News Briefing - Crowdfunding, SME And Alternative Finance

crowd children

1. UK - P2P / IFISA

IFISA providers have called on the taxman to created a simplified HMRC submissions process for firms that need HMRC approval but only want to offer an Innovative Finance ISA (IFISA) and not Cash ISAs or stock shares ISAs.

Critics are saying that the submissions process has been adapted rather than designed, and is not fit for purpose. Tony Alner of EasyMoney told Peer2Peer Finance News:

“The submissions forms are really customised for stocks and shares and cash ISAs, while IFISAs are gradually being incorporated,” s chief operating officer, who has previously designed several IFISAs for other providers.

“Some of the information isn’t applicable, most IFISA providers will not be making claims for tax relief and won’t be paying interest on  cash on deposit.”

Read the full story on Peer2Peer Finance News

2. UK - EIS

The Enterprise Investment Scheme Association (EISA) has published a profile of four technology firms it considers exemplary in their use of EIS.

As an industry body dedicated to championing  tax incentivised schemes for early-stage investment, the EISA aims to highlight companies who have benefitted from the schemes  "from startups at the seed stage all the way through to firms who have successfully navigated their business to a listing, exit or institutional funding rounds. Our goal is to both champion those small businesses and also to demonstrate the immense power of S/EIS in driving the British entrepreneurship so crucial to the country’s economic growth."

The firms chosen are using technology to create innovative products in a variety of niches from semiconductors to dog, "are generating significant value for their investors." 

Read the original story on the EISA website.

 

3. UK - SME Finance

Yesterday's Sunday Telegraph carries another article on a familiar topic: why are the UK's small businesses struggling to grow? The article takes its data from a study by the British Business Bank,  which conducted five hundred interviews with directors of small and medium-sized enterprises in England.

The findings are a little more nuanced than the oft-repeated statement that 'they don't what's out there.' Graeme Fisher, the managing director of the Government’s economic development bank, told the Telegraph:  “Many small business owners find it hard to identify or are simply unaware of the right type of finance to help realise their growth plans. It’s fair to say that the financial landscape can be complex, daunting and hard to understand.” (Emphasis added by Another Crowd.)

The survey reports that 27 per cent of smaller firms that did not get the finance that they wanted decided to cancel their growth plans. This the paper says, "is not [an image] that chimes with the aspirations of government."

Read the entire article on The Telegraph website

4. UK - P2P Lending

 

RateSetter spent the weekend celebrating its eighth birthday, according to Peer2Peer Finance News.

The peer-to-peer lending platform has originated more than £2.7bn in loans since it launched in 2010, and is considered one of the country's 'Big Three' alternative lenders..

It has sattracted more than half a million customers in eight years, and generated more than £110m in returns for investors. It's IFISA product  attracted £100m in subscriptions in its firstt four months. The platform is set to break even in the first half of 2019.

Full details of RateSetter's eight glorious years on Peer2Peer Finance News.

5. International - Fintech

In the last month, lawmakers in both the UK and the EU have made statements about the regulation of virtual currencies, The legal intelligence platform JD Supra points out that comments and recommendations made in speeches "are not legally binding, and are some distance from becoming so, they can provide an indication of where lawmakers may be heading."

This apparently, makes Supra's analysts optimistic. Two recent reports, one from the UK Treasury Committee, and one from the EU Parliament's All-party Innovation Group, are considered and compared.

For detailed commentary on the recent regulatory developments, read the JD Supra website

6. US - Equity / Fintech

Seedinvest, one of the USA's best known equity crowdfunding platforms, has been acquired by Circle, in a move that seems to have taken the industry by surprise. Circle Exchange is a Boston-based fintech noted for its payments technology and cryptocurrency offerings.

The purchasing company posted on ïts blog: "This acquisition will accelerate our strategy of delivering a token marketplace that enables businesses and individuals to raise capital and interact with investors using open crypto rails and infrastructure. This acquisition and planned new offerings are subject to FINRA approval." 

SeedInvest screens and vets deals, which allows startups to take advantage of the JOBS Act exemption permitting General Solicitation. The platform also has a partnership with Angel Investing website Gust.

Circle is noted in the fintech sector for having the backing of Goldman Sachs.

You can read different takes on this story on BlockTribune, FinExtra, and Crowdfund Insider.

7. US - Equity

Business Insider reports that US startup investing, and Silicon Valley in particular, has a diversity problem, and it may be worse than previously realised. Bullet points from the story:

  • Women, African-Americans, and Latinos are underrepresented in the tech industry and tend to be paid less than their white male counterparts.
  • But the diversity problem is even worse than that; a new study found that the gender disparity in equity — or stock ownership — held by tech workers and founders is even worse than the pay gap.
  • In Silicon Valley, stock holdings can be much more important and valuable than salaries.
  • The disparity is important, because Silicon Valley's ecosystem centers around startup founders who cash in their shares when their companies go public or are acquired.

The research was inspired by this blog post by a female angel investor, and was conducted by Carta, a firm that promotes employee share-ownership and offers services to help companies operate share-ownership schemes.

Business Insider carries a full-length article on this topic.

The original research: ''The Gap Table: Analyzing the gender gap in equity' is on the Carta website.