Funding is crucial for any start-up. At our last Bootlaw event we welcomed Adam Blair from Funding Circle who provided an excellent insight into the growing fintech sector.  After some discussion on the night about the Financial Conduct Authority's regulations for peer to peer lending, which came into effect from 1 April 2014, it was interesting to hear the following day, the FCA's chief executive Martin Wheatley launch the regulator's Project Innovate, which underlines the regulator's commitment to supporting new tech initiatives in financial services.

Congratulations to Funding Circle on being nominated for the Europas' award Best FinTech Startup.

Crowdfunding is another increasingly popular and successful way for start-ups to raise capital.  Over the last couple of weeks there have been some remarkable success stories:

  • Protonet, which provides secure servers in the cloud for SMEs, broke crowdfunding records by raising $1 million in just 89 minutes ($200 per second!) on German funding platform Seedmatch.  The start-up's success in part has been attributed to businesses and consumers increasing security concerns post Edward Snowden's revelations about NSA and GCHQ.
  • Storage company LOVESPACE raised £1.6 million using British based crowdfunder Crowdcube through a combination of crowdfunding and major venture capital.  Crowdcube co-founder Luke Lang commented on how VCs and other institutional ventures investing besides the crowd "reinforces the fact that crowdfunding is now a seriously credible and viable funding platform".

Hundreds of crowdfunding sites are coming online each week and it is estimated that more than $60,000 is being invested each hour. This rapid growth has created a start-up market of its own as entrepreneurs look to maximise the opportunities created by so many crowdfunding sites and the masses of data produced.  Emily Mackay, founder of Crowdsurfer is one.  An article on Ozy describes Crowdsurfer as a "global Bloomberg-like data aggregator for crowdfunding and peer-to-peer finance".

Tech City News last week featured Development Capital Group, the Silicon Valley tech accelerator that offers an alternative funding method.  DCG has its shares admitted to public trading, which can be picked up for as little as $1.  The idea is that collectively or individually the pool of companies within the accelerator will become the next big thing.

Trending - The Internet of Things

The use of connective devices by both consumers and industry is gathering pace. At its recent WWDC Apple announced how it plans to allow users to control connected devices in the home via their iPhone or iPad.  Start-ups are equally increasing their involvement in this area.  Forbes has highlighted CB Insights' results that start-ups involved with IoT in the US attracted over $1 billion in venture capital last year.  Within the 5 start-ups which John Lewis' incubator has chosen to work with there is a strong IoT focus, another indication of how this area is growing, particularly given the retailers successful integration of tech across its business.

Collaboration with corporates

While for some start-ups it remains their objective to be sold within a short time of setting up, start-ups in Berlin are demonstrating that they can work with large corporations.  For example, German railway company, Deutsche Bahn is choosing to work with start-ups who can offer greater short term flexibility compared to more established companies.

Join us at our next event: All About Share Options, Wednesday 26 June 2014

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