IF you’re a Jersey-based entrepreneur with a great idea, where do you go to meet the people who can fund the business you dream of running?
Or, on the flip side, if you’re an investor sitting on capital and looking to back the kind of business ideas that excite you, what’s your starting point?
Digital Jersey chief executive Tony Moretta says that the government-backed body has long acted as a kind of ‘informal dating agency’ to match the right investors to the right businesses in the Island.
And with the launch of Springboard.je this year, in collaboration with Jersey Business, the agency is looking to formalise that work and create an online platform to allow investment to flow.
Mr Moretta said that the platform would at first be supporting two types of investment – modern crowd-funding and the more traditional model of equity ownership.
‘When Springboard.je launches, you will be able to register both as somebody who is looking for investment and as somebody who is an investor. That will build up a community of investors, start-ups and people like that,’ he said.
‘There will be two types of funding – first rewards-based crowd-funding and then there’s equity investment.
‘If it’s rewards-based, someone says you helped us get the company started and you’re supporting the product, so for every so much you invest in the company, you’re not getting shares or getting equity but you get X amount of product.
‘You typically see this with things like software. For example, if you funded the development of a new piece of software, you would get a permanent licensed-free version of it with upgrades and everything. With rewards-based crowd-funding, you can sign up and make your payment online.’
Mr Moretta said that equity funding could not be done online at this time, but would be targeted at high-value projects more suited to close engagement, adding that Digital Jersey, using Springboard.je, would ‘make the introductions’ .
‘The other type of investing we will launch initially is the more traditional equity investment,’ he said.
‘If you were in the UK within set parameters, you’d be able to actually do the equity-based transaction online as well. We can’t do that at the moment with the regulations we have, but we don’t think that’s going to cause a problem because people will still be able to set out their stall on the platform,
‘What will happen with an equity investment is if you are an investor and you’re interested enough in what you see online of an investable opportunity, we will make the introduction.
‘Likewise, if you’re an investable opportunity, you agree to the terms and conditions and Digital Jersey will present your information and we’ll give people your contact details to make the introduction.
‘The reality is for sizeable investments it’s not going to be done online and you’ll want to meet the company to chat through the business case.’
Mr Moretta added that work carried out by Digital Jersey with Jersey Business and tech start-up consultancy Infinite Lightbulb had identified it was currently more difficult than it should be to win investment in Jersey within a certain financial bracket.
‘We did a review of what funding is available based on the sort of idea, size of the company, and the stage of the company life cycle,’ he said. ‘For example, if you’re already a successful company and you have security, you can go to a bank. If you’re a complete start-up and you don’t have any security, don’t have any track record and don’t have a product, the bank’s not an option.
‘One of the things we found from that is there were some gaps. Probably if you want a couple of thousand pounds, you could get that from family and friends or do your own thing. If you’ve got a really good idea and a proof of concept, then if you’re looking for a £100,000 to £200,000 that was fine.
‘We found a gap from a couple of thousand maybe up to a hundred thousand, where it was very difficult to access funding.’
He explained that there was limited appetite from the Government of Jersey to address this gap, so Digital Jersey has decided to step in.
‘Typically when a lot of people raise funding they will go through a government scheme, which we don’t have here, or they will go through tax-incentive schemes with the potential investors, which we also don’t have here,’ he said.
‘Quite often they will go through third-party crowd-funding platforms, most of which don’t work here because we have a different regulatory jurisdiction.
‘With all of these different things in mind, we thought: “How do we develop a platform which makes it easier for us to support more start-ups and makes it easier for us to connect investors and opportunities together in a more sustainable platform?” There are people that come to us and say can you introduce us to investors? And we know informally what sort of investors are out there and what sort of things they invest in.
‘We’ve had this network and things going on already, but we’ve never formalised it. So, what we’re putting in place is Springboard.
‘We’ve already acted as a bit of a dating agency between investors and start-ups already. This just automates it and gives it a proper platform. It’s the sort of thing people are already used to seeing in other environments.’
With the platform due to launch in the summer, Mr Moretta said that Digital Jersey and its partners would be looking to provide advice and support to start-ups that want to list with them.
‘Companies will get the support of Digital Jersey and Jersey Business and Infinite Lightbulb,’ he said.
‘If they come to us and say we want to put this on there, we might say to them this isn’t quite developed enough, or go out to the following people before you put it on the website.
‘We can help them and support them to get it on the platform.’
Once Springboard.je has launched, a further function that is being planned is the ability to crowd-fund certain community or charity projects too.
‘The other possibility we have, because it links into the rewards-based aspect, is for charitable projects,’ he said.
‘We don’t think we will need it for general charitable giving because there’s lots of ways of doing that already. But let’s say there’s a community project and somebody says I’ve got a bit of land here and I think the community here needs a children’s playground, so I’ll donate the land. Somebody then comes along from a local community group and says we need to raise X thousand pounds to build that. It would be a very specific project where they set an amount of money to be raised and there is the functionality within the platform to be able to do that.’