“Lots of people are surprised when we say we are based in Exeter but as we’re a web based company, it doesn’t really matter. We just invite them down to see us!”
Luke Land & Darren Westlake – Founders, Crowdcube
When Luke Lang and Darren Westlake set up Crowdcube in February 2011, they didn’t think they would appear on BBC Television, the CNN network and be meeting government officials at Number 10. The remarkable success of the equity investment business seems to have taken not only the UK but the world by storm since its creation in February 2011.
Crowdfunding emerged in the US where rewards-based crowdfunding websites like Kickstarter help people raise money for creative projects and ideas by getting small donations from a large number of people. Both Darren and Luke already had experience of starting small businesses and knew all too well the difficulties of getting business funding. They felt that the existing crowdfunding model could be adapted to revolutionise business finance for start-ups and early stage businesses.
As Luke explains, “Traditionally you might approach one or two wealthy individuals or say a business angel with the idea of getting £100K, but we thought there must be a better solution. Instead of having one person invest £100K, why not ask 100 people for £1000? Now that would be very powerful model.”
The average investor invests around £2,400 and can spread investments into several businesses. Luke continues; “The harsh reality is that some of these businesses won’t make it but by building a portfolio of say 10 businesses, the chances of getting a good return are improved.”
Crowdfunding is taking the elitism out of what used to be the preserve of the very wealthy and, with interest from as far afield as Australia, Brazil and America. Back in Exeter, Luke who lives in the City, is happy to stay at their offices in the Innovation Centre overlooking the Exe Estuary. Although he and Darren have to travel to London fairly often, Luke says the train connections are good as are the local airports.