Crowdfunding ‘key for York’s creatives’

Crowdfunding is set to provide a much-needed boost to the Yorkshire creative sector, according to a leading York financial specialist.

Accountants Garbutt & Elliott, based at Monks Cross, hailed the formation of the UK Crowdfunding Association as a “crucial move” in providing finance as banks remain reluctant to lend.

Crowdfunding allows small firms and start-ups to raise capital from many small investors, either by selling an equity stake, or in return for “rewards” or discounts related to products and services.

“The creative sector has recently struggled to raise money from the banks, which has been a barrier to growth,” said senior partner David Dickson.

“Crowdfunding can dramatically change this. Whilst it only raised around £11 million for businesses in the UK last year, our predictions indicate this will now become a major source of early stage finance.”

He highlighted the Venturefest York presentation given by Charles Cecil of Revolution Software about their recent success in attracting funding this way.

“There are also a number of other organisations in the city who have successfully raised finance through Crowdfunding operators such as Indiegogo and Kickstarter for creative projects including films, videos, music albums and plays,” Mr Dickson said.

You can download Garbutt & Elliott’s Crowdfunding report (PDF) here. It was written by Adeoluwa Adeniyi, an intern from the University of York who worked at the firm last summer.

“Our experience in seeing crowdfunding operate in the USA supports the view that it should be encouraged, as it will provide one of the UK’s largest growth areas with an appropriate form of funding which is monitored by appropriate legislation,” Mr Dickson added.