COMPANIES are increasingly turning to crowdfunding as an equity source to grow their businesses, but uptake in Scotland has been behind the curve with better awareness required, according to researchers at the University of St Andrews and the University of Stirling.
Their study published yesterday found that in the UK – the world’s fastest-growing equity crowdfunding market – companies have already raised £146 million this year, up from £91m in 2014.
It also found from the 42 British companies surveyed that the average amount raised was £408,000, issuing on average 19 per cent equity for the investment to 164 new shareholders.
The scale of this type of funding therefore means it should be considered disruptive rather than alternative, according to researchers, who reported that its advantages over conventional capital sources include speed, media exposure and investor engagement.
Scotland attracted only about 4 per cent of the UK total for equity crowdfunding, around half the level expected. That said, there have been some success stories like Aberdeen-based craft beer firm Brewdog raising £7m in three crowdfunding rounds.
Ross Brown from the Centre for Responsible Banking & Finance at the University of St Andrews said the lack of crowdfunding uptake in Scotland may be due to SMEs lacking awareness.
Co-author Suzanne Mawson from the University of Stirling added that Scottish firms “may be missing out on important opportunities to help grow their new ventures”.
She said: “There may be scope for policy makers in Scotland, such as Scottish Enterprise, to consider signposting firms towards this important source of growth finance.”