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Part of Equity crowdfunding platforms for UK startups: a founder's guide
Equity crowdfunding platforms for UK startups: a founder's guide
Compare UK equity crowdfunding platforms for startups, covering FCA rules, investor types, campaign fees, pitch checks and EIS tax relief for founders.
What to take away
- Equity crowdfunding sells shares to the public through an FCA-authorised platform, so your pitch and its risk warnings are regulated.
- Crowdcube and Seedrs, which now trades as Republic Europe, hold most UK deal flow but differ on investor base and share structure.
- Fees are normally a percentage of funds raised plus a completion fee, so compare net proceeds rather than headline rates.
- EIS or SEIS advance assurance makes shares more attractive to UK backers, but only where HMRC approves the company.
How equity crowdfunding is regulated in the UK
Equity crowdfunding is the sale of shares to a large number of investors through an online platform, rather than to one funder.
Who can invest in your pitch?
Does the platform restrict to HNW or sophisticated investors?
Narrower crowd, lower complaint risk
Any retail investor who passes appropriateness test
Platforms offering this to UK retail investors need FCA authorisation, and how the offer is marketed is restricted. The FCA's crowdfunding guidance explains investor categorisation, the cooling-off period and the risk warnings a platform must show.
Because a live pitch counts as a financial promotion, every claim about growth, contracts or forecasts must be fair, clear and not misleading.
Crowdcube and Republic Europe review the pitch, financial model and cap table before launch, and each platform sets its own minimum target, so the same company can face different limits on different platforms.
Some platforms accept only high net worth or sophisticated investors, which narrows the crowd and eases complaint risk. Others open the offer to any retail investor who passes an appropriateness test.
How the main UK platforms differ
The Crowdcube vs Seedrs comparison is really about investor base and shareholding. Both run open campaigns, but they attract different backers and hold shares in different ways, so check whether your shares sit with a nominee or directly on the register.
UK equity crowdfunding platforms compared
Crowdcube
- Investor base
- Large UK retail crowd
- Where it fits
- Consumer brands, community raises
- Check before signing
- Fees, nominee, secondary market
Seedrs (Republic Europe)
- Investor base
- UK and European retail
- Where it fits
- Wider European register
- Check before signing
- Nominee, voting, later round
Angel network or syndicate
- Investor base
- Larger individual cheques
- Where it fits
- Lead investor sets terms
- Check before signing
- Who leads and negotiates
Specialist or sector platform
- Investor base
- Narrow sector-focused pool
- Where it fits
- Sector-specific rounds
- Check before signing
- Sector expertise, terms
Investor demographics decide how a round behaves afterwards. A wide retail base brings brand advocates; a smaller pool of larger cheques brings fewer administrative headaches. Ask for the average cheque size and repeat-investor share on recent raises in your sector.
Expect three figures for your sector from the platform's last two years of raises: the share of live campaigns that reached target, the average cheque size and the average time to close. If that share sits below the platform's all-sector figure, plan a longer private phase. Set your minimum target at about half your headline figure.
The table below sets out what to compare before you sign a platform agreement.
Investor base
- Crowdcube
- Large UK retail crowd
- Seedrs (trades as Republic Europe)
- UK and European retail investors
- Angel network or syndicate platform
- Individuals writing larger cheques
- Ethex (impact shares) and Crowdfunder (community shares)
- A narrower pool of impact and community investors
Where it fits
- Crowdcube
- Consumer brands and community-led raises
- Seedrs (trades as Republic Europe)
- Rounds wanting a wider European register
- Angel network or syndicate platform
- Rounds where a lead investor sets the terms
- Ethex (impact shares) and Crowdfunder (community shares)
- Community share offers and positive-impact raises
Check before signing
- Crowdcube
- Fee schedule, nominee terms, secondary market rules
- Seedrs (trades as Republic Europe)
- Nominee terms, investor voting, treatment in a later round
- Angel network or syndicate platform
- Whether the syndicate leads or follows, and who negotiates
- Ethex (impact shares) and Crowdfunder (community shares)
- Minimum raise, escrow terms, what happens if the target is missed
A five-step route from pitch to completion
- Set the round size and valuation, and decide the dilution you will accept; our comparison of startup valuation methods covers five approaches.
- Prepare the pack the platform asks forpitch deck, video, financial model, cap table and statutory documents.
- Apply to HMRC for advance assurance on EIS or SEIS where qualifying shares would strengthen the offer.
- Open a private phase for your own network, then move to the public page once early commitments are in.
- After completion, register the allotment at Companies House, update the cap table and give investors the paperwork for their relief claims.
Fees, dilution and what the crowd expects
Platforms usually charge a success fee on money raised plus a completion fee. Typical success fees run from 6% to 8% of the amount raised, and a completion fee of around 1% to 2% is typically charged on top.
Some add charges for the private phase or for legal work, so ask for a written schedule covering every scenario, including a raise that closes early or late.
Typical UK equity rounds on the main platforms raise between 150,000 pounds and 1m pounds, with pre-money valuations usually between 1m pounds and 5m pounds and minimum targets often set between 20,000 pounds and 100,000 pounds.
For illustration, a 250,000 pound raise at a 7% success fee and a 1.5% completion fee costs 21,250 pounds, leaving 228,750 pounds before legal and marketing costs.
Dilution is the quieter cost. Every investor takes a share of the company, and a nominee adds a layer between you and the people on your register. Secondary trading on some platforms lets early backers sell, which can move shares to strangers.
Budget for the work around the campaign as well as the fee. Our breakdown of the hidden costs of a fundraise covers legal review, video production and the founder time a live page consumes.
Common questions
Do I need FCA authorisation to run a crowdfunding campaign?
No. The platform holds the permission. Your duty is to ensure the pitch and the company information you publish are accurate and complete.
Can investors claim EIS or SEIS relief on crowdfunded shares?
Yes, if the shares qualify and HMRC has given advance assurance. The application process for the Enterprise Investment Scheme sets out the conditions the company and the shares must meet.
What happens if a campaign misses its target?
Most UK platforms use an all-or-nothing model, so money returns to investors and you receive nothing. Check the terms for the minimum raise and the deadline.
How long does an equity crowdfunding round take?
Campaigns typically run for 30 to 60 days, after a private phase of one to two weeks for your own network. Completion, allotment and the Companies House filing usually take a further two to four weeks.
