Nicola Horlick: "Crowdfunding is a drug going straight into the lifeblood of the economy"

Ms Horlick launched a crowdfunding “experiment” in July of this year. She created the project on Seedrs, a platform which allows ordinary people to pledge their cash towards a new start-up, and raised £150,000 to fund her new venture, Glentham Capital, a business that will back Hollywood firms.

“It was live within 10 days of talking about the project with Seedrs,” she said today at the UK Crowdfunding Association Conference in London. “And we all just sat in the office watching the numbers go up and up. It was exhilarating.”

Ms Horlick claims that crowdfunding could be the answer to the current funding crisis in the UK. “The banks may say that they are lending but they’re not,” she said. “Equity and debt are essential to funding new companies. Crowdfunding is like a drug that goes straight into the lifeblood of the economy.”

The government seems to agree. It has pledged £110m over the next two through a scheme called the Business Finance Partnership, which invests through to peer to peer lenders and other finance suppliers. “Now we just need to get more institutional investors on board,” said Ms Horlick.

However, Ms Horlick did inject a note of caution into her pitch for crowdfunding. “This is venture capital which is just about the riskiest thing you can do,” she said. “Investor can get a much better return on their cash but they have to look at bad debt and fees and look very carefully at the deal.”

“You should never put all of your money into one of these things,” she continued. “And you must spread the risk. Nine out of 10 investments will go wrong but that last will carry you through.”

According to Ms Horlick, crowdfunding could be the key to ensuring that British inventions are monetised in the UK, rather than consistently being taken abroad. “We’re good at inventing things but not so good at exploiting things,” she said. “Inventors should put their potential businesses on these crowdfunding sites to see if there’s a market. You create a family of people who are willing to take a risk with you at the start.”

Source: The Telegraph