Shadow Foundr is a crowdfunding platform with a bit of a twist. Proposals are vetted first and then shared with their internal network of angel investors before any crowdfunding takes place. If these “real life dragons” are willing to commit 30% of the funding target, Shadow Foundr hosts the campaign and opens it up to the crowdfunding masses.
Shadow Foundr says this discerning approach is paying off for a growing roster of UK early-stage and small to medium-sized enterprises (SMEs). In the past two years, over £16 million has been raised. The platform cites the recent example of TV and video advertising tech firm Honeycomb that raised over its £300,000 through 19 investors.
Shadow Foundr’s chief operating officer Jason Kluver explains their mission;
“With a focus on investor-needs first and foremost, Shadow Foundr seeks to deliver healthy returns to investors by consistently attracting highly scalable and disruptive global businesses, with vast growth potential. We understand crowdfunding is an exciting concept but we also understand the importance of putting the investors’ interests and compliance at the core of the activity. Once these commitments are in place, our platform allows everyday investors to invest directly into these pre-vetted, early-stage companies and small to medium-sized enterprises.“
Collectively, the team at Shadow Foundr has reportedly raised in excess of £80 million in equity funding from their networks of business angels and investors over a period of seven years.
Extensive due diligence is said to be carried out by the team, valuations and entrepreneurs are questioned in depth and the validity of opportunities is scrutinised before they seek firm commitments to fund a significant proportion of a target amount through their investor network. Shadow Foundr says their ability to call on this established network of business angels and other professional investors, including family offices, venture capital and other authorised financial institutions, should provide comfort for crowd investors.
A current crowdfunding campaign example is for a Brighton business, LIfT BioSciences, which is said to be building the world’s first cell bank of cancer-killing white blood cells. The company was started by Alex Blyth after he lost his mother to pancreatic cancer – the first disease being targeted by LIfT Bio. Eighteen investors have pledged more than £155,000 already, with the company aiming for a target of £250,000 by late January.
The crowdfunding industry is more mature in the UK than anywhere else in Europe. Banks and VC funds are taking notice of the competition – and the sector itself is alert to calls for greater transparency.
Shadow Foundr has FCA authorisation but adds it is prepared for the tougher regulatory framework known as MIFID II, which comes into force in January.
“The future has a great deal of promise for the UK crowdfunding industry if it continues to grow while retaining its ability to be distinctive and addressing areas that the market has historically underserved,” adds Kluver.
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