AltFi Publishes Report on UK Crowdfunded Companies: “Where They Are Now 2016”

uk-london-flag-britainIn their second installmant of “Where They Are Now?”, alternative finance research firm AltFi has published an update on the status of crowdfunded companies since 2011.

According to AltFi’s report;

“A high proportion of crowdfunded companies remain active – 73.60% of the capital raised in the 2011, 2012 and 2013 cohorts are still trading. i.e. even in the older cohorts the survival rate remains high.”

Taking a portfolio perspective, AltFi estimates a total IRR of 8.55%. When you take into consideration EIS/SEIS programs, significant tax benefits for investors in SMEs, the IRR jumps to over 19%.

AltFi reviewed the top platforms in the UK including: Crowdcube, Seedrs, SyndicateRoom, AngelsDen, Code Investing and Venture Founders. These investment platforms dominated this sector of finance. AltFi used a color coded system to highlight the status of crowdfunded firms. The 6 categories included: Exit, Green Plus (up round), Green, Green Minus (down round), Amber (uncertain) and Red (shut down). Out of 751 companies that have raised capital since 2011, the results are as follows:

  • Red – 88
  • Amber – 79
  • 34 – Green Minus
  • 533 – Green
  • 216 – Green Plus
  • 5 – Exits

The report by AltFi is a needed review of industry success. While still young, it is important for industry participants to provide transparent data including failure rates.  In a release today, Crowdcube co-founder Luke Lang called on the industry to band together and set a common metric of platform and issuer performance – an important step for the industry to mature and grow.

The report is available for download here.

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