We are Crowdfunding

What is crowdfunding? A short guide to everything you need to know.

CATEGORIES
August 27, 2021
AUTHOR:
Emily Owen

It’s been all go over in fettle HQ recently, as we prepped behind the scenes for our first ever crowdfund! The eagle eyed amongst you may have spotted yesterday’s announcement, but for those who didn’t…. WE’RE FUNDRAISING! For as little as £10, you could own a piece of fettle. With this being the first time ever we’ve given you wonderful lot the chance to become shareholders, we’re loud, proud and shouting about it from the rooftops!

If you're interested in becoming a fettle shareholder, we've just opened pre-registration which you can access here. This means that before the campaign goes live in a few weeks, we'll give anybody who has pre-registered the chance to invest first. There's a limit to how much we will raise so pre-registering gives the best chance to actually get in there.

We’re also aware that crowdfunding can be a confusing term if you’re unfamiliar with it. Sounding similar to a GoFundMe, or general fundraising page, crowdfunding is in fact very different. So, wanting to avoid any crowdfunding based confusion, we’ve smashed together a short guide to get you fundraising savvy.

But gang, before we dive head first into investing 101, let’s lay the groundwork and look at why a business would want to crowdfund in the first place (and we apologise if we’re teaching you to suck eggs here). In short, there are broadly two ways a business can expand and grow:

  1. Reinvest your profits over time, gradually expanding outwards (emphasis on the word gradual)
  2. Raise external funds to aid expansion. In exchange for funds, the business gives away equity (shares)

We're going for the second option because we're hungry to get our service out to riders everywhere and we think what we're doing is the best way to support the growth of cycling and sustainable travel in the UK.

As a business grows, it may seek further investment to support new ventures or expansion. For example, in our case, we received backing to create a network of bike repair workshops in London. We always knew that to follow our plans of expanding outside the capital we’d have to seek further investment. If you’re not gripped already(!), we’ll look at why a business may choose to crowdfund over the many other ways it could generate the funds.

Crowdfunding isn’t a charity collection

As you may have gathered by now, Crowdfunding is very different to a whip round. The confusion can come from the word ‘fundraising’ which makes it sound like a business is asking you to lob in a tenner to keep them afloat. The key difference with crowdfunding is that it’s a financial investment. You become a shareholder (regardless of if you invest £10 or £100,000), and will hopefully make a profit on your investment.


Getting a return on your investment

Whilst you may agree with a company’s vision, what they stand for, and what they’re hoping to achieve, let’s not beat around the bush here. The whole point of an investment is to get a healthy return on your money. So, how does that happen?

You can either:

  1. Sell your shares when their market value has increased, thus making a profit. It's important to note that there may be restrictions around when this is possible.
  2. Get a proportion of the sale when the business is sold
  3. Get a payout when the business is floated on the stock market
  4. Get a payout in the form of a dividend

Potential investors always want to know how they will see a return in their investment and in what timeframe. For example, can they expect a dividend in 5 years? Is the plan to continue expanding and eventually be floated on the stock market? Or will they continue to grow the business over the next few years before selling it on?

What are the risks?

The biggest risk is that the company flops and you lose your investment. Even with a realistic 5 year plan and the greatest successes under their belt, external factors may throw a business off-course. There’s also the risk that exiting takes longer than planned.

However, the UK government and HMRC has a brilliant scheme which helps small companies to receive investment whilst helping to offset the risks to individuals. EIS relief allows investors to claim 30% income tax relief on investments of up to £1million per tax year. Investors are also exempt from paying Capital Gains Tax where the shares are held for 3 years or more. There is loss relief meaning that investors can elect that the amount of the loss, less the income tax relief given, is set against income of the year in which they were disposed. We know it may sound complicated but you can read some more about the generous scheme here.

The benefits of crowdfunding

For those keen to build an investment portfolio, crowdfunding requires little effort. All campaigns are available online with a few clicks, whilst it’s easy to reach out to companies you’re interested in should questions arise. Investment is no longer exclusive, with opportunities offered to everyone, regardless of income level.

For the business, they receive a crowd of ambassadors ready to support their brand and refer them to friends and family. Investors will come armed with ideas, opinions and experiences that will help the company grow, whilst anyone who has invested is almost guaranteed to continue using that business over competitors.

Getting started

If you’re interested in getting stuck into crowdfunding, or just want to find out more, we’d recommend exploring the wealth of crowdfunding campaigns out there. Whilst we are using Crowdcube, Seedrs is another very popular platform. From sustainability apps to smart containers, there is a wide variety of potential businesses to invest in. But, before you do anything, make sure you fully understand the process, the business and the risks involved in investment.


*Investments of this nature carry risk to your capital. Please invest aware*.

More useful how to posts

23 Jul
2021

How to: Improve Your Cycling Confidence

If your bike has been sitting in hibernation for a while, then chances are...
Read more
23 Jul
2021

5 Step Bike Safety Check

If your bike has been sitting in hibernation for a while, then chances are...
Read more
3 Aug
2021

How To: Prevent Punctures

If your bike has been sitting in hibernation for a while, then chances are...
Read more

More useful cycling posts

27 Aug
2021

Transforming Empty Space for Bike Repairs

If your bike has been sitting in hibernation for a while, then chances are...
Read more
23 Jul
2021

5 Step Bike Safety Check

If your bike has been sitting in hibernation for a while, then chances are...
Read more
23 Jul
2021

How To: Clean Your Bike

If your bike has been sitting in hibernation for a while, then chances are...
Read more

What our customers say

"These guys are awesome. Firstly, they’ll pick up your bike within about 48 hours - when the local bike shop tells you they have no slots for weeks or even months. Then they call you within a couple of hours to tell you what needs doing and give you a quote. Then they fix it and deliver it back, keeping you updated all the time by text and arriving when they say they will. It’s simple stuff but no-one else is doing it in the bike repair space… I’m telling everyone about them"

- Tom L
"Simply the best: the team are super knowledgeable and skilled—they love bikes and quality parts! They do what is needed and will never upsell unnecessary work to make an extra buck (some places do). They are also super friendly and efficient. Had my beloved bike serviced in 2 days when all other places had a 6-week waiting list. Communication is always up to date so your expectations are managed at every step of the process. A gift to London cyclists. Thank you team Fettle."

- Simona S
"Honestly gob smacked at how easy and fast these guys made getting my bike fixed, everywhere near me was booked up till mid may and these guys in the space of less than 2 days picked up my bike, repaired and serviced it and returned it home. Their communication was great about what they'd done etc and can not suggest them more to anyone who wants their bike fixed quickly professionally and reliably!"

- Jacob W
"Excellent service! I drop my bike and it was ready the next day. Really liked the fact they send you the price quotation to be accepted before starting any work on the bike. Definitely recommended for any bike type you have!"

- Rafael B
"Excellent service! I drop my bike and it was ready the next day. Really liked the fact they send you the price quotation to be accepted before starting any work on the bike. Definitely recommended for any bike type you have!"

- M R

Don't just take our word for it

Our customers are shouting from the rooftops about team fettle. We're changing bike repair in London for the better.

98% of customers have rated our London workshops 5* on Google

Get your bike back on the road in no time...