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What will you ask at Nesta’s FREE Spotlight on Crowdfunding Event?

The Spotlight on Crowdfunding event being run by Nesta in Edinburgh on Friday 2nd May will be a great opportunity to speak directly to experts in the field. Will you be there and what might you ask?

Nesta are running a Spotlight on Crowdfunding event in Edinburgh with speakers including Neil Simpson, the Financial Director of Brewdog, Nicola Horlick the well known city figure and crowdfunding advocate following the success of Glentham Capital on Seedrs, Liam Collins who has lead Nesta’s fantastic crowdfunding research, and Rachael Brown of Impact Arts.

I am honoured to have been asked to chair the event which will be driven by questioning from the audience and it should be a fascinating opportunity to explore the rapidly developing and maturing world of crowdfunding and how it might work for you.

You can still be in the audience for this free event as places are available. Simply visit Eventbrite to register

A quick review of some of the things that might come up from a Scottish perspective might include the enduring and ongoing success of Brewdogs recently closed third DIY run equity for punks funding round bring to a total a £7.5 million investment programme. Watch my interview with James Watt co founder of Brewdog here. Alternatively what of PlanBee the Scottish based hive management scheme who are currently running an Equity round on Crowdcube. Maybe Lupo, another Scottish success this time on Kickstarter, might inspire a thought about how crowdfunding can bring products to market.

Or perhaps the impact of the recent FCA rules on equity and P2P platforms might come up or the emergence of Scottish based platforms like ShareIn, SquareKnot or BloomVC might be a topic. Maybe the importance of investor relations after a crowdfunding round might even come up.

Its up to you and open to you so come along and help me to ask the experts.

Scottish Crowdfunding Ending 2013 on a Positive Note

The closing months of 2013 seemed to demonstrate something of an up tick in the levels of interest in crowdfunding in Scotland.

East Fife football club launched a campaign for £100,000 to develop a new stand and other facilities at the club.

A second equity platform, ShareIn, launched in Scotland. Brewdog have pursued a further funding round in their own inimitable style closing in on a £4.25 million investment through their Equity for Punks scheme.

The  MacAulay & Co show show on BBC Radio Scotland  invited me on to speak about the phenomenon of crowdfunding – and you can hear that here if you missed it.

The first successful Scottish equity crowdfunding round on Crowdcube  completed as NewGalexy hit and exceeded their target – having sought some £100,000 for 10% of equity and reaching £200,000 for 20%

The Scottish Parliament took a real interest in crowdfunding as part of an investigation by the Economy, Tourism and Energy Committee began and investigation of the alternative funding sector. We were privileged to be asked to give evidence to the committee and if you missed that session you can see it here.

It is particularly pleasing to see the political classes recognising the potential of the democratising of capital to bring about positive change, entrepreneurial dynamism, and direct engagement of the people with shaping their financial future

And all that is a year when the first Scottish hybrid equity platform Squareknot launched and we released the ground breaking Crowdfunding the Scottish Perspective report – commissioned by the Glasgow Chamber of Commerce. Whilst the report demonstrated that Scotland was under using the resource and opportunity of crowdfunding perhaps this flurry of events late in the year might indicate some positive developments to address that.
What does it promise for 2014? Well we hope only good things. But one thing for certain is that whatever does happen you will find the best commentary, coverage and insight on crowdfunding and the crowd empowered economy and society here at twintangibles.

Lots of Breweries are Crowdfunding

Back in 2011 we published a report for the MSKE Conference in Portugal called Getting Something Brewing. It was based on research we had undertaken on the craft brewing sector in Scotland which focused on the possibilities for these small businesses to create value from the use of social and collaborative technology.

Our main point was that this was a sector that is highly tribal, and increasingly digital and that, by developing a crowd based asset, these companies could improve both on operational efficiencies, drive sales and marketing and create something that could generate significant value for them as opportunities progressively arose in the social era.

One area in particular we highlighted was the role of social assets to create the potential for crowdfunding to become a funding stream for smaller brewers.

Our conclusions were that – at that time – very few of the many participants in the sector were doing a good job of it and that, as such, it was something of a missed opportunity.

Of course Brewdog continue to demonstrate the art of the possible and as they close in on the £4 million target of their third and most recent equity crowdfunding round it caused me to reflect on other recent crowdfunding success stories in the brewing sector.

In the UK it’s fair to say that Crowdcube are the platform with much of the success. One of the more recently completed funding rounds, in May of this year, was Quantock Brewery. This is a relatively small 8 barrel family run brewery who aimed to trade 40% of their equity for £100,000. As it turns out the demand led to their eventually choosing to trade some 48% of equity in return for £120,000 from 130 investors. The equity on sale was A Share only. Also they were EIS eligible – which is pretty much the case for all equity crowdfunding rounds at present.

Even more recently – in fact in this month – the Hop Stuff Brewery, a startup looking for funding to build a 10 barrel plant, managed to raise £58,000 from the sale of 35% equity consisting of both A and B shares from 70 backers.

To complete the set, just over a year ago the Brupond Brewery – again a start up and this time a quirky vegan brewery with crowdsourcing in its DNA – raised £35,000 of for 25% of their A share equity. This tiny set up were SEIS eligible as well.

If we look a bit further afield we come across Cerveza Guayacan brewery in northern Chile which raised some $135,000 on the Broota equity platform (a curiously apposite platform name for a brewery funding round). This came from 48 investors and an average investment of $2,600

Reward based success stories are harder to find, not least because most platforms prevent beer, or any alcohol for that matter, being offered as a reward. But, the more creative can succeed too and the Grapevine Brewery in Texas managed to generate $61,923 from 201 backers for their startup brewery. Their project ran on the US based platform Fundable, and consisted of 9 reward categories, of which the $250 value reward was the most popular. One factor that may well have contributed to their success is a commitment to sink 5% of their quarterly profits back into the local community which would undoubtedly have harnessed the power of Locavesting, as Amy Cortese would have it.

To meet this growing demand we are also beginning to see specialist platforms emerge that deal specifically with this sector. For example there is Crowdbrewed in the US that is waiting with baited breath for the final enabling of the JOBS act to branch into equity.

A brewery’s crowd based assets have many ways to create value but it is apparent that crowdfunding is increasingly one of them – as we predicted.

The Rise of Crowdfunding

The Rise of Crowdfunding

When a word gets shortlisted for the OED you can be reasonably confident that it is seeing a bit of use. This year the word crowdfunding was shortlisted for the US version of that august publication. Frankly we at twintangibles are not surprised as it is a subject we get asked about more and more.

The proposed definition is Crowdfunding: The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet. At its most basic, that definition gets to the core of it, but what that definition doesn’t get into is a more detailed analysis dealing with the role of social media or concepts like the The Long Tail, and how these are key components in successful crowdfunding. But it does at least capture the aspect that is causing the word to become increasingly popular, and that is that it is about raising money.

At a time when the traditional mechanisms of raising funding to – say – launch a business, start a project, or even make a film, are increasingly tough, then people start looking for alternatives, and crowdfunding is one of them.

Seemingly everyday we hear of new projects (even the Krankies are involved in one!) and new platforms to raise finance via crowdfunding. In the US, it is apparent that the Obama administration have come to recognise that it has merit to potentially drive entrepreneurship and job creation and so plans are progressing to adjust SEC rules to make limited equity-based crowdfunding permissible. Closer to home, Brewdog have announced that their recent second crowdfunding campaign has been almost 100% taken up.

So, with all this in mind we are pleased to be able to announce that we have been asked to curate a series of articles and debates on the subject of crowdfunding for the Social Media Week global blog. Over the next few months we will be covering many aspects of this emerging trend and look forward to some interesting interviews, debates and comments. We will keep you posted as to when the series starts.

In the meantime, if you want to learn more about crowdfunding and how to put together a crowdfunding campaign, then you might want to attend our workshop in Glasgow on the 14th of December.

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