In the real estate world, the term “golden brick” refers to the first level of bricks above ground and is typically discussed because of the tax implications: developers can avoid VAT on a land sale with a “golden brick” transaction, where it’s obvious that a building is under construction.
In the peer-to-peer real estate world, the term “golden brick” has emerged as a nice bit of spin for property market pain. Here’s Property Partner, a crowdfunding site for housing equity, encouraging its customers to keep buying last week: Read more
An odd thing is happening in the world of crowdfunding. Their sites keep crashing, but only when startup mobile-only challenger banks are hanging around.
It started with Mondo, which in February raised £1m from Crowdcube and in the process managed to crash the website. What sort of web server-stopping traffic did the site receive? “The Passion Capital backed mobile bank received unprecedented interest for its crowdfunding campaign from more than 8,500 people,” according to Crowdcube’s blog. Business Insider reported at the time that the “total number of people notified” directly about the round was 44,000 — talk about breaking the internet. Read more
Investors who had been swindled out of their money by some dodgy financial advisor used to be able to call up Rebus Group, a claims management company established in 2010 and led by Adrian Cox, the former European CEO of Ask Jeeves. Read more
Andy Murray, the third best tennis player in the world, who is 28 years old:
I’ve always been interested in investment, and being able to get involved in an innovative way to help support British startups really appealed to me.
A warm welcome to the newest advisory board member for Seedrs, the crowdfunding site dedicated to connecting small investors with risky businesses. Read more
Fans of buzzy peer finance and sourcing money from crowds should read a great piece in the FT about Crowdcube, an equity funding site, by Murad Ahmed.
We’ve looked at individual opportunities for crowds to lose money, but this considers more structural problems for small investors tempted to bet on tiny, risky companies in return for a precarious stake in a start-up.
All crowdfunding groups make it clear to investors that they are likely to lose money as the vast majority of start-ups will fail. But the UK’s Financial Conduct Authority recently rebuked the five-year-old industry, saying that many groups give a “misleading or unrealistically optimistic impression of the investment”.
We have featured the Burrito Bond and some Kentish crowfunding before, focusing mainly on the terms offered at the buzzy modern end of finance. The implicit question has been who (on earth) is buying this stuff?
It has nagged at James Tomlins of M&G Investments as well so, in an attempt to suggest an answer, he has built a profile of the quintessential “mini-bond” investor.
Location – London – the food selection on offer (Taylor St Baristas, Chilango and Leon) is only of any practical use to someone who lives and works in London and can access the relevant branches on a regular basis. Until such time as these chains expand outside the capital, our quintessential mini bond buyer is almost certainly a Londoner.
One day we will cease to be amazed by the wonderful new world of crowdfunding, but that day has not yet arrived.
In the FT on Wednesday is a story about crowdfunding debt finance for, among others, a restaurant chain. More on that in a second, but let’s enjoy the quote from James Tomlins, a high-yield bond portfolio manager at M&G: Read more
So you like the idea of a buy-to-let property empire but don’t have the cash, time, or expertise?
Fear not, because with the liberal application of crowdsauce, you too could become a landlord with as little as £500. And you’ll get a 5 per cent annual return from day one…
Come with us to the Northeast, where the bleeding edge of crowdfunding is to be found: Read more
The UK Financial Conduct Authority has published its long awaited rules for crowdfunders and peer-to-peer lenders. You can read the full policy statement here, but lets cut straight to some frothy outrage from Barry James, founder of the Crowdfunding Center.
On a day like today one has to wonder whether our FCA is the worst regulator in the western world. The words that spring first to mind are inflexible, stubborn and unimaginative. Maybe it’s time for a change.
FT Alphaville’s series on the rise of the collaborative economy has so far looked at a new type of growth, how peer-to-peer lending is a return to full-reserve banking, and the link between social networks and evolutionary game theory.
In the latter post we considered the value of reciprocity and collaboration, and whether what appears to be altruistic content generation really is self-serving after all?
But what about the rise of completely altruistic models like crowdfunding websites? Read more