Crowdcube has launched a new fund to allow investors to quickly and easily diversify their holdings across multiple crowdfunded securities. The Crowdcube EIS Fund is seeking a raise of £500,000 and will be managed by a professional fund manager. The minimum investment for individuals is £2000.
The Crowdcube fund is pitched as a way to easily create a diversified portfolio investing in British businesses. The EIS or Enterprise Investment Scheme indicates the investment will be able to take advantage of some significant tax breaks that mitigates risk. Crowdcube assures that each company in the fund will be vetted:
“Our legal, financial and investments team check the pitches on Crowdcube to ensure every one is fair, clear and not misleading.”
As everyone knows, investing in early stage, growth companies is risky. Many of these small companies will fail or simply not perform. A diversified portfolio is the best method to capture gains of the successful companies thus offsetting the ones that don’t do quite so well.
The launch of the new EIS Fund comes at a time when there is a discussion in the UK as to whether or not small investors should be allowed to invest in companies for as little as £10. Some industry participants believe that a minimum bar of £1000 should be set as a form of “investor protection”.
Crowdcube is the largest investment crowdfunding platform in the UK having raised over over £115 million for more than 300 businesses.
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