Can You Bank TO the Future?

Can you bank to the future?

Can you Bank ON the Future?

Well, in this market, no one can.

However you can Bank TO the Future!

How is this possible?



Let me introduce the subject with this short video…

Simon Dixon has launched a UK Crowd Funding site – – which is seeking to increase the competition in the UK Banking Sector by making it possible for investors with capital to directly access Entrepreneurs and Early Stage businesses.

The real innovation here is that Investors can invest through both debt and equity, as well as make donations in return for non monetary perks, such as pre-orders of a new product.

What are the challenges?

Banks currently do not lend to small early stage companies.

Early Stage UK Venture Capitalists represent a small part of the market and most will not invest in businesses with less than £1m in revenues (although there are a few rare exceptions).

The Stock Market is not available to very small, early stage enterprises.

The Angel Market is very difficult to access other than through Angel Network Organisations and although they help early stage enterprises with the process, they need to be paid for their work and introductions which can be expensive, especially if a relatively small amount of money is being raised ie less than £100,000.

What is Crowd Funding?

Crowd Funding enables investors to invest small amounts of money in a range of investments, thereby diversifying their risk through a portfolio.

The Crowd Funding Loan enables investors to chose which companies their money is invested in and removes banks from their traditional role of taking in deposits on the one hand and making loans on the other.

It is also possible to donate to Crowd Funds to help create businesses for a non monetary perks and help young businesses get started.

Online platforms enable donors and investors to directly reach entrepreneurs and enable them to invest equity, lend money or support by donating money in return for non monetary “perks”, normally a pre-order of the product being made by the new business.

Other examples of Crowd Funding sites include Kickstarter, AngelList and Investedin.

There are two models. One in which the project has to raise the amount it states it needs within a stated time frame.  If the target is not achieved all monies are returned to the pledging investors.  The second model allows the projects to retain the money even if the target is not met.

Bank to the Future falls into the former category.

So what does Bank to the Future do?

The Online process enables entrepreneurs to initially Crowd Fund the finance required to start their business by raising equity.

There is the opportunity to donate money to projects in return for non monetary perks, such as pre-orders of new products and thereby assist the enterpreneur to start his business in a more socially responsible way.

Donating allows investors to increase their Social Capital through Bank to the Future. (Click to Tweet)

The Crowd Funding approach enables entrepreneurs and investors to work together on terms that all participants accept.  An investor cannot change the terms of a deal at the last minute to his advantage.

Later on as the business develops, the enterpreneur may have a better credit rating and be able to raise crowd funded loans from Bank to the Future Investors without having to surrender further equity.

What is the significance of the Crowd Funding Movement?

Since 2008 the difficulties small businesses have in raising capital or getting access to loans from banks have been widely debated.  At the same time the Government (both Labour and Coalition) have consistently taken the position that the SME sector, which accounts for 67% of jobs in the UK, is vital to the recovery of the economy as it has the potential to create hundreds of thousands of jobs.

While the Small Business Sector has more than pulled its weight, it has continued to struggle to get access to the capital it needs to invest.

The internet has proven to be a highly disruptive force in many industries – think of iTunes and the Music industry and Amazon, initially with books and now just about every other product category in B2C retail market.  There is no reason why financial services should be immune and with the continued development of online, disruptive business models emerging, market inefficiencies and the status quo are constantly being challenged.

So is Bank to the Future the new future of Banking? (Click to Tweet)

Full disclosure: I have no financial arrangements of any kind with Bank to the Future.

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.


Thank you for joining the Conversation.