Equity crowdfunding is a simple, low cost way for entrepreneurs and companies to raise money from a wide pool of investors to fund their new ventures.
A company posts its Project on the crowdfunding website and specifies how much money it is looking to raise and for what percentage of the company. Think of it as an online Dragons’ Den.
Investors are invited to subscribe for shares in the company and can contribute anything from €100 to €1 million. So, let’s say Acme Enterprises was looking to raise €1m in return for 40% of the equity in their company. If someone invested €500,000 they would get 20% of the company and if someone invested €250,000 they would get 10% of the company. Therefore, if someone invested €25,000 they would get 1% of the company.
As an investor, simply register as a member, answer our suitability questionnaire and then view the live campaigns that we have on our site. If you see a campaign into which you’d like to invest, simply press the “invest now” button and input the amount you feel you’d like to invest into the business. At this point the investment is just a pledge, no money will be taken from you until the campaign reaches its target amount. When the campaign does reach the target amount and the campaign closes Spark will contact you again to see if you are still happy to invest. If you are still happy, Spark will ask for the investment money from you. The legal process will then be activated and a small while later you will be formally notified of your investment. You will then be an investor in the business.
Put simply, equity crowdfunding is a way for companies to raise money from a wide range of small to medium sized investors.