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How crowdfunding can help grow your business

In today's challenging business landscape, securing funding for your start-ups or small businesses can be a daunting task. It is one that we have been dealing with nearly all year as the traditional avenues for financing, like venture capital and bank loans, are becoming increasingly difficult to access.

Enter crowdfunding, a funding alternative that has opened up new possibilities for both investors and business founders alike. In this blog post, we'll dive straight into the core aspects of crowdfunding, its benefits for all involved, and why we at Theo Tech have embraced this innovative approach.

A man looking at stock prices on his laptop.

What is crowdfunding?

Crowdfunding involves raising capital by collecting small contributions from many individuals, typically via online platforms, rather than one or two large contributions from high-net-worth individuals.

These platforms connect entrepreneurs and businesses seeking funds with potential angel investors and venture capitalists while allowing friends, family and colleagues to invest in projects they care about. It's a collaborative way to fund your project or business, and, as the name suggests, it is for everyone. With Seedrs, the crowdfunding platform we are using, you can start investing with as little as £10. In short, everyone gets the opportunity to play the role of Jordan Belfort (minus the shenanigans), and businesses get the much-needed funding they need to grow.

What are the benefits of crowdfunding for investors?

Diversification: Crowdfunding allows investors to spread their capital across multiple projects, reducing risk by not putting all their eggs in one basket.

Accessibility: It makes investing straightforward, enabling people from all walks of life to participate in supporting innovative ideas and businesses.

Transparency: Crowdfunding platforms often provide detailed information about projects, fostering transparency and helping investors make informed decisions.

Coins spilling out of a glass jar.

How does crowdfunding help businesses grow?

Access to Capital: Crowdfunding provides access to a broader pool of potential investors, increasing the chances of securing the necessary funds.

Market Validation: Successful crowdfunding campaigns can serve as market validation, proving demand for your product or service.

Engagement: Crowdfunding can help build a community of passionate supporters who not only invest but also promote your brand and product.

Awareness: On top of the engagement, these newfound promoters can significantly increase brand awareness by sharing the project with their peers.

Flexibility: Different types of crowdfunding allow founders to choose the model that best suits their business needs and goals.

Why we chose to crowdfund with Seedrs…

At Theo Technologies Ltd, we've chosen to pursue crowdfunding as our means of raising capital and growing our business for a simple reason: the changing dynamics of the UK investment scene.

According to Atomico, tech start-up investments have significantly declined, with a 57% drop compared to the previous year and a 38% decrease compared to the year before. This financial crisis has closed many doors as investors opt for less risky investment strategies in uncertain times.

To compound issues, when you look at the geography of the tech investment scene, you will find that around 80% of all investment goes into London and Cambridge-based tech start-ups, with only around 8% of investment going into Manchester, which is where we are. So not only is there 57% less money being invested, only 8% of it is being invested in our local area.

A man looking up at the sky with his arms out in disbelief

Crowdfunding has emerged as a resilient solution in these challenging times, allowing us to bypass traditional funding constraints and access a broader network of potential backers. It aligns with our vision of innovation and community-driven growth since, as we have already said, crowdfunding is for everyone! Regardless of whether you have £10million to invest or £10, when crowdfunding, every pound helps.

To conclude, crowdfunding offers several advantages for both investors and business founders. To name just three, it fosters inclusivity, provides access to capital, and can act as a market validation tool. For us at Theo Tech, the choice to go down the crowdfunding route was influenced by the ever-evolving investment landscape and the need for an alternative path to realise our business goals. In this uncertain climate, crowdfunding represents not just an opportunity but a lifeline for startups and businesses looking to flourish. If you want to join us on our crowdfunding journey, you can sign up to our pre-registration page today by clicking the following link:


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