Private investor network Envestors has announced the launch of Envestry for Scale-Ups, a stand-alone equity crowdfunding platform, which it expects to resonate with institutional investors and high-net-worth individuals, as well as the companies themselves.

“There is a growing appetite among institutional investors and high-net-worth individuals for investment opportunities offered by high growth companies,” Scott Haughton, Envestors’ chief operating officer, tells PBI. “With attractive tax benefits offered under the Enterprise Investment Scheme, the opportunity to get involved in the business to help shape its future, we expect this to continue to grow”

This may be at odds with the advice of leading private banks who believe a prudent approach is the safest way to go in 2019, owing to the uncertainty that promises to dog the financial world in the immediate future. Haughton though believes Envestry offers a safe enough space, should investors wish to diversify their portfolios in this area.

“Envestry for Scale-Ups offers investors a secure place to evaluate potential investment opportunities,” he tells PBI. “Due diligence is incredibly important when making this type of investment as it is high on the risk scale.

“Envestry was designed specifically for the sophisticated investor to facilitate this process and includes features such as deal tracking, company Q&A, and portfolio management.”

Mark Haughton Envestors
Mark Haughton, COO of Envestors

Crowdfunding control

The platform will be the first, according to Envestors, to offer start-ups and scale-ups full control of their own crowdfunding platform for the duration of the growth phase, typically three to five funding rounds. It will also offer power over timescales, branding, investor data and subsequent raises.

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A statement from Envestors said: “Fundraising for growth businesses has always been challenging. It’s time-consuming, expensive and there are no guarantees of success. Exacerbating these challenges are complicated regulatory requirements that prevent businesses from promoting their investment opportunities to more than 150 people.

“Until now, that has meant that businesses have to work with a middleman to raise funds.  In exchange for support, companies sacrifice control, typically over campaign length, branding and ownership of investor data – which is crucial for subsequent funding rounds.”