EQUITY

What is equity crowdfunding?

Equity crowdfunding is the process whereby people – crowd invest in an early-stage unlisted company (a company that is not listed on a stock market) in exchange for shares in that company. A shareholder has partial ownership of a company and stands to profit should the company do well. The opposite is also true, so if the company fails investors can lose some, or all, of their investment.

Why is equity crowdfunding a good way to raise investment?

Equity crowdfunding allows ambitious, early-stage and other growth-focused businesses to raise capital from a large and diverse group of passionate investors in exchange for a portion of equity.Previously, this type of investing was only readily accessible to venture capitalists and angel investors with plenty of time and resources at their disposal. Many businesses would struggle to generate the initial few rounds of funding needed to build the momentum required for true growth.

Can my business use HighCastle to raise capital?

We welcome submissions from any business operating in any sector, and you are welcome to submit a campaign at any time. Each campaign submitted is reviewed on a case-by-case basis by our investment team, who reference the following criteria to assess viability: Development – investors will usually want to see a product fully-launched, or ready to launch.
Reach – the beginnings of a community or customer base around your business is imperative, and we’’d expect a chunk of investment to come from them to generate initial momentum and interest in your campaign.
Valuation – investors will want to see a realistic valuation, so this should be a fair and clear representation of where your business is, and not where it might be one day.

How long does it take to raise funds?

Once your campaign has been accepted, our Investment Team will review it and work with you towards a private launch. This process should take around two weeks, but can take longer if there are issues around validating factual statements. However, if the business is well prepared, two weeks is a manageable timeline. After private launch, which can last up to fourteen days, your campaign will launch publicly to the rest of the HighCastle community. At this point, each campaign has up to 60 days to reach it’s target.
If a campaign successfully reaches its target, HighCastle will then conduct due diligence on the business, as well as completing any other administrative duties required. Unless there are any issues, this can be completed within a couple of weeks and we will transfer the full amount raised (less our fees) directly to the business.

Do businesses issue shares directly to investors?

Each business that successfully funds on HighCastle will issue shares to HighCastle as sole nominee shareholder of the investors. We will then provide each individual investor with a beneficial ownership certificate on behalf of the business. But if your investment more than 25,000$ , and you want to register share on your company , HighCastle team would be glad to help you

Do I need a business plan?

HighCastle does not require a full business plan to be available with the campaign. The campaign itself should cover they key information required by investors. However, some investors may ask you directly for a business plan through your campaign’s Documents tab. It is up to you whether you want to provide it.

How do I value my business?

Valuing an early stage business can be tricky, especially if you have little or no trading history. HighCastle won’t impose a valuation on your business, but we will challenge your valuation if we think it is unreasonable when compared to the stage of your company or other similar companies’ valuations. As a starting point you should consider how many milestones the business has reached so far in its journey. The more you have passed the more you will be required to justify a higher valuation. Generally speaking, for any valuation over £1 million, investors would look to see some fairly good traction in your market.

What does it take to succeed in crowdfunding?

What does it take to succeed in crowdfunding?

  • Lead investors
  • Good story
  • Simple company and investment structure
  • Good network
  • Well-planned marketing campaign

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