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LONDON, Jan 27 (Reuters) - A British website which allowsmembers of the public to buy stakes in small unlisted businesseshas launched a fund for people who would rather leave thedecision over where to put their money to a professional.
As banks rein in lending due to tougher capital rules andgreater regulatory scrutiny, crowdfunding, which originated as away to raise money for creative projects, has expanded rapidlyas an alternative source of finance.
Crowdcube, which has more than 57,000 investors in the UK,said the managed fund was the first of its kind and would enablepeople who want to invest but who do not have the time orresources to review company pitches and carry out their own duediligence.
The growth of crowdfunding has prompted some concern thatnot all individuals are aware of the risks involved in investingin start-up or early stage businesses, which Office for NationalStatistics research shows at least half fail.
Last year Britain's financial watchdog proposed tightercontrols for crowdfunding websites, including limits on theproportion of their portfolio people should hold in unlistedshares or debt securities, aimed at protecting inexperiencedinvestors.
The Crowdcube Venture Fund, which has a minimum individualsubscription of 2,500 pounds ($4,100), will be managed byStrathtay Ventures, a subsidiary of Braveheart Investment Group.
"There are a large number of investors who like thecrowdfunding concept but who, for one reason or another, findthe DIY route problematic," said Geoffrey Thomson, ChiefExecutive of Braveheart.
Crowdfunding websites helped companies and individualsworldwide raise $2.7 billion from members of the public in 2012,an 81 percent increase on 2011.
