Equity crowdfunding is fast becoming the most popular way for Irish start-ups to raise new funds in return for selling shares in their company.
The advantages of this "Dragons' Den" type of fundraising include speed, ease of process and cost. Campaigns typically last 30-40 days, which contrasts with other types of early stage investing which can take up to nine months. The process is relatively easy, once the company has passed the due diligence requirements of running a campaign in the first place.
The costs are also very low as Spark Crowdfunding covers the legal and due diligence costs, meaning the company raising funds only pays the 6% fee on the total amount of funds raised. (Campaigns must achieve their full target in order to complete and no fees are charged if the campaign is not a success.)
But why should an Irish company use the Spark Crowdfunding platform to raise funds, as opposed to going to one of the UK or US crowdfunding platforms?
REASON 1 - Spark has the largest database of Irish Investors
We may not have the largest database of investors, but we definitely have the largest database of Irishinvestors. It stands to reason that Irish investors are likely to be more favourably disposed to investing in Irish companies. Meeting potential investors face-to-face is an important element of crowdfunding campaigns. Irish companies will not need to fly to the UK to meet potential investors.
REASON 2 - Spark doesn't require companies to have a minimum amount of investment committed
Many of the UK crowdfunding platforms require companies looking to raise funds to have a minimum amount of funding already raised prior to the campaign going live. In some cases, this can be as high as 40%, so if you're looking to raise €100,000, you will need to be able to demonstrate that you already have commitments of €40,000. Spark does not have this requirement, although we do recommend you have at least some commitment in order to generate early momentum for your campaign.
REASON 3 - Spark has local knowledge of the EIIS 'Tax Refund' Scheme for Irish Investors
For Irish taxpayers, the Employment and Investment Incentive Scheme (EIIS) allows individual investors to obtain income tax relief on investments made, in each tax year, into EII certified qualifying companies. It is an extremely attractive scheme for Irish taxpayers, who can reclaim 40% of the amount of their investment - 30% in year 1 and 10% in year 4. Therefore, if an Irish investor invests €1,000 in a EIIS qualifying company, the investor receives a tax rebate of €300 in the first year and €100 in the fourth year. The investment would need to fall by more than 40% before the investor would lose any money. We discuss this in a previous blog post.
REASON 4 - Spark has strong connections with Irish Media Channels
A key contributor to the success of an equity crowdfunding campaign is the amount of media exposure that can be generated for the campaign. If you speak to companies that have raised money on Spark, they will confirm that we have been able to assist them with media exposure. Good media exposure for campaigns is also good media exposure for Spark, so we have every incentive to assist Irish companies to maximise their media exposure.
REASON 5 - Spark uses Irish Solicitors
When a campaign finishes, the last thing an Irish company wants to be doing is engaging with a UK firm of solicitors. Spark is advised by Beauchamps, one of the leading law firms in Ireland. We also cover the cost of the legal fees, a significant saving over other forms of fundraising where legal fees can be particularly onerous.
REASON 6 - Spark assists with Digital Marketing and Social Media campaign promotion
A number of team at Spark are highly experienced and highly qualified (to Masters level) in the areas of digital marketing and social media marketing. We are very happy to share this expertise with companies looking to promote their equity crowdfunding campaigns using these new channels.
REASON 7 - WE'RE IRISH!!!
Spark Crowdfunding is an Irish company, located two minutes walk from Grafton Street on the fashionable South William Street. We are the first and only equity crowdfunding platform in Ireland. We want to assist ambitious Irish entrepreneurs and in turn hope these Irish entrepreneurs will, all else being equal, 'buy Irish'.
So, if you are a high growth Irish company, whether that's a start-up or a long-established business, and you're looking for a highly efficient way to raise new funds, come and talk to us at Spark Crowdfunding.
We're with you every step of the way!