Member Article

Garbutt & Elliot hails arrival of Crowdfunding Association

The formation of the UK Crowdfunding Association has been hailed as a crucial move in providing much-needed finance for the Yorkshire creative sector by leading accountants Garbutt & Elliott.

David Dickson, the senior partner of Garbutt & Elliott, which has offices in York and Leeds, explained that Crowdfunding allowed small firms and start-ups to raise capital from many small investors, either by selling an equity stake, or in return for “rewards” and discounts related to products and services.

Mr Dickson said: “The creative sector has recently struggled to raise money from the banks, which has been a barrier to growth. Crowdfunding can dramatically change this.

“Whilst it only raised around £11m for businesses in the UK last year, our predictions indicate this will now become a major source of early stage finance.

“Those people who were at Venturefest in York recently will have seen a great presentation given by Charles Cecil of Revolution Software about their recent success in raising finance by this method.

“There are also a number of other organisations in the city who have successfully raised finance through Crowdfunding; operators such as Indiegogo and Kickstarter for creative projects including films, videos, music albums and plays.”

Garbutt & Elliott has produced its own Crowdfunding report, which can be found on its website and was written by Adeoluwa Adeniyi, an intern from The University of York who worked at the firm last summer.

Mr Dickson added: “Our experience in seeing Crowdfunding operate in the USA supports the view that it should be encouraged, as it will provide one of the UK’s largest growth areas with an appropriate form of funding which is monitored by appropriate legislation.

“Crowdfunding is suitable for ordinary retail investors provided the risks are made clear and controls are in place.”

This was posted in Bdaily's Members' News section by Mark Lane .