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Big Society Capital To Partner With Crowdfunder, Ethex And ThinCats In New Crowd Match Fund

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Crowd by James Cridland via flickr

Three of the largest crowdfunding platforms in the UK will join Big Society Capital in a unique £10 million Crowd Match Fund which will allow the public to invest directly into charities and social enterprises.

Crowdfunder, Ethex and ThinCats (through Community Chest) will help connect people with the causes they really care about by listing social sector organisations who want to raise debt and equity finance.

The £10 million fund will see Big Society Capital match crowdfunded investments made by individuals into Social Investment Tax Relief (SITR) eligible charities and social enterprises. It will be the first of its


kind to match different investments made by the public across the social sector. Private investors will qualify for Social Investment Tax Relief (SITR), which offers a 30% tax break.

The Chancellor recently announced an increase in the amount that younger charities and social enterprises can raise through SITR to £1.5 million from April 2017.

Ben Warren, Investment Associate at Big Society Capital, said:

“This fund marks a totally new approach for social investment and crowdfunding. By bringing together the experience and knowledge of these three partners we want to open up opportunities for the public to invest in a huge variety of causes they feel passionate about.


“We hope that this initiative will help charities and social enterprises to find new routes to investment which could offer better value and engagement from their local community. We know that donation-based crowdfunding was the fastest growing model of alternative finance in 2015, and we are excited about the potential for this fund to create similar momentum in the social investment sector.”

Recent Nesta research shows that the UK alternative finance sector grew by 84% in 2015, with £3.2 billion in investments, loans and donations.

Kevin Caley, CEO of Community Chest (and founder of the ThinCats platform), said:

” By providing loans to enterprising projects with a clear mandate for social good, Big Society Capital has provided an exciting new source of finance for social enterprises and charities, many of whom have struggled for funding during recent years.

This makes it the perfect partner for ThinCats, and Community Chest in particular, which connects investors in search of financial returns with social enterprises in need of funding. By doing so Community Chest is providing a tax-efficient way to make a difference in the community, allowing private investors the opportunity to support a good cause while potentially earning a return on their investment. The new Crowd Match Fund is a real step change for social funding and could become the lifeblood for dozens of social projects in the years to come.”

Phil Geraghty, Managing Director of Crowdfunder said:

“This is going to be a game changer for groups looking to do Community Share offers. We know from Crowdfunder’s experience that matching can supercharge campaigns and that for every pound of matched funds for

reward-based crowdfunding, it levers in £4 from the public. For community groups with big plans and projects, in our experience community shares are the main way they’ll fund those, and being able to incentivise their supporters to invest will be a fantastic addition.”

Lisa Ashford, CEO of Ethex said:

“We are thrilled to be partnering with Big Society Capital to roll out this innovative match fund scheme to help social enterprises find the finance they need to grow and flourish. This scheme will encourage more people to invest in businesses they believe in so they can have a direct connection with their money. Having raised close to £50m in investment for organisations that have a positive impact on the world, we can’t wait to make more money do good.”

The platforms deploying the fund on their sites will allow the public to invest directly in charities and social enterprises, and make use of SITR. SITR enables individuals to gain personal tax reliefs, which can include income tax at 30% of the amount invested, capital gains disposal and hold-over relief.

Matt Fountain, who raised investment through SITR for his social enterprise Freedom Bakery, says the new fund will make a huge difference to charities and social enterprises:

“I think we will see a fast increase in the number of deals being made through crowdfunding platforms and the fund is going to be a very powerful tool for communities and social enterprises to raise investment.

If crowdfunding has been the democratising of money, then the SITR match fund is the democratising of investment. The magic of crowdfunding in this way is that it will not only bring in much needed investment but it will unite communities and bring the public far closer to the causes they seek to support.”

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Green Tech Start-Ups: Are they the Future?

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Endless innovations are occurring in green companies, reinventing the industries they belong to. Gradually, they are beginning to amass more success and popularity. Consequently, these factors serve as a good indicator for green technology businesses, and their development must begin somewhere.

Green tech start-ups boast a wide array of opportunities for the economy and environment, while boosting recruitment openings with valuable services. While the technology industry is littered with high revenues and competition, the green tech start-ups are the clear sign of a cleaner future.


Fulfilling a Genuine Need

Many tech companies will market themselves as the ultimate tech giants to shift stock and make profit. As they all vie for attention through warped corporate rhetoric, there is only one ethical winner; the start-up green tech company.

Some argue that mainstream tech businesses have grown far too big, branching out into other industries and standing between the consumer and practically everything they do. However, green tech start-ups go beyond the shallow ambitions of a company, answering a call to sincerely help the customer and climate in any way they can. Of course, this is an attractive business model, putting customers at ease as they contribute to a humanitarian cause that is genuine through and through.

After all, empathy is a striking trait to have in business, and green tech start-ups maintain this composure by their very nature and purpose.

Creating Opportunities

Despite the pursuits for clean energy still needing more awareness, green tech is an area that is ripe for contribution and expansion. There’s no need to copy another company or be a business of cheap knockoffs; green tech start-ups can add a new voice to the economy by being fresh, fearless and entrepreneurial.


Technology is at its most useful when it breaks new ground, an awe that eco-friendly innovations have by default in their operations. Of course, green tech start-ups have the chance to build on this foundation and create harmony instead of climate crisis. Ultimately, the tech advancements are what revolutionise clean energy as more than an activist niche, putting theory into practice.

Despite the US gradually becoming more disengaged with green technology, others such as China and Canada recognise the potential in green technology for creating jobs and growth in their respective economies. The slack of others spurs them on, which creates a constant influx of prospects for the green tech sector. Put simply, their services are always required, able to thrive from country to country.

A Fundamental Foresight

Mainstream technology can seem repetitive and dull, tinkering with what has come before rather than turning tech on its head. Since 2011, technology has been accused of stagnation, something which the internet and petty app services seem to disguise in short reaching ideas of creativity.

However, green tech start-ups aren’t just winging it, and operate with a roadmap of climate change in the years ahead to strategize accordingly. In other words, they aren’t simply looking to make a quick profit by sticking to a trend, but have the long-term future in mind. Consequently, the green tech start-up will be there from the very start, building up from the foundational level to only grow as more and more people inevitably go green.

They can additionally forecast their finances too, with the ability to access online platforms despite the differing levels of experience, keeping them in the loop. Consequently, with an eye for the future, green tech startups are the ones who will eventually usher in the new era.

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Green Companies Find Innovative Ways to Generate Capital to Expand

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Green business is a booming opportunity for shrewd, environmentally conscious entrepreneurs. According to a white paper by the Association for Enterprise Opportunity, green businesses in the food service industry and other verticals are growing up to seven times faster than their conventional competitors.

“Green market segments in the United States are growing fast. Growth rates of “green” segments are outpacing conventional segments in every industry where we collected data – for example, over the decade ending in 2011, the U.S. organic food category grew at a rate of 238% compared to 33% growth for the overall food market, and most forecasts indicate that the shift to green will only accelerate across industries. Green business opportunities will be even more prolific over the next few years, because millennials are placing greater emphasis on environmentally friendly solutions.”


Unfortunately, many promising green companies are struggling to generate revenue. They need to be more creative to find funding opportunities in 2017.

Funding challenges green businesses face

After the financial crisis struck in 2008, banks and other traditional lending institutions became much more conservative about lending money. Many green businesses turned to grants provided by the Obama administration for funding. However, most of those grants have since been suspended under the Trump administration. Congress had difficulty resuming them, because most of the green businesses that were funded had a lower survival rate than the national average.

Without funding from either traditional banks or government grants, green businesses were forced to look for other financing options. Here are some options they have available.


Other lending institutions

While corporate banks are less likely to finance new businesses these days, many smaller financial institutions are more likely to assume the risk. Specialty lending institutions and credit unions with a strong social mission are often willing to invest in promising green businesses.

However, these lenders still require perspective borrowers to submit formal business plans and proposals on how they will use their funding. Too many of them have been burned by poorly managed green companies, so they must be cautious with lending to them.

Foreign lenders

Many other countries are more invested in green development than the United States. Companies with a presence in Norway or other European countries should consider seeking loans from lenders in those jurisdictions, such as Lånemegleren.

Green bonds

Green bonds are new financial instruments that have been developed specifically for financing green businesses. The Climate Bond Standard introduced a number of policies to ensure green bonds would be safe for investors and a reliable funding opportunity for green businesses around the world. By balancing the needs of both stakeholders, they have helped facilitate green financing.

The market for green bonds nearly quadrupled between 2013 and 2014. It rose to over $100 billion in 2015.

Green entrepreneur should find out if their business model is compliant with the climate Bond standard. They may be able to tap a growing source of funding.

Crowdfunding

Crowdfunding is another very popular way for all types of businesses to generate capital. Green businesses tend to benefit more than most other organizations, because crowdfunding investors tend to be more socially conscious. They are more eager to invest in companies that align with their outlooks on social causes. Since consumers are becoming more concerned about climate change and environmental preservation, they are more willing to invest in green businesses.

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