First time listed company has raised equity through crowdfunding.
Wine-make Chapel Down has become the first UK-listed business to seek equity capital directly from investors via crowdfunding.
Chapel Down has plans to raise more than £1 million by selling shares in its business via crowdfunding website Seedrs.
Investors gulp down shares in wine-maker
Chapel Down has gone down the crowdfunding route in order to allow customers, as well as traditional investors, to participate in this offer by buying its shares via Seedrs.
Clearly, this ground-breaking approach seems to be working, as at the time of writing Chapel Down had raised £968,000 from more than 230 investors, almost 60% of its target.
This is an incredible show of support for a business that, despite being the market leader in English wines, only began trading in 2001. Then again, Chapel Down - which is listed on the ICAP Securities and Derivatives Exchange (ISDX: CDGP) - has been working for over a decade to change perceptions of English wine and build an internationally recognised brand.
The new funds will be used to satisfy the increasing demand for Chapel Down's wines, beers and ciders. The wine-maker aims to plant more vines, build a new winery, construct new distribution and storage facilities, build a brewery and a visitor attraction, and extend the hospitality at its headquarters in Tenterden, Kent.
Last year, Chapel Down successfully raised £4.35 million via a bog-standard equity issue at 17p per share. This enabled the firm to invest for growth and expand its workforce. As a result, sales have since soared by more than a fifth (21%) year-on-year.
Freebies and tax breaks for investors
Chapel Down has already raised £0.67 million from institutional investors on the same terms as those offered via Seedrs. Here's a breakdown of its ambitious fund-raising programme so far:
|
Offer price |
28p a share |
|
Target funding |
£1,667,506 |
|
Maximum funding |
£3,286,319 (11,736,855 shares at 28p each) |
|
Equity on offer |
6.48% (of total shares in issue) |
|
Current funding level |
£968,396 |
|
Funding level |
58.1%* |
|
Company valuation |
£24,076,999 (before this latest funding round) |
|
Minimum investment |
£10 |
|
Closing date |
No later than 17th September |
* At time of writing
As with many recent crowdfunding exercises, investors buying shares in Chapel Down via Seedrs get additional freebies on top of their shares. Although the basic bonus package begins at a mere £140, all those investing at least £560 (which buys 2,000 shares at 28p apiece) will secure a discount of a third (33%) on all Chapel Down wines and a quarter (25%) discount on all Curious beers and ciders, plus other benefits for as long as they own these shares.
What's more, all UK taxpayers that buy shares in this Chapel Down may be eligible for tax relief via the Enterprise Investment Scheme (EIS). Under EIS rules, investors may be able to claim back up to 30% of their investment in income-tax relief, as well as paying no Capital Gains Tax (CGT) on any gains made when they come to sell their shares in the years ahead.
In other words, buy now while stocks last - you have until 17th September at the latest to apply. More details of the offer can be found at the Chapel Down and Seedrs websites.
A word of warning
Before you invest in start-ups and small firms, remember that these shares are illiquid (meaning they are difficult to buy and sell), pay no dividends (the regular cash payouts to shareholders) and may end up losing you money.
So they are really only for experienced investors, rather than first-timers and inexperienced shareholders. You should buy such shares solely as part of a diversified portfolio of shares and other assets.
More on investing:
Beginner's guide to buying and selling shares