EXPERT VIEW
EMMA NOLAN
LIVERPOOL JOHN MOORES UNIVERSITY
Funding is the essential part of any start-up
business or SMEs wanting to grow. Investment
and financial backing is the cliff edge on
which success lies. Here Emma Nolan, IP &
Commercialisation Manager at the Research and
Innovation Services department of Liverpool John
Moores University explains the potential of SMEs
being able to grow through crowdfunding.
What is crowdfunding? This relatively new method of funding
allows anyone – the ‘crowd’, to become an investor. It works
on the principle of a large number of people each investing
small amounts, in order to raise the necessary funds.
Crowdfunding is growing exponentially – and is rapidly
overtaking other sources of seed funding. Crowdcube, for
instance (a crowdfunding website), secured nearly twice
as many UK seed-stage equity deals as its nearest rival
(Scottish co-investment fund) in 2013. It is stepping in to
fill the equity funding gap for early-stage funding for SMEs
and micro companies, left by Venture Capital as they move
further to the later venture stages.
Until now crowdfunding has perhaps been viewed as more
relevant for retail and lifestyle opportunities. However it also
lends itself equally well to high-tech opportunities needing
seed funding to get started.
A recent example is Pulmorphix, the first UK university spinout company to formally raise investment via equity crowd
funding. Pulmorphix secured a TSB SMART award, pitched
to traditional angel networks in order to get interest from
‘anchor angels’ and then launched an investment campaign
via Crowdcube. Pulmorphix was seeking to raise £100,000
in return for 20% equity. They actually raised £125,000 in
around 20 days via Crowdcube.
The Pulmorphix technology is based on research from
Liverpool John Moores University, which developed a