Cashing in: Crowdfunding bars, bees, booze and cures

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BBC News | | May 27, 2014

sunglasses ventureCrowdfunding is a method of raising finance online by asking a large number of people each for a small amount of money.

According to those involved, it is something that is becoming increasingly popular with entrepreneurs and the public.

In Scotland, crowdfunding has helped to reopen a closed-down bar in Thurso, fund a beehive business in Wishaw and is supporting an ex-serviceman's drinks business in Edinburgh.

According to the UK Crowd Funding Association, the world's first online crowdfunded project was believed to involve British rock band Marillion.

In 1997, the group was struggling to afford a US tour and asked fans to help pay for it.

Now, 17 years later, crowdfunding is said to involve thousands of groups and individuals and millions of pounds.

In a new report, the Crowdfunding Centre has quoted statistics that suggest a new project is created somewhere in the world every three minutes.

The report, eFunding and The State of The Crowdfunding Nation, also said that in the first quarter of 2014 there were 2,230 new projects in the UK.

Also, more than £4m in rewards - donations made by individuals and businesses - were pledged in that first quarter. A further £5m of equity, which is money given in exchange for a share, or a small stake in the business, project or venture, was generated.

Check out:  Canadian Crowdfunding Directory (100 portals and providers as of May 27, 2014)

The report said that in March more money was pledged in the UK than in January and February combined.

UK-based websites, or platforms, offering crowdfunding services include Angels Den, BankToTheFuture, Crowdfunder, Crowdcube and Property Moose.

Bloom VC was the first crowdfunding site to be launched in Scotland, and the majority of its early projects were Scottish owned.

Since Bloom other Scottish-based platforms have emerged such as ShareIn in Edinburgh and Glasgow's Squareknot.

The projects and businesses in Scotland seeking finance are wide ranging.

Simon Collier, a trained cocktail bartender who moved from Gloucester to Scotland in 2004, generated £20,000 through Equity CrowdFunding on BankToTheFuture.com to help him buy a closed-down pub in Thurso.

Family, local people and businesses were among those who gave him money and the new bar, Mr C's, opened in July last year.

"We first opened with a couple of tables and chairs. That was pretty much all we had," said Mr Collier of the bar which has since added designer stools, a pool table and wall-mounted flat screen TV.

Mr Collier said the initial process of crowdfunding was tough, but once he had made his pitch the venture generated great interest in the town.

View:  How to create a realistic budget for your crowdfunding campaign

"The bar was one of several businesses in the area that had closed down and that fact strengthened the pitch. People who used to use it all wanted to know what was being planned," he said.

Another Scottish venture using crowdfunding is sunglasses brand, Tens.

It has been launched by Kris Reid and Marty Bell, who are both from Inverness, and Tom Welsh, from Sheffield. They met when they were students in Edinburgh.

Surprisingly for a business selling a summer accessory, Mr Reid their concept was born during a road trip through the Highlands on "a grey afternoon three years ago".

Using San Francisco-based website Indiegogo, the trio hoped to sell £9,400-worth of orders for their Far East-manufactured product.

But Mr Reid said: "Currently, we're sitting at £235,469, raised making Tens the most funded sunglasses project on any crowdfunding platform and the second most-funded fashion project ever on Indiegogo.

"We've received pre-orders from 84 different countries."

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