New crowdfunding bank launches with Branson's blessing
Thursday 16th August 2012
Within hours of the FSA issuing a warning about ‘crowdfunding’ a new social network bank has launched.
BanktotheFuture, which has the blessing of Sir Richard Branson, will score people not by their credit ratings but by their social media profiles, including the number of their friends and followers, and their reviews and recommendations.
This week, the FSA said investors should beware of the risks of crowdfunding, by which businesses seeking investment look to groups of individuals for money, with amounts as low as £10. Investors then receive shares.
While the FSA said it can be an easy and low-cost way for someone to support a friend’s start-up business, it warned of risks, saying that investors could lose all their money as most new businesses fail. It said people should not invest any money through crowdfunding unless they were prepared to lose it. Crowdfunding ventures are not regulated by the FSA, although there does appear to be a collective investment aspect to them.
Now crowdfunding BankToTheFuture has launched, and made it into the top 50 of Sir Richard Branson’s global Virgin Unite ‘Screw Business as Usual’ ratings.
The new bank claims to offer an open, transparent way for entrepreneurs, businesses and investors to raise finance and invest in each other.
Laying claim to be the world’s first social media-driven financial institution, BankToTheFuture is making three types of financial offerings available – CrowdFunding, CrowdInvesting and, from next year, CrowdLending.
It says money will only be invested in products and businesses that seek to bring out new value and potentially create jobs in the future. It says investors will receive the interest on their savings and will see exactly what happens with their money.
Businesses are apparently already pitching for finance on BankToTheFuture.
CEO Simon Dixon said: “BankToTheFuture is a working model that is changing the rules of money and banking to show that there is a viable way that can serve people, entrepreneurs and businesses and make the funds available to those who have missions to do good through their businesses.
“At the same time we wanted to break down the restrictive costs and bureaucracy that investors used to have to go through when they invested in private businesses. Ordinary people can now invest in the country’s future businesses – a game that was previously only available to rich people.”
Sir Richard Branson said: “I like the goals of BankToTheFuture.com where everything is transparent and open and people can see what happens with their money. It is great that they are offering support to entrepreneurs and businesses who will create jobs in the future.”
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