Crowd funding/Lending..experiences ?

littlevillage

This is a thread related to

http://www.boards.ie/vbulletin/showthread.php?p=97173891

but since that thread appears to be closed I am opening a new Thread where I am asking for peoples experiences with crowd funding.

Personally I am interested in becoming a lender probably with

http://www.linkedfinance.com

But as with all business opportunities if a story seems to good to be true (I am wary that it probably is)

I would like to hear from investors and what they have actually managed to get back as 'real' returns from investments. Which of the CYMK categories did you go for and why ?

I would also like to hear from borrowers.... the big question being what is the vetting process like in order to get listed on the LinkedFinance site, and why would you choose crowd funding instead of say a more traditional bank/credit Union/Venture fund ?

Graham

There's not really a large amount of activity in the Irish Crowd Financing arena at all.

There's the lending operation you mentioned above that crops up occasionally apart from them there's only been a couple of attempts at Irish crowd funding sites that pretty much fizzled out immediately.

I'm not sure is it because Ireland lacks the economies of scale to support the business model or is it a legal issue.

The crowd funding scene globally appears to fall into one of two camps, either equity or rewards based. One offering shares in the proposed venture, the other essentially offering a pre-payment discount on the proposed products of the venture.

The crowd equity type funding appears to be doing fairly well in the UK at the moment, predominantly because of the tax incentives for investments in ventures that qualify under the EIS/SEIS program. It's too early to judge the success (or failure) at the moment although I will say I have seen some spectacularly bad ideas get funding at absurd valuations that would never have attracted funding without the tax incentives. Equally I have seen some companies with great potential raise funds. Only time will tell.

If someone were to ask me about crowd-funding a business idea in the current market, I'd be recommending incorporating in the UK. Seedrs and Crowdcube are worth looking at to get a better idea of the UK market.

mneylon

I've lent a couple of times on Linked Finance
I do it primarily if the company is offering a useful "perk" to lenders - I'm not overly interested in the economic aspect of it, as the amount of money involved is small

There's also http://fundit.ie/browse which is closer to Kickstarter in model

I'd agree, however, that the Irish market for this (like most things) is small.

littlevillage

fundit.ie looks like a rewards based enterprise. The only reward I am interested in is $$$

I have been perusing some of the businesses on

Linked Finance

I am actually familar with some of the businesses ... and one of them in particular, I would have no problem investing in, but when you take account of the charges, the return is not all that great.