This article was written for The London Economic, Published Online 03/02/15
Equity crowdfunding is experiencing a boom in publicity and popularity, but investors and startups alike must be aware of the risks when equity is involved.
Prominent advertising by the likes of CrowdCube in recent months is a clear sign that crowdfunding has moved beyond being an advance payment for consumer products and become a mainstream investment model. But for all the hype, crowdfunding is not new. As long ago as 1997, an internet campaign raised $60,000 to fund British rock band Marillion’s US tour – and in 2001 the band pre-empted the Kickstarter/ Indiegogo model by asking fans to pay in advance for an album so that they could afford to record it.