Even celebs like Crowdfunding
Crowdfunding has become a real buzz word over the last couple of years with many celebrities also putting their names to various schemes. More recently we have seen sports personalities like Andy Murray and TV celebrities like Kevin McCloud (Grand Designs presenter) invest in such schemes.
A recent article in The Telegraph referred to crowdfunding as “pop-up’ stock exchanges where all sorts of businesses can essentially offer shares in their company with little to no regulations, unlike more regulated trading schemes like Forex Trading and Stocks and Shares.
Of course like many potential investment opportunities it can be ‘flowered’ up to sound interesting and virtually risk free.
In reality how successful are these crowdfunding investment schemes. Well the article went on to review a large number of these schemes to see how much return they could provide. They looked at around 367 businesses which sourced funding from the five largest and most well-known crowdfunding websites over a two year period (2011 to 2013).
The results were quite interesting. It found that seventy of the 367 firms looked at were no longer trading at all or in serious financial difficulties. What does this mean for the original investors? Quite simply that have or are about to lose all of their investment.
However 80% were still trading although only one of them had actually generated a solid return for their investors.
A further 58 of them had gone on to raise even more funds which would suggest that they were off to a flying start and looked promising for future returns.
Celebrity ‘endorsed’ crowdfunding
It is not just the general public that have taken to the whole crowdfunding concept. Andy Murray took up a stake in the salad bar chain Tossed and also invested in a 3D “virtual reality” firm Trillenium.
TV celebrity Kevin McCloud actually raised £2 million for his own project Hab Housing through crowdfunding.
So it looks like even celebrities have taken to the crowdfunding bug. We will keep an eye on schemes and update you if there are any Marbella based celebrity funding schemes on offer.