What is Crowdfunding?
When investing, your capital is at risk.
For investors, crowdfunding offers the opportunity to make money by investing in businesses they believe in. For the businesses doing the crowdfunding, it presents the chance to increase brand exposure and raise investment from their own advocates and customers.
As a challenger brand, CROSSIP exists to oppose the existing perception of the NoLo industry and to bring inclusive yet sophisticated and, quite frankly, exquisitely scrumptious drinks to the masses. We’re immensely excited to announce that we’re crowdfunding on Seedrs to further our impact!
For those of you who are curious, we thought we’d share a little more information about what crowdfunding actually entails and why we’re doing it.
So, here’s our explanation…
What is crowdfunding in simple terms?
Crowdfunding is an online method of fundraising, enabling the fundraisers to access money from multiple sources through online channels. Individuals, organisations and businesses use it to build capital with which to fund projects, products, services and growth.
It allows individuals who love a product or service to share in the success of the business by investing. Crowdfunding has lowered the barriers that once prevented ordinary people from investing since there is no longer any need to be a wealthy angel investor or institution. Nowadays, anyone with £50 can invest!
For businesses, crowdfunding allows the company to raise money to fund their growth ambitions but to amass that money from multiple smaller sources (who are often advocates for the brand) rather than one large investor.
For investors, crowdfunding enables people to invest in the brands they love at a really early stage. Whilst this can be risky business, it also frequently (in the UK) comes with massive tax advantages, like the Seed Enterprise Investment Scheme (SEIS) or the Enterprise Investment Scheme (EIS).
Types of crowdfunding
Nowadays, pretty much anyone can crowdfund and many crowdfunding platforms have branched out to offer services to individuals as well as businesses and charities. For example, GoFundMe enables individuals to receive financial support for an emergency or personal project and Patreon makes it possible for creatives to receive ongoing funds to support their work.
But we digress! For businesses (like us), there are numerous types of crowdfunding, including:
- Equity crowdfunding
- Peer-to-peer lending
- Rewards-based crowdfunding
- Donation-based crowdfunding
We could go on for days about the different types of crowdfunding but we’re sure you’d prefer us to be short and sweet, so we’ll get to the point and focus on the type of crowdfunding we’re doing at CROSSIP…
What is equity crowdfunding?
Also known as investment crowdfunding, this model involves a brand selling shares in exchange for capital to launch or boost the success of their business. In other words, we’re selling our souls to you lot, by the slice!
How does crowdfunding work?
There once was a time when investing was accessible only to experts and those who could afford financial advisors. Nowadays, with the development of technology and numerous easy-to-use online platforms, investing is simpler and safer.
For example, Seedrs enable all types of investors to invest in businesses they believe in and share in their success. Here’s a breakdown of how to invest using the Seedrs crowdfunding platform:
1. Discover businesses
Search for a business you know is crowdfunding (like us!) or browse through the companies that have campaigns listed on the website. You can communicate directly with the entrepreneurs through the Seedrs platform to ask questions and request further information.
2. Choose and invest
Decide how much you’ll invest and use your debit card to securely pay for your investment. Alternatively, you can invest via bank transfer. Seedrs enable you to create a diverse portfolio, facilitating the management of multiple investments all in one place.
3. Engage and share in the success
Once the crowdfunding round has closed, you’ll be a legal shareholder! You’ll be able to interact with the businesses you’ve invested in and receive updates via the Seedrs platform. What’s more, you’ll receive your return on investments if your chosen businesses do well!
Why is CROSSIP crowdfunding?
We plan to use the proceeds to scale the brand in the UK and launch further export markets. Specifically, we will invest in our sales team and marketing efforts.
Crowdfunding will also enable us to foster a community of advocates who share our ambition. Together, we can challenge the drinks industry to provide sophisticated alcohol alternatives that everyone can enjoy, whenever and for whatever reason they choose not to drink alcohol.
The more individuals who invest in our brand, the more mouths that can spread the word about CROSSIP, alcohol-free spirits and the NoLo industry in general.
What are the advantages of crowdfunding?
Crowdfunding benefits more than just the brand raising funds, you will also benefit from owning a slice of CROSSIP!
It goes without saying that the primary benefit of investing is the opportunity to increase the value of the principal amount invested. We’re not saying you’re going to become a millionaire if you invest in CROSSIP…we’re just saying it could happen!
By investing in our inclusive alcohol-free brand, you’ll benefit from the EIS and SEIS income tax relief schemes, whilst growing and diversifying your investment portfolio. You also get to join our mission of bringing inclusive and delicious alcohol-free drinks to the masses and rest in the knowledge that you’re contributing towards a good cause.
Are there any risks associated with crowdfunding?
Investing in businesses, particularly those at early stages of growth, can be incredibly rewarding. However, it does come with a few risks and we would very much like you to be aware of those. We recommend only ever investing what you can afford to lose since there is always a chance you could forfeit your invested capital or not see any return on your investment.
Visit Seedrs’ Risk Warnings to find out what else you need to consider before choosing to invest.
Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future. Seedrs does not make investment recommendations to you and any investment decision should be made on the basis of the full campaign. No communications from Seedrs, through email or any other medium, should be construed as an investment recommendation.