One of the big issues of equity crowdfunding is the lack of liquidity as investors have to generally wait for the entrepreneur to exit the business or the company to be publicly listed via a traditional IPO (Initial Public Offering) before making any return.
For this reason, equity crowdfunding platforms have tried to find ways to overcome such a burden which has proven to be detrimental to attract new investors.
A few days ago, Crowdcube threw its hat in the ring announcing the creation of a new and innovative solution, the Direct Community Offer (DCO).
The product solves the age-old problem of liquidity for early investors, which has been exacerbated by businesses staying private for longer, and represents an exciting next step in the evolution of investment crowdfunding.
Crowdcube
How does it work? By connecting three sets of stakeholders (i.e. entrepreneurs who wish to offer their communities a stake in their business, new investors via Crowdcube, and the current shareholders in the business who want to take up the opportunity to sell shares), the DCO gives later-stage businesses a way of offering early investors a return on their investment while simultaneously giving new investors a chance to buy a stake in a business they believe in.
With today’s consumers’ eager to buy into, not just buy from the businesses they believe in, our Direct Community Offer enables you to offer your community the chance to do just that.
Crowdcube
Eager to find out more? Just click here.
Oliver* 