Pictured: Spark Crowdfunding CEO Chris Burge
Irish crowdfunding platform, Spark Crowdfunding, reports record surge during pandemic
Spark Crowdfunding has reported a record 75% surge in business during the pandemic, as cash-strapped companies turn to the equity crowdfunding platform for financial support.
The Dublin-based company, which connects early stage firms with people keen to invest, saw a record 75% increase in new accounts in the quarter from April to June, compared to the same period last year.
In May, Donegal-based software company Motarme raised €117,000, and in June the Dublin-based aviation start-up, Frequency, raised €378,000 in just 35 days. Both companies are Enterprise Ireland High Potential Start-up companies, and it is expected that the State Agency will match the funds raised on the Spark Crowdfunding platform.
Never in the history of the State has there been a greater need to channel the huge amount of cash that investors have at their disposal into Irish businesses. All of the components are available.
“Retail investors flock to venture companies that come up with strong plans and management teams even during the Coronavirus pandemic, while companies also look more to crowdfunding as they have less contact with institutional investors,” Chris Burge, CEO of Spark Crowdfunding said.
“Our role is to facilitate connections between exciting Irish start-ups and individual investors interested in finding the next Stripe.” The San Francisco-based Stripe was set up by the Collison brothers from Limerick, and famously raised funds back in 2011 at a valuation of €12m. Today the company is reputed to be worth €36 billion.
“We want to give Irish investors access to new investment opportunities that would previously only have been open to venture capitalists or private equity firms. With platforms like ours, investors can invest anything from €100 upwards and support Irish start-ups in the process. With new campaigns coming on stream every month, there are always new investment opportunities for Irish investors.” said Mr Burge.
He would like to see the new Government coming up with more supports and initiatives to make it easier for individuals to support Irish start-ups and early stage businesses. “Never in the history of the State has there been a greater need to channel the huge amount of cash that investors have at their disposal into Irish businesses. All of the components are available. Investors have the funds, companies have the need for growth capital and the platform is available to connect the two. While the EIIS scheme does provide a 40% tax rebate for Irish investors, it hasn’t stimulated the type of activity that is required to support some of the amazing Irish start-ups out there. We have high hopes that Leo Varadkar in his new role as Minister for Enterprise, Trade & Employment will recognise the opportunity here”, said Mr Burge.
Unlike conventional capital-raising methods for early-stage companies, which primarily rely on investments from a small group of professional investors, equity crowdfunding targets a broader group of small to medium-sized investors.
Equity crowdfunding is a method of raising capital predominantly used by start-ups and early-stage companies. Like Dragons’ Den, equity crowdfunding offers shares in the company to a number of potential investors in exchange for financing. Each investor is entitled to a stake in the company proportional to their investment.
Unlike conventional capital-raising methods for early-stage companies, which primarily rely on investments from a small group of professional investors, equity crowdfunding targets a broader group of small to medium-sized investors. The main objective of equity crowdfunding is to raise the required capital by obtaining small contributions from a large number of investors registered on the platform. In the case of Spark Crowdfunding, the average investment amount is less than €2,000, but smaller investors can invest as little as €100 in a company.
Spark Crowdfunding is Ireland’s first equity crowdfunding company. It was founded by Chris Burge in Dublin in June 2018. The company connects start-ups looking to raise funds with investors interested in buying shares in private Irish companies. Investors can invest anything from €100 upwards. To date, the platform has raised in excess of €2.4 million for 14 Irish start-ups.