Investor Commission – A New Revenue Stream?
Most investors interested in the emerging crowdfunding industry know about Crowdcube, the UK-based equity crowdfunding platform that has recently been gaining in popularity. However, what many investors do not know is that Crowdcube offers an affiliate commission program for Angels and VCs who hate turning away promising companies due to small target market size, early stage of development, or low potential ROI. Is this a new revenue stream for investors?
Affiliate partner investors have the ability to create a “partner portal” for their organization or participate in a direct referral relationship with Crowdcube. Partner portals are co-branded platforms powered by Crowdcube that allow organizations and businesses to build their own crowdfunding community.
There is a 20% revenue share agreement with Crowdcube, leading to the potential for an alternate revenue stream that could be utilized by banks, venture capital firms, angels, accountants, or financial consultants. Alternatively, investors may directly refer entrepreneurs seeking capital to Crowdcube and expect a similar revenue share arrangement.
Using this business model, angels and VCs could regain a portion of the opportunity cost that naturally comes with strict screening criteria. Unfortunately, there could be grave adverse selection problems should investors refer low quality companies to Crowdcube.
Take a look at the affiliate partner information or a sample partner portal. Do you think these types of investor affiliate programs will be implemented by equity crowdfunding platforms in the US? Will you take advantage of them?