Pioneering UK crowdfunding business Crowdcube started in 2011 after its founders grew exasperated with the treatment of promising businesses by TV investors. Four years on and with tens of millions invested in growing firms, co-founder Luke Lang (on the right in the picture above) explains why the model has become so effective for investment-starved entrepreneurs.

Explain the concept behind Crowdcube

Crowdcube is the world’s leading investment crowdfunding site having helped (at the time of writing) over 235 businesses raise more than £80 million since 2011.

It’s a revolutionary platform that makes investing accessible, affordable and rewarding and enables businesses to take back control of raising the finance they need to start or expand their business, with the added benefit of being backed by the crowd.

Where did the idea come from?

My co-founder, Darren Westlake, and I have experienced the challenges of funding a business first hand and felt there must be a better way to raise finance. The idea for Crowdcube was sparked by the frustration of watching Dragons’ Den and seeing great business ideas fall by the way side if the Dragons didn’t buy into the pitch.

"If you can’t explain your business in one sentence it’s too complicated"

We also felt passionately about democratising investment and making angel investing more accessible for everyday people. So Darren and I launched Crowdcube, which enables businesses to pitch their idea to a wider audience, with everyone in the crowd having the potential to be an ‘armchair dragon’ and invest anything from £10 to more than £100,000.

How did the business develop?

Crowdcube has been at the forefront of alternative finance in the UK since its inception in 2011; we were the first equity crowdfunding platform in the world, the first to have an independently managed fund and the first to have institutional investors invest alongside the crowd.

With a history of firsts, we are determined to remain innovative and at the forefront of the market that has enabled Crowdcube to continually develop and maintain our position as market leader.

What was your biggest hurdle along the way and how did you negotiate it?

When Crowdcube entered the market we were challenging the status quo and introducing a new way for businesses to raise finance. As a result, we faced cynicism from those who thought crowdfunding wouldn’t work.

It was a hurdle we were able to overcome by surrounding ourselves with the right people, continued innovation and through dogged perseverance.

Having come from marketing and entrepreneurial backgrounds, both Darren and I didn’t accept that it wouldn’t work and thankfully, four years down the line, our determination has led to 235 businesses being funded and £80m being raised on Crowdcube to date.

Crowdcube's founders have achieved several firsts - all inspired by perceived bullying by investors on Dragons' Den

The alternative funding market seems to be exploding, is now a good time to be in the market?

Without a doubt it’s a good time. Businesses still have limited options when it comes to raising the funds they need to start or expand.

Venture Capital companies are extremely selective, both in terms of where and how much they’re willing to invest, and banks are still reluctant to lend, particularly to start-ups and early stage businesses.

Plus, we’re also seeing the market evolve with bigger businesses, such as River Cottage, JustPark and easyProperty, the latest venture from the easyGroup, embrace crowdfunding to raise finance. With this in mind, demand for alternative options for funding is at an all-time high.

Based on your experience, what’s your best tip for people seeking funding?

When pitching for investment you need to be clear about what makes the business unique and what the strategy for growth is. People are more likely to invest in a business if the proposition is something they are already passionate about or if it’s just too interesting or compelling to ignore, so if your business ticks one or both of those boxes you’re off to a good start.

If you’re seeking finance it’s important to be mindful that no investor wants to take on more risk than they have to, so the more tangible developments you can demonstrate, such as sales or contract wins, the better.

Lastly, investors will want to know about the potential for return on their investment, so you need to outline how and when this will happen.

Monthly team meeting time. The @Crowdcube team gets bigger and BIGGER! @dazwest is missed! pic.twitter.com/oiydl5ItHI

— Crowdcube (@Crowdcube) April 30, 2015

What is your golden nugget of advice of people starting businesses today?

Based on our experience so far, don’t be afraid to challenge existing conventions. Just because people have always done something one way doesn’t mean that it is the only or best way it can be done.

Once you’ve got a great business idea ensure you can communicate the proposition clearly using simple language – if you can’t explain your business in one sentence it’s too complicated. Then talk to as many people as possible about it, stick to your principles and be prepared work hard.

What does the future hold for Crowdcube?

At Crowdcube we want to continue inspiring investment every day and ultimately we want to be recognised as the Google of finance.

We’re working with bigger brands to bring a wider range of investment opportunities to the crowd and we’re continuing to develop new products from our innovative roots.

We’re also leading the charge in the alternative finance industry, which is continually demonstrated by our ever increasing crowd of investors, the growing list of funded businesses and our continued drive to move the industry forward with the development of Crowdcube’s proposition.