It almost feels like another age, but back in early 2013 I interviewed Jonathan Downey, Director and majority owner of . Rushmore had just raised £1.5m of cash on – by some way the biggest crowd fund “raise” in the UK at that time. Most of that cash came from members of the private clubs that Rushmore still operates. Crowd Funding platforms were still very new and, at the time, Rushmore represented a double digit percentage of all capital raised on platforms.

Very exciting stuff – so exciting that I was driven to developing the Alternative Funding Network (AFN) and then more recently Informed Funding (which covers all finance, not just “altifi”). At our early networking events for members of the AFN, the themes were all about building credibility,  public awareness and understanding of what platforms did (and didn’t) do. I can recall statements such as “the Crowd will dictate valuations”, “it’s the Crowd that does the due diligence” and “this is game changing”.

Roll forward to late May 2016, by which time UK (equity) crowd funding platforms have raised some £300million for early stage business. Crowdcube alone has “invested” (note the term they use on their website) over £160million. Last week the AFN hosted a roundtable discussion (hosted by ), where we discussed the future sustainability of “Alternative Finance” in the UK. We had leaders from many of the big names in the sector, and we’ll soon be releasing a report that (I hope!) summarises the wide range of views round the table. If you register on Informed Funding, you will be able to get a free copy.

All I’d highlight at this point is that the themes being discussed, and the tone of the conversation, is different three years on. While all early stage investing is risky, there’s no suggestion that due diligence is now left to the crowd. In fact it’s now very obvious that the main platforms are seriously focused on making sure only strong, well vetted opportunities make it in to their shop window (which doesn’t mean no risk, but might mean the odd megastar creates a big return to cover other losses).

It’s pretty clear that the cost of doing all this makes it hard to imagine a Platform being profitable simply by charging commission or fees based on activity. Profitability must now be a long term aim, based ALSO on the platform having a carrying interest in the future success of the investee businesses. That aligns the Platform with the Crowd investors – and certainly changes the themes discussed at our AFN gatherings. First of all, it’s not about technology, but about good finance.

You can find out more on the morning of 9^th June, when Informed Funding are hosting a seminar entitled “Managing the Crowd”. Aside from the opportunity to meet various Crowd Funders and entrepreneurs, it’s a chance to listen to Steve Folwell, CEO of crowdfunded success story, talking about the realities of crowdfunding. Steve is being interviewed by Rod Brown, who is CEO of – the disruptive, proptech home improvement brand. Opun has also raised some crowd equity. CLICK HERE TO BOOK YOUR SPACE.   This is the best way of better understanding what Crowd Funding Platforms now do!