AltFi Data, in association with Nabarro, has just published a report that attempts to take a broad, aggregated view of the UK equity crowdfunding industry.

Given the relative infancy of the marketplace, it’s difficult to read that much into the results. We know from the report that equity crowdfunding is growing fast, and we know that there are an increasing number of platforms offering smaller investors a variety of opportunities. But any guidance on investment or platform performance is hindered by the lack of standardised measurement criteria and the absence of sufficient transparency. AltFi has made some high-level recommendations, designed to help the industry correct these issues. And while the report may not (yet) provide a robust assessment of the industry, it’s encouraging to see that their proposed best practice closely reflects what we at Growthdeck are aiming to provide.

The report recommendations

• Platforms should take some responsibility for company updates. Some information, e.g. company status, should be shared with the wider subscriber base, as well as with investors, in as timely a manner as possible.
• Platforms should allow all subscribers to see the latest Companies House information for all funded campaigns, as a minimum, and should work towards updating company status in as timely a fashion as reasonably possible.
• Platforms should communicate failures to subscribers in a prompt timeframe. Where possible, sufficient disclosure should be made to allow lessons to be learnt.
• Platforms should advertise their track record, i.e. demonstrate the current status of previously listed campaigns. This should include follow on valuations and realisations, as well as failures.
• Company status information should be displayed on an aggregated basis, as well as campaign-by-campaign.
• Platforms should introduce uniform standards for reporting statistics. There is currently no reporting standard for basic metrics, such as volume funded, making comparative analysis tricky.
• Platforms should avoid issuing the crowd with a different class of shares from management and should ensure clear explanation of any differences.
• Platforms should attempt to ensure that funded companies communicate details of any follow on raises to the crowd.

Read the full report from AltFi

At Growthdeck, we intend to provide all of the above information to our investors as a matter of course. Our aim is to support investors and investees from day one through to their future exit – and a fundamental part of that support will be providing thorough and timely data and analytics to all of our users.

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