Getting in on the ground floor of the next big thing is always an exciting prospect and that’s why crowdfunding is such an attractive proposition for professional and amateur investors alike. But there’s no hiding from the fact that backing a business through an equity crowdfunding site can still be a real gamble. Fortunately, new ratings platform CrowdRating is aiming to bring some much-needed security to the funding of startups.
The brainchild of Alex Heath, angel investor and CEO of Interactive Investor, the personal finance website, and Modwenna Rees-Mogg, the founder of AngelNews, CrowdRating was born when its founders began to worry that armchair investors didn’t have the same access to independent research or expertise as their professional counterparts. Heath and Rees-Mogg realised that there was a gap in the market for a service that would help them screen and shortlist quality crowdfunding candidates.
In short, CrowdRating’s service works by grading companies in three categories – management, product and investment – awarding each either bronze, silver or gold; these are then broken down into further subcategories with each accompanied by a single sentence summary. Each business’s report also includes a standardised financial summary and a concise summary that highlights any particular areas of concern.
The startup also provides a premium service that offers a company health check, helping startups get shipshape for their campaign, something we’re sure will be happily received by wannabe crowdfunded businesses. Long term, it is also looking to bring its service to other investment markets, assisting venture capitalists and private equity funds in making safer and smarter investments.
Given that crowdfunding is helping to hook up ambitious and innovative companies with much-needed capital, anything that strengthens the ecosystem is a definite plus. By bringing extra confidence and security to crowdfunders, we’re sure CrowdRating is going to be a real asset to the investment community.