Exeter-based Crowdcube – the first crowdfunding website in the world to connect small businesses with potential equity investors – has successfully helped Fairtrade bodycare business Bubble & Balm raise £75,000 of growth capital. Bubble & Balm is the first British business to raise finance using the equity based crowdfunding model launched by Crowdcube earlier this year.
Bubble & Balm, based in Warwickshire, sought £75,000 of growth finance through the Crowdcube web-based crowdfunding platform in return for 15 per cent equity in the business. Eighty-two investors each contributed between £10 and £7,500 to meet the funding target. The Fairtrade bodycare business required investment to expand its award-winning product range, increase marketing activity and to meet increasing demand from retailers such as Waitrose, Oxfam, Planet Organic and a growing number of independents.
Crowdcube, which was founded by Exeter businessmen Darren Westlake and Luke Lang, with the legal support of Ashfords LLP – which researched and validated the financial model for equity based crowdfunding – makes access to finance easier for entrepreneurs of newly formed and growing small businesses. Instead of competing for limited business angel or venture capital funding, businesses can use Crowdcube as a platform to connect with a nation of small investors, ‘armchair dragons’, instead of one or two high net worth individuals to find investment.
Former city banker, Sue Acton, founder of Bubble & Balm, said: “I am absolutely delighted we have achieved our target. Raising finance is incredibly tough for any small business – Bubble & Balm included – and I was really excited when I first heard about Crowdcube. The idea of pitching our business to a wide range of people, ranging from armchair dragons looking to invest £10 through to more traditional investors with thousands to invest, was really appealing. As well increasing our chances of raising the funds, I also liked the fact that the Crowdcube model fits really well with what Bubble & Balm is all about – working directly and fairly with communities and all our partners to achieve a shared success.
“I’m very much looking forward to working with all our investors as we take Bubble & Balm to the next level. Some of our new shareholders have already offered their skills as well as their cash to support our growth, and this is another huge benefit of crowdfunding – not only do we now have the investment we need to deliver against our plans, we also have a diverse team of supporters (and customers!) too.”
Darren Westlake, co-founder and Managing Director of Crowdcube said: “This is a significant moment in the history of small business finance in Britain. In the current climate with banks being risk averse, we are thrilled that Bubble & Balm has succeeded in getting vital growth investment. This is just the start. Many entrepreneurs on Crowdcube are on the verge of achieving their funding targets using our crowdfunding model. I firmly believe that Crowdcube is the future of business finance in Britain.”
David Heard, a Partner at Ashfords LLP, who helped the entrepreneurs work on the business model for the site, said: “We are delighted to hear that Bubble & Balm have had such success reaching their funding target thanks to investors on Crowdcube. When I was asked to provide advice on the legal framework underpinning Crowdcube, I thought it sounded like a very exciting venture and it is great to see that all the hard work in setting it up has started to pay off. Crowdfunding is an excellent alternative way for small businesses to get investment at a time when banks are being cautious about lending.”