Q: What is Crowdfunding?
Some people describe crowdfunding as raising money for a business venture by asking a large number of people to contribute a small amount.
That's true, but to us, that description could equally apply to all the people who own shares in British Gas, or Barclay's Bank. We prefer to say that crowdfunding is investment like it used to be in the old days, before it was institutionalised by the Victorians. Businesses who want money get it from people personally. Two hundred years ago, businesses used to raise funds from their friends, and people they met in coffee houses. Now, everything old is new again.
Q: Can I list my business on your site?
No. There are plenty of sites that allow you to do that. Another Crowd is an independent site offering analysis and commentary for investors.We look at the scene in the UK, from the point of people who put money into crowdfunding, or are considering it.
In plain English, we're a magazine, and we hope to be an interesting one. In the formal language of investor proection, we are a publisher, but we do not give advice, and we do not sell financial products.
Q: What's A Good Company To Invest In?
That depends very much on, what you're interested in, what you've invested in before, and what kind of return you want to get out of it. That, by the way, is also how the industry regulators distinguish between advice (which is specific to a person's circumstances) and information (which isn't).
Our whole site is an attempt to help our readers answer that question for themselves. But we're no better at predicting the future than our Auntie Mabel, and there are plenty of reasonable,intelligent people who would disagree with the opinions we express here.
Wew hope you enjoy reading Another Crowd, but before you invest any money, you should consider taking advice from one of the financial advisers authorised and regulated by the FCA.
Q: What Sort of People Invest in Crowdfunding?
A lot of people take their first steps in crowdfunding when they put money into a project they believe in, like a village shop, or a fashion designer's new collection, and some of them think of it as more like sponsorship or patronage than an investment made in the hope of seeing a return. A lot of crowdfunding isn't about investment at all.
If you are investing in the hope of a profit, or with money that you can't afford to lose, we'd suggest that you don't put all your eggs in one basket. Make a portfolio of several investments. Also, find out how you can take avantage of the UK tax rules, especially those relating to Enterprise Investment Schemes and Seed Enterprise Investment Schemes (EIS and SEIS). The taxman allows investors in offset their losses against the profits they make on other qualifying ventures. Risk can be an adventure, and not just a gamble.
Q: Is Crowdfunding A Risky Investment?
It depends what you're used to. You have have to know what you're doing, and prices can go up as well as down. But frankly, if you want to find any kind of savings or investment that can beat inflation, you will find yourself faced with some kind of risk.
If a crowdfunding investment does well, you will get back more than you put in. If does badly, you get back less. The UK regulator, the Financial Conduct Authority , imposes a '10% rule', which says than anybody is allowed to put up to ten percent of their portfolio into crowdfunding, while those who take advice or have the relevant knowledge and experience can invest more.
Another thing you should bear in mind when investing is whether you might want to get your money back in a hurry. Some crowdfunding schemes are what the regulator and professionals in the industry call 'illiquid' . This might mean your money is tied up for a set amount of time, but it might also mean that you can only sell your investment if you can find somebody else who wants to buy it.
Q: So, What's the Point Of Another Crowd?
Our target audience is UK investors and people who want to invest in the UK and take advantages of UK tax incentives. We want to help you think for yourselves, rather than tell you what to do. We don't sell products, or give financial advice.
We aim to be more criticial and better informed than other crowdfunding sites, but also more focused on the needs of the crowd of investors, rather than the crowd that is trying to raise money. We are Another Crowd.