Save content
Have you found this content useful? Use the button above to save it to your profile.
iStock_Beholding Eye_Graph Upturn

FreeAgent crowd surfs for cash

by
28th May 2015
Save content
Have you found this content useful? Use the button above to save it to your profile.

Edinburgh-based cloud accounting developer FreeAgent has turned to the online crowdfunding platform Seedrs to raise £1m.

FreeAgent founder and CEO Ed Molyneux told AccountingWEB this was not the company’s first experience with alternative fund raising.

“We’ve used angel equity investments before,” said Molyneux. “We were looking at all of our different options and what we realised was that we have these 40,000 existing customers including another 500 accounting practices on top of who are really engaged with the product.”

Before commencing the campaign, FreeAgent surveyed users “to find out whether our customers would be interested in investing”. The response was very positive, according to Molyneux.

The fundraising campaign has gone well so far. The standard campaign length on Seedrs is 60 days. After seven days FreeAgent has raised £466,000 from 200 investors - nearly half way towards its goal.

Dealing with so many shareholders could complicate matters for the company, but Molyneux explained: “Seedrs wraps up all the investors into one shareholder called a nominee. That nominee, which is run by Seedrs themselves, holds shares for all the crowd investors as one shareholder when it comes to administration and paperwork.”

FreeAgent’s CFO Kath Tenner is “very keen” on the latest financing round.

“She’s been with the business for nearly three years now. She’s gone through the financing we’ve been doing the past few years,” said Molyneux. “She’s obviously onside with anything that will bring more money in to accelerate the business.” 

In opting for this funding model, FreeAgent is following the path taken by its rival Clear Books, which said it has so far raised £1.5m through crowdfunding. Clear Books is now aiming for a target of £3.3m in a second round of online fund-raising.

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.