Crowdcube, the first crowdfunding website to offer investors equity in small businesses, has enabled Fairtrade bodycare company Bubble & Balm to raise £75,000 of growth capital.
The crowdfunding platform, which launched last year, makes access to finance easier for small firms looking to grow their businesses, enabling them to connect with “a nation” of small investors - instead of one or two high net worth individuals to find funding.
Crowdcube founder Darren Westlake said that the investment raised by Bubble & Balm marks a “significant moment in the history of small business finance in Britain”.
“In the current climate with banks being risk averse, we are thrilled that Bubble & Balm has succeeded in getting vital growth investment.”
Bubble & Balm gained the growth finance through Crowdcube in return for 15% equity in the business. In total 82 investors each contributed between £10 and £7,500 to meet the funding target.
The company plans to use the investment to expand its product range, increase marketing activity and to meet increasing demand from retailers such as Waitrose, Oxfam, Planet Organic and a growing number of independent retailers.
Sue Acton, founder of Warwickshire based Bubble & Balm, said that she was attracted to Crowdcube’s financing initiative as an alternative to seeking more traditional investors as the model fitted well with the company’s image of working as a community.
She said: “I'm very much looking forward to working with all our investors as we take Bubble & Balm to the next level.
“Some of our new shareholders have already offered their skills as well as their cash to support our growth, and this is another huge benefit of crowdfunding - not only do we now have the investment we need to deliver against our plans, we also have a diverse team of supporters (and customers!) too.”
Westlake added: “This is just the start. Many entrepreneurs on Crowdcube are on the verge of achieving their funding targets using our crowdfunding model. I firmly believe that Crowdcube is the future of business finance in Britain.”
There is no cost for entrepreneurs to sign up to Crowdcube, although the platform receives a 5% success fee. If the target funds are not met, investors get their money back and no success fee is charged to the entrepreneur.
Start-up ventures can register their business idea or company at: www.crowdcube.com.