Financial Times by Elaine Moore | January 31, 2014

Crowdfunding website Crowdcube has launched an actively managed fund that will pick and choose early-stage businesses for investors.

The platform, which was used by TV presenter Kevin McCloud, of Channel 4’s Grand Designs to raise money for his property business, said that the fund was designed for people who want to invest in start-up and early-stage businesses but who lack the time to research and review pitches made by new companies on the website. “Our aim is to provide everyday investors with choice,” said Darren Westlake, chief executive.

Related: Equity Crowdfunding Platform Crowdcube Enters Canada

Investors will need to put in a minimum of £2,500 in the fund, which has a “preferred rate of return” of 7 per cent and will be managed by Strathtay Ventures, part of Braveheart Investment Group, the listed Scottish SME specialist. The annual management fee is 2.5 per cent and investors will be charged an initial set-up fee of 1.5 per cent.

Crowdcube is part of a growing alternative finance sector hoping that their websites can supersede the role that banks traditionally play in funding individuals or small companies. Some websites, such as Crowdcube, allow investors to pick and choose who they want to give money to, in return for a share of the equity in that venture. Others, such as Zopa, faciliate loans.

The sector, which is less than ten years old, has been making a serious effort in the past year to encourage “mainstream” investors to put in money.

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