Banks Called Out as Lost Decade of SME Finance.
Crowdcube co-founder Luke Lang, along with Dexion Capital founder Robin Bowie, hit the studios of UK Bloomberg this past week to do a bit of a critique of the banking industry. The first question asked is if crowdfunding would exist if the traditional banking industry did their job correctly. Bowie notes that banks do not have a monopoly (as they shouldn’t) on acting as a financial intermediary. He also calls them out as “stale and protected”. He states that industry participants have gotten very “fat” on the margins and that has brought in competitors. Bowie notes that banking is a regulated market and unregulated markets have an advantage, somehow missing the point that peer to peer lending and crowdfunding were recently regulated by the FCA. Fortunately Luke Lang was there to set the record straight on the regulatory side of things, and also to aptly state that banks have taken their “eye off the ball” leaving a void for competition.
Crowdcube offers both debt and equity via their platform. Luke notes they are talking to other “High Street names” about doing funding raises between £1 and £10 million. He also clarifies that both smaller investors AND larger investors are taking advantage of their services to invest in companies. The largest single investment on Crowdcube is a respectable £3.8 million from a VC; largest single private investment was over £800,000.