CROWD2FUND has launched its first funding round since being granted Enterprise Investment Scheme (EIS) approval from HMRC.
The platform has already raised 19 per cent of its target from current shareholders and has now opened the £1.2m fundraise to private investors.
Crowd2Fund described the funding round as a pivotal moment in its growth and “an exclusive opportunity for private investors to own the platform before they move on to secure a Series A investment round to dramatically grow the business in 2020”.
The platform received EIS approval in September after a 12-month wait. Through the EIS scheme, investors who invest £10,000 in Crowd2Fund will potentially be eligible to receive up to £3,000 from HMRC in the form of tax relief.
Investors are sheltered from paying capital gains tax on any future returns and they could also be protected from losses, with up to £3,150 of loss relief.
“This means that their financial exposure to Crowd2Fund is potentially reduced to £3,850 while retaining the full £10,000 in equity,” the platform said.
The funds raised will be used to grow the platform’s investor and business base and enhance the recoveries and credit assessment processes.
Following the current raise, Crowd2Fund plans to use the remainder of its £12m EIS allowance to conduct a Series A investment round which will go towards creating a decentralised bank. It said this will combine the benefits of a challenger bank with peer-to-peer lending.
“By offering direct investing into entrepreneurs and their AI automated investing system with deposit capabilities and full banking services, they will build a community of entrepreneurial investors and small- and medium-sized enterprises,” it explained.
Crowd2Fund lets investors choose which businesses they invest in. Investors can ask the directors questions and receive rewards and gifts from the businesses they lend to.