Crowdfunding remains an effective way of raising money to grow your business.
And this looks set to continue as new EU Directive rules, which came into force in June 2017, means that up to €8 million can now be raised on crowdfunding platforms – up from €5 million.
Boutique hotel firm Mr & Mrs Smith recently showed that such heights can be reached as it raised £5.9 million (€6.6 million) via crowdfunding this year.
But with companies now able to raise more than ever the importance of platform fees now matter more than ever.
Here, we look at the three major providers in the UK – Crowdcube, Seedrs and SyndicateRoom – and analyse how much they charge companies to use their platform.
It’s important to know that these platforms do differ, the main difference is that SyndicateRoom aims to connect high-net worth investors to companies while Crowdcube and Seedrs are more suited to retail investors.
Further reading on crowdfunding
Crowdfunding platform fees
|Listing/set-up fee||0||0||£2,000 (only applies once Engagement letter has been signed)|
|Success fee||7 per cent (excl VAT)||6 per cent||0|
|Completion fee||0.75-1.25 per cent (average)||£2,500 (excl VAT)||4 per cent|
|Payment processing fee||0.47 per cent for UK debit cards|
2.9 per cent for non-EU debit cards
|0.5 per cent||0.5 per cent|
|Annual fee||0||0||1 per cent (payable for three years)|
|Follow-on fee||0||0||4 per cent|