New Funding Scheme For StartUps
Posted on 13th February 2013
A new online equity fundraising platform called FundTheGap was launched last week, with the aim of connecting start-ups and small businesses with experienced investors.
FundTheGap aims to help entrepreneurs raise up to £2 million in start-up or growth capital for their business by meeting the management teams of the firms looking for investment, and enabling eligible firms to pitch on the platform. FundTheGap then provides a co-investment of between £500 and £50,000.
Entrepreneurs can raise funds from qualified investors including friends and family, the local community, business angels and professional investors nationwide.
In order to apply for investment, firms must be incorporated in the United Kingdom as a Limited Company and all directors must be 18 years or older, with at least one director having to be a UK resident.
Investors are similarly vetted by the firm, which makes them fill in a questionnaire to show an understanding of the risk of investing in a start-up or else prove that they are a high net worth individual or a sophisticated investor.
Through FundTheGap investors are able to invest in a specific sector, support a local business, or back someone that they know and potentially benefit from tax reliefs and investor rewards along the way.
The platform also hopes to facilitate continued communication between the companies and the investors after the deal, providing a dashboard through which they can provide details of their progress.
The timing of the launch is good, as figures last week showed that lending to small and medium-sized enterprises fell by £7.8bn in the last 18 months and yet more and more people are starting out in business on their own and need access to funds.