic which has accelerated existing trends that are compounding cost pressures. This has led increasing numbers of managers to outsource in-house dealing and other functions, such as foreign exchange and transition management, hitherto seen as core.

While cost savings remain a core driver, and indeed are one outcome of outsourcing, costs are no longer the only focus. Far from being solely a defensive reaction to increased pressure on margins, the white paper (‘From Niche to Norm’) describes outsourcing as part of the target operating model, or moving toward the ‘Optimal State’ for many investment managers, and  explains how the focus “has expanded to the variety of other potential benefits offered – enhanced capabilities, improved governance and operational resilience.”

Gary Paulin, global head of Integrated Trading Solutions at Northern Trust Capital Markets said: “The pandemic has challenged a range of operational assumptions. Working from home has, for example, questioned the need for a portfolio manager to be in close proximity with the dealing desk. Previously considered essential, the pandemic has effectively forced firms to ‘outsource‘ their trading desks to remote working setups and the effectiveness of this process has disproved the requirement for proximity, in turn, easing the path to third-party outsourcing. Many investment managers are actively considering outsourcing to a hyper-scale, expert provider as a potential, cost efficient solution – one that maintains service quality and, hopefully, improves it whilst adding resiliency.”

Northern Trust’s white paper compares outsourced trading to software-as-a-service stating: “instead of carrying the cost and complexity of running an in-house solution, firms move to an outsourced one, free up capital to invest in strategic growth and move costs from a fixed to a variable basis in line with the direction of travel for revenues.” 

Guy Gibson, global head of Institutional Brokerage at Northern Trust Capital Markets said: “The opportunity to deploy capital to build new fund structures, develop new offerings, focus on distribution and enhance in-house research has been taken up by several of our clients to the benefit of their investment approach, and to the benefit of their investors.  Additionally, in the last two months alone, many firms have recognized that outsourcing to a well-capitalized, global platform has enabled them to take advantage of cost-contained growth opportunities in new markets.”

A further development, which has echoes of the journey the technology industry has already undertaken, is the move towards ‘whole office’ solutions, which represent the next potential wave in outsourcing.

According to Paulin; “recently we have observed a growing number of managers wanting to outsource to a single, hyper-scale professional service provider who can do everything, everywhere. This aligns with Northern Trust’s strategy to deliver platform solutions for the whole office, serving our clients’ needs across the entire investment lifecycle.”

The white paper can be downloaded here.

Integrated Trading Solutions is Northern Trust’s outsourced trading capability that combines worldwide locations and trading expertise in equities and fixed income and derivatives with access to global markets, high-quality liquidity and an integrated middle and back office service as well as other services, such as FX. It helps asset owners and asset managers to meaningfully lower costs, reduce risk, manage regulatory compliance and enhance transparency and operational efficiency.

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How are investors traversing the UK’s transition out of lockdown?

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How are investors traversing the UK’s transition out of lockdown? 2

By Giles Coghlan, Chief Currency Analyst, HYCM

Just when we thought we had overcome the initial health challenges posed by COVID-19, the UK Government has once again introduced lockdown measures in certain regions to curb a rise in new cases. This is happening at a time when the government is trying to bring about the country’s post-pandemic recovery and prevent a prolonged economic downturn.

This is the reality of the “new normal” – a constant battle to both contain the spread of the virus but also avoid extended economic stagnation.

Of course, no matter how many policies are introduced to spur on investment, traders and investors are likely to act with caution for the foreseeable future. There are simply too many unknowns to content with at the moment.

To try and measure investor sentiment towards different asset classes at present, HYCM recently commissioned research to uncover which assets investors are planning to invest in over the coming 12 months. After surveying over 900 UK-based investors, our figures show just how COVID-19 has affected different investor portfolios. I have analysed the key findings below.

Cash retreat

At present, it seems that by far the most common asset class for investors is cash savings, with 78% of investors identifying as having some form of savings in a bank account. Other popular assets were stocks and shares (48%) and property (38%). While not surprising, when viewed in the context of investor’s future plans for investment, it becomes evident that security, above all else, is what investors are currently seeking.

A third of those surveyed (32%) said that they intended to put more of their wealth into their savings account, the most common strategy by far among those surveyed. This was followed by stocks and shares (21%), property (17%), and fixed interest securities (17%).

When asked about what impact COVID-19 has had on their portfolios throughout 2020, 43% stated that their portfolio had decreased in value as a consequence of the pandemic. This has evidently had an effect on investors’ mindsets, with 73% stating that they were not planning on making any major investment decisions for the rest of the year.

Looking at the road ahead

So, it seems that many investors are adopting a wait-and-see approach; hoping that the promise of a V-shaped recovery comes to fruition. The issue, however, is that this exact type of hesitancy when it comes to investing may well slow the pace of economic recovery. Financial markets need stimulus in order to help facilitate a post-pandemic economic resurgence, but if said financial stimulation only arrives once the recovery has already begun, the economy risks extended stagnation.

It seems, then, that there are two possible set outcomes on the path ahead. The first is a steady decline in COVID-19 cases, then an economic downturn as the markets correct themselves, followed by a return to relative economic stability. The second potential outcome is a second spike of COVID-19 cases which incurs a second nationwide lockdown – delaying an economic revival for the foreseeable future. At present, the former of these two scenarios is seemingly playing out with economic growth and GDP steadily increasing; but recent COVID-19 case upticks show that it’s still too soon to be certain of either scenario.

A cautious approach, therefore, will evidently remain the most common investment strategy looking ahead. But investors must remember that, even in the most uncertain times, there are always opportunities for returns on investment. Merely transforming a varied portfolio into cash savings risks a long-term decline in value.

High Risk Investment Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information please refer to HYCM’s Risk Disclosure.

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Hatton Gardens 5 top tips for investing in Diamonds

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Hatton Gardens 5 top tips for investing in Diamonds 3

By Ben Stinson, Head of eCommerce at Diamonds Factory

Investing in diamonds can be extremely rewarding, but only if you know what to look for. For investors who lack experience, finding your diamond in the rough can be quite daunting.

For even the most beginner of diamond investors, the essentials are fairly obvious. For instance, you need to ask yourself will the diamond hold its value over time? What’s the overall condition of the stone and the jewellery? Is there history behind the item in question?

Although common sense plays a big part in investing, people often need insider tips and tricks to go from beginner to expert. Tony French, the in-house Diamond Consultant, at Diamonds Factory shares his professional knowledge on the 5 most important things to look for when investing in diamonds.

1: Using cut, weight and colour to determine value

Firstly, consider the shape, colour, and weight of your diamond, as this can play a pivotal role in guaranteeing growth in the value of your item. Granted, investing trends change with time, but a round cut of your diamond will almost always be the most sought after. The cut of your diamond is incredibly important, as it can influence the sparkle and therefore, the overall value. It’s a similar story for the intensity of some colours, such as Pink, Red, Blue, Green etc. Concerning weight, the heavier (bigger) stones will generally increase in value by a bigger percentage. Collectively these factors also contribute to the supply and demand aspect, which will determine their high price, and will ensure your item is re-sellable.

2: Provenance

Looking for significant value? Well, aim to own jewellery or diamonds that come from an important public figure. If you’re lucky enough to own a piece that has significant history, or was owned by a celebrity or person of interest, it’s an absolute must to have concrete evidence of this. Immediately, this proof will increase an item’s overall value, and there’s a good chance the stardom of your item might drum up interest amongst diehard fans, increasing the value even further…

Equally, it’s possible to proactively bring provenance to unique diamonds of yours. For instance, you can offer to loan bespoke, or unusual pieces for film, theatre, or TV performances – then it can be advertised as worn by xyz.

3: Find the source

Ben Stinson

Ben Stinson

Establishing your diamond’s source is one of the most important things you can do when investing in diamonds. If you’re starting out, try to purchase diamonds that have NOT been owned by too many people, as the overall value of the diamond will reflect multiple ownership. Alternatively, I’d always recommend buying from suppliers like ourselves or other suppliers and retailers, who buy directly from the people who have had them certified.

Primarily, this will allow you to have a greater degree of transparency, which is crucial when buying such a valuable item. Next, you should immediately see an increase in value of your diamonds, as identifying a source will allow traceability and therefore, market context.

4: Certification

Linked closely with my previous point, is the requirement to ensure that your diamonds are certified by a credible lab, and you have the evidence to prove so (a written document with specific grading details about your diamonds) – this will remove any doubts of impropriety.

It’s essential to remember that not all labs are the same, and many labs are better than others. Both the AGS (American Gem Society) and GIA (Gemological Institute of America) have great reputations and are world renowned. I’d recommend doing your own research into the labs, and when you’ve found the pieces that you’d like to invest in, then make an informed decision based upon your findings. Ultimately, proving certification will make your stones easier to insure, and deep down, you can have peace of mind knowing you have got what you have paid for.

Don’t forget to keep this paperwork in a safe location as well – you’d be surprised how many people we’ve met who have lost, or forget where they’ve placed it.

5:  Patience is a virtue…

If the market is strong, it might be tempting to look for an immediate sale once you’ve purchased a high value item. However, I suggest holding onto your diamonds for some time before even thinking about selling. More often than not, an item is more likely to increase in value over a few years than a few days – try and wait a little longer!

Equally, I would encourage having your diamonds, or jewellery professionally valued regularly. If you don’t have the knowledge to make a rough judgement on how much your pieces are worth, a consultant or expert can provide both a valuation, and contextualise that amount in the wider market. From there, you should be empowered with the knowledge to decide whether to keep or sell.

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