Crowdfunding Trampoline
Trampoline Systems, the London-based social analytics business, is using an unconventional approach to finance its growth. Instead of raising money from venture capital firms Trampoline is “crowdfunding” the business, raising small stakes from a large group of investors.
Trampoline has published this website to explain how crowdfunding works, why Trampoline has chosen this route and what entrepreneurs need to think about if they’re considering this path for their business.
Crowdfunding
The crisis in mid-stage venture capital
Technology-intensive businesses like Trampoline would conventionally finance initial R&D and market development through the sale of equity to venture capital institutions. However the financial crisis has had a severe impact on the venture capital industry and venture capital funds have largely stopped funding higher risk areas of innovation. According to research by Deloitte, funds are reducing their overall investment, supporting existing portfolio businesses and shifting investment focus to later-stage businesses that are either profitable or close to profitability. From Deloitte’s report:
“We’re seeing reduced investment levels as firms either invest smaller sums in very early-stage companies, or invest traditional sums in fewer and much later-stage companies. The middle ground has been largely vacated.
Businesses like Trampoline at the classic “Series B” growth stage are being left without a source of capital to support them up to the point where an initial market has been established and they are ready to scale. Trampoline believes crowdfunding offers the best solution to bridge this funding gap.
Crowdfunding in a nutshell
Crowdfunding is an alternative approach to raising finance. It’s been developed over the last decade, principally in the film and music industries. Unlike traditional models which rely on large contributions from one or two institutions crowdfunding is based on raising smaller sums from lots of people, who may be linked by social networks or shared interests.
Find out more about Crowdfunding
News
- Trampoline featured in Growth Business article on the VC crisis
- Charles Armstrong interviewed for Out-Law podcast
- Techcrunch article on Trampoline crowdfunding
- Sunday Telegraph feature on Trampoline Crowdfunding
- Financial Times on Trampoline & alternative finance
- Financial Times feature on Trampoline's Crowdfunding
Trampoline
About
Trampoline Systems is an award-winning software business based in London (UK). The company’s SONAR technology is the world’s first social analytic platform for business. Trampoline is in the early stages of commercialising the technology.
Trampoline’s crowdfunding process
Trampoline is raising £1 million from private investors over a 12 month period. The investment will be structured in four tranches of £250,000 each. The minimum investment will be £10,000. This is the first time a technology business like Trampoline has financed its growth through crowdfunding.
Trampoline has worked closely with legal advisors to ensure its crowdfunding process complies with Financial Services Authority (FSA) regulations. The company is only inviting expressions of interest from people certified as high net worth individuals or as sophisticated investors, plus Trampoline’s existing shareholders.
Further information
If you are covered by one of these categories you may be interested in accessing details of Trampoline’s crowdfunding process.
We apologise that we’re not able to provide details of Trampoline’s crowdfunding process to anyone who’s not covered by one of these categories.