Startups

Bar operator The Rushmore Group has secured a record-breaking crowdfunding investment of £1m via Crowdcube, the site confirmed today.

The investment – in a deal valuing Rushmore Group at £10m – is believed to be the highest total raised through a crowdfunding platform anywhere in the world. The previous record was achieved by US-based crowdfunding giant Kickstarter, which raised $942,578 in a single deal.

The Rushmore Group – which owns and operates three members’ bars and clubs in London, including Milk & Honey in Soho – attracted 143 investors in only four weeks, to fund the development of an 'exciting new venue' in central London in 2012.

Offering just 10% equity in exchange for the big-money investment, the business offered appealing incentives to potential armchair dragons – seemingly tailoring their rewards to existing customers and club members.

These included a £1,000 bar tab on a membership card for investors who contributed £5,000 to the fund. Similarly, investments of £25,000 were rewarded with a 10% annual bar tab ‘dividend’ in years four, five and six and all shareholders were entitled to lifetime membership of every club owned by the Group.

Furthermore, due to the high value of the investments, the tax reliefs normally reserved for angel investors came into effect. Consequently £5,000 investments received 30% in Enterprise Investment Scheme (EIS) relief (worth £1,500 to a UK taxpayer) and the same percentage EIS relief equated to £7,500 on £25,000 investments.

The highest investment previously raised through Crowdcube was £180,000 – achieved by botanical alcohol brand Kammerling’s in October.

Jonathan Downey, founder and director of The Rushmore Group, said: “We are delighted to have successfully reached our £1m target on Crowdcube. 

“Crowdcube is a powerful new way to raise business finance and this investment wouldn’t have been possible without its innovative platform. The Group’s immediate aim is now the acquisition, refurbishment and launch of a new site in Soho, London.”

Darren Westlake, co-founder and CEO of Crowdcube, added: “Raising £1m for a single business on Crowdcube is a fantastic achievement but not a surprise to us. 

“We firmly believe that raising finance using crowdfunding will transform the way businesses raise capital in the future. With over £1.4m successfully raised on Crowdcube for British businesses since July 2011, we are bucking the trend and proving that there is now an alternative way to raise business finance in the UK.”

Crowdcube said the site now has close to 6,000 registered members seeking investment opportunities.