What is Equity Crowdfunding?
Equity crowdfunding is a way of raising money using the power of the crowd by approaching a large number of people who may be willing to invest their money in return for equity in the business.
When you invest in equity you buy a percentage, or share, of a business in the hope that the value of that company will increase over time. In the event the business you have invested in goes on to ‘exit’ at a higher value than when you invested, you get a return on your investment and make a profit.
What are the possible returns?
The main way you can make money from your investments is by selling your share in a business for more than you paid for it. If the business grows to a point where it floats on a stock market, is bought by a larger company, or the company management buy back equity from investors, you are likely to be able to sell your shares.
Money Dashboard expects to maximise return through a strategic industry acquisition path that would return a minimum target of 5x (i.e. £100m+) in 3-5 years. We have already received interest.
There are a few examples from comparable companies that give credence to this plan, notably the sale of Mint.com to Intuit for $170m (with a user base of 1m) and Simple to BBVA for $117m (with a user base of 100k).
We are also exploring the possibility of an IPO, and the company is part of the London Stock Exchange ELITE programme which exists to prepare ambitious and promising companies for their next stage of growth, including IPO.
What are the additional benefits of becoming an investor?
In addition to owning part of a fast-growing Fintech business, you may be eligible to receive EIS tax relief on your investment. This is a very generous scheme from the Government which offer 30% tax relief on investments they make for EIS qualifying companies (of which ours is one).
You can invest up to £1,000,000 in any tax year and receive 30% income tax relief provided you have sufficient Income Tax liability to cover it. Furthermore, any gain is Capital Gains Tax (CGT) free if the shares are held for at least three years and the income tax relief was claimed on them.
Additionally If you invest more than £500 in this round, you will unlock free access to platinum membership. As with the standard membership open to all users, platinum members can earn an additional meaningful stake in the business by referring their friends to join Money Dashboard. The rate of reward for platinum members is supercharged, allowing you to earn in excess of 1,000 member shares (valued in line with equity shares) for helping us grow our community.
Please note, the availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and of the company concerned, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.
- Crowdcube provide a helpful explanation of the main risks with crowdfunding here. As with all forms of investing, it’s important to maintain a diversified portfolio so that if only a portion of your investments make a successful return, they may help to cover any other potential losses.
- More information about how the actual process of investing on Crowdcube works here