Crowdfunding first as local council backs music technology start-up Haystack
Lancashire County Council invests £3,000 in local business via equity crowdfunding platform Seedrs
Lancashire County Council (LCC) has marked an industry-first for crowdfunding by investing £3,000 in local music start-up Haystack, using equity-based crowd platform Seedrs.
The investment, which forms part of LLC’s £100,000 pilot project designed to support local entrepreneurs, sees it become the first public body to use crowdfunding to invest in a business.
Lancashire based Haystack, founded by Ryan Edmondson and Josh Dring, is looking for £29,000 to develop its music search engine offering in return for a 12% equity stake.
The council’s backing contributes to its ongoing Seedrs pitch with 25% of its funding target achieved so far.
The investment marks a continued breakaway from traditional methods of raising finance for the local council, having previously invested via another alternative model, peer-to-peer lending service Funding Circle, to back local businesses.
With crowdfunding’s growing popularity as a source of capital, LCC’s move to the ‘crowd’ is said to create a precedent for other national and local bodies to follow. As LCC county councillor Jennifer Mein discussed:
“Peer-to-peer lending is a fast-growing form of business finance and we hope our partnership with Seedrs will inspire other councils to look for new ways to fund businesses in their area.
“This is a forward-thinking way to bring new finance into business by unlocking some of the real or perceived blocks to accessing appropriate growth funds.”
Seedrs CEO and co-founder, Jeff Lynn, echoed Mein’s sentiment:
“We hope that Lancashire will be the first of many county councils and other government departments that will embrace this very direct and transparent way to support British start-up businesses that can make such a key contribution to economic growth.”
To find out more about crowdfunding, visit our dedicated crowdfunding channel.