When I started my research on equity crowdfunding, the perception of my team was to live in a sort of constant vortex: a fascinating topic, difficult at time to catch due to its fast-moving nature, and curiosity for the next big news.
Just a few years later, the scenario has dramatically changed. Indeed, many have been the platforms that went burst along with a plethora of startups. But, startup business is risky and someone has to be mature enough to cope with it (as someone else from the industry has reminded me).
Indeed, every nascent industry, like every new venture created, faces a permanent state of uncertainty. This is not only the way it works but also a huge necessity to foster innovation. This also means that it’s a tough game.
Cambridge-based equity crowdfunding platform SyndicateRoom makes no exception. Despite 2019 has been the busiest year on record for crowdfunding platforms, as data by the research house Beauhurst confirm, and several brands were chasing multitudes of ambassadors via crowdfunding platforms, Crowdcube and Seedrs squeezed them out from the competition.
Officially the company turned towards a fund-first approach in an attempt to transition towards a professional investor model to provide access to the “elusive top deals.”
However, the leading title in the segment, Crowdfundinsider.com, doubts that this strategy can be successful. As argued by the media outlet a fund of £5.6 million is very small and a fee of 1% “won’t take SyndicateRoom very far.”
This of SyndicateRoom is actually a big story for the alternative finance industry not only because it marks a big shift, but also because it raises more than a question about its sustainability in the long run.