In this post we continue our brief look at the models in crowdfunding and have moved along the DREIM acronym (Donation, Reward, Equity, Interest and Mixed) to ‘E’ which stands for equity. This model is by far the most complicated to understand.
In part this is because offering equity means offering an investor a chance to share the risk of an early stage business idea, and also because the platforms that exist to facilitate this process vary in what they demand from the entrepreneur.
Government regulation is also very tight in respect of an organisation offering equity to the public. Because of this all UK platforms offering equity are regulated and have controls not just over the types of organisation that can offer equity but also over the types of investors that that can invest in a project.