Crowdfunding has been a fascinating new way for businesses and entrepreneurs to gain funding for a little while now. The appeal is obvious, with budding entrepreneurs able to bypass traditional channels and seek investment from potential customers or peers instead.
Kickstarter has been at the forefront of the crowdfunding industry, raising around $340 million in funding for ideas and businesses so far. Thus far however the site has been restricted to people based in America.
That is until this week. In a move that is sure to please the British public, Kickstarter has this week opened its doors to UK entrepreneurs.
Co-founder Yancey Strickler has long hoped to expand his venture internationally, and told the BBC that it he is glad to see this ambition finally reaching fruition.
“The request to expand internationally has long been one of our most requested features,” Mr Strickler, who is the site’s head of community, said.
“We certainly are interested. We’re going to see how the UK launch goes and figure out the next moves from there. There’s a lot of places that will be interesting.”
Since launching the site back in 2009, over 70,000 projects have pitched for funding, with around 30,000 of them receiving funding.
The company has attempted to tighten up its procedures in recent months after fears that many projects were not giving investors the returns they were promised.
This was prompted by some high profile projects going astray, either coming in much latter than predicted, or in some cases not delivering at all.
Whereas traditional investors get a stake in the companies they invest in, those investing via Kickstarter are instead offered a range of perks. Therefore investor confidence in the projects and the individuals they’re backing is paramount.
“I think the key thing is that backers need to be confident that the projects they’re backing will raise enough money to complete the project they’re envisaging,” said Ben Holmes, a partner at London-based venture capital firm Index Ventures.
“What people are getting from Kickstarter is not equity. They’re getting early access, or signed t-shirts and so on.”
One organization very happy with the new move however is the UK government. They are keen to extend financing for companies to channels outside of the traditional ones.
A spokesman for the Department for Business, Innovation and Skills said: “The Government is working with industry to support a range of new ways of lending, and the growth of innovative financing models like crowd funding is an exciting development.”