Crowdcube, a leading online investing platform in the UK, recently provided an update on its Nominee Structure, which assists capital formation on the platform. At the same time, Crowdcube declared that “the line between public and private markets is disappearing, and with it, value creation is shifting earlier in a company’s life.” Crowdcube is not wrong.
According to their data, their Nominee structure now holds £1.3 billion in securities across 979 companies. Approximately 450,000 investors hold shares in the Nominee. Crowdcube states that investors in over 100 countries have participated in their offerings.
Crowdcube reports that the value of these securities has grown at 40% per year since 2018 and beats European venture capital markets, which are growing at 29%.
The Nominee Structure simplifies share management, making the sale of smaller shares more palatable for companies seeking growth capital. Many shareholders become a single line in a cap table. Shares can still be traded. Crowdcube reports that over £210 million has been returned to investors since its inception.
While many of the companies held in the nominee started at an early stage, Crowdcube is adding more mature firms to its platform, thus expanding access to private securities for retail investors.
Of course, all securities hold risk, and smaller, younger firms tend to be riskier. But it is the investor’s responsibility to do their own due diligence and determine which offering is best for them. Crowdcube is expanding access to an important asset class, and expectations are that private markets will grow as the tech improves access to capital and opportunity.
