Perth-based investment group Braveheart has unveiled a fresh partnership as it seeks to capitalise on the trend for crowdfunding by new and growing firms.
The firm said its innovative tie-up with established platform Crowdcube would allow small investors to build up a portfolio of interests in new ventures while benefiting from screening by a professional fund manager.
The new Crowdcube Venture Fund will have a minimum subscription of £2,500, and expects to generate returns through trade sales, IPOs and licensing and revenue deals.
Scotland-focused Braveheart subsidiary Strathtay Ventures, which specialises in private investor and family office clients, will act as fund manager, while Crowdcube will source and secure investment opportunities.
Braveheart CEO Geoffrey Thomson said he was excited to help establish a “new approach to investing”.
“There are a large number of investors who like the crowdfunding concept but who, for one reason or another, find the DIY route problematic,” he said. “We hope they will find this new initiative of interest.”
The fund is targeted towards small-scale, passive investors who are attracted by the idea of funding growth companies but lack the time and experience to manage their own stakes. Investors will be accepted into the fund on a case-by-case basis and will be able to subscribe, or top up, during the initial two-year investment period.
To be eligible for the scheme, companies must raise at least 33% of the total they are seeking through Exeter-based Crowdcube.
Founded in 2010, the web-based cash-for-equity platform now has more than 57,000 “everyday” investors and has raised more £17 million for 90 UK businesses.
It allows start-up, early-stage and growing concerns to bypass the traditional business angel, venture capital or bank routes, giving them more control and access to more investors.
CEO and co-founder Darren Westlake said the new approach offered a “tailored solution” to potential new investors.
“It makes sense for us to partner with Braveheart, which is an established, quoted fund manager with a strong track record,” he said.
“Many investors are attracted to the idea of crowdfunding but lack the time to fully research opportunities and monitor the progress of a diversified portfolio.”
Businesses to benefit from Crowdcube’s existing offer include Glasgow onshore legal process outsourcing firm NewGalexy, which raised more than double its £100,000 target from 128 investors.