This story was delivered to BI Intelligence " Fintech Briefing " subscribers. To learn more and subscribe, please click here . U.K. equity crowdfunding platform Crowdcube announced that it planned to raise £5 million ($7 million) from its members in July and attracted around £39 million ($51 million) in pledges on its preregistration site. Last week, it revealed that the final volume raised was £8 million ($11 million). This is the largest UK crowdfunding round to date, and more than double the previous record of £4 million ($5 million), raised by money management fintech GoHenry. It plans to use the money to create a platform for secondary trading. Investors who buy a stake in a private company, via equity crowdfunding or other means, typically only get a return if the company is sold or listed. Crowdcube plans to create a platform that will enable shareholders in any UK private company to sell their stake to other investors, offering a quicker route to returns. Both professional investors and the inexperienced investors who make up the bulk of Crowdcube’s "crowd" will be able to use the platform. This concept is similar to that used by US firm NASDAQ Private Market , which enables investors to trade stakes in private companies. But there are a number of hurdles that Crowdcube’s platform will have to overcome in order to be successful: Protecting investors’ tax breaks. In the UK, investors who buy shares in small businesses qualify for certain tax breaks. But in order to realise those benefits, investors must hold onto the shares for at least three years. Crowdcube will have to find a way to make sure investors who sell early don’t lose out, otherwise trading volumes on the secondary market would likely be limited. A secondary market could cause fluctuations in […]
