Crowdfunding website approved by FSA

By GARETH MACKIE
Published on 05/02/2013 00:00

THE City watchdog has for the first time approved a “crowdfunding” website that allows members of the public to take a direct stake in small unlisted companies.

Now that the Crowdcube site is regulated by the Financial Services Authority (FSA), investors will be protected by the Financial Services Compensation Scheme and will be able to access the Financial Ombudsman Service if they have a complaint. They will have to complete a questionnaire to check they understand the high-risk nature of their investment.

Chief executive Darren Westlake said: “Our authorisation and the additional investor protection it affords will increase satisfaction and confidence.”

Crowdcube has raised £5 million since launching two years ago and has more than 28,000 registered investors.