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Understanding our Due Diligence Process

How we vet our pitches

Diligence Checklist

We perform extensive upfront checks on every company that wants to pitch for funds on our platform. These include verifying details of the directors' backgrounds, carrying out a KYC/AML check on directors and reviewing the company's finances. We require evidence for every claim that a company makes in its pitch to ensure that every investor is in the best position to succeed.

Only 8% of companies that apply to pitch for funds on our platform make it through our rigorous vetting process. At Crowd for Angles, we will only place a pitch on our platform if we believe that the company is trustworthy, reliable, has true potential and we would consider investing in it ourselves (indeed, for many pitches some members of our team have done just that). While we don't endorse any pitches on our platform, we believe that our rigorous due diligence process will help you to feel confident in your investment. Here we outline our extensive process of checks into every pitching company.

We understand that our investors have put their trust in Crowd for Angels and we take this responsibility seriously. As such, we only offer financial products which meet our strict quality criteria. To read more about our due diligence process check out our “understanding our due diligence process guide” here.


Application Process

When companies first apply to pitch for funds through our platform we expect them to provide us with the company name, company number and company status, as well as information about directors and the nature and history of the business. They may also submit a website or other information, along with working contact details for their directors and their place of business. The information we request at this stage is preliminary, and we expect applicants to provide much more detailed information if they reach a later stage.

At this stage we check all the information companies have given to us against records held at Companies House and other reputable sources. For directors we also check to see if there are any red flags, such as bankrupted or dissolved companies in their backgrounds, and run an identification and credit check using LexisNexis

Career Growth

We always make every effort to meet each company pitching on our platform.  We're proud that we've been able to meet 98% of the businesses which have pitched so far.

For the companies that successfully pass the application stage, they are required to create a pitch for potential investors. For those which are not suitable for our platform, we make every effort to provide either an alternative fundraising home or provide constructive feedback that can help the business to progress in the future.

Are you a company looking for tips and tricks to survive your due diligence process? Here are five tips to get you started. 

Building the pitch

Career Growth

Companies now get the opportunity to build the final pitch that investors will see by completing up to 11 forms that are held on our platform.

At this stage, we ask applicants a detailed set of questions about their business. The information we expect is of significant detail and includes multiple questions in areas such as the company's growth potential, its team, products, competition, audience, finances, the risks involved, and the exit strategy, among others.

A pitch is a financial promotional, meaning any statements made on the pitch that are deemed factual require evidence. Evidence cannot include easily editable sources such as a company's website or personal social networks such as LinkedIn.

We will then perform checks on all the information provided. At this stage we will also exercise our judgment about the potential of the company's product and concept - while we do not endorse any pitch on our platform, we won't put a pitch online if we believe the concept is obviously poor.

Fundraising Information

With all companies, we require a set of up-to-date accounts and a balance sheet. Furthermore, we will check to see if there is any outstanding loan finance in the company and the terms of those loans.

To do list
Lists

Valuation

While we don't provide advice to companies pitching on our platform, we do offer guidance. In general, we are inclined to encourage companies to lower their valuations if they don't seem accurate to us. We will also offer guidance on their fundraising targets - companies may sometimes set their target too high, and we encourage them to avoid this.

Good valuations start with a full set of numbers that accurately record the past performance of the company and provide reasonable forecasts for the future. Make sure to provide evidence to support your claims.

Build your pitch like a pro!

Learn how

The fundraising period

During the fundraising period, companies will not be able to edit their pitches on our platform. However, dedicated investors can be assured that the information in pitches on our website is always factual. Once the fundraise is complete, we work with a legal firm who will undertake further due diligence checks on the company prior to the funds being released. All investors are kept up to date with their investment on our platform and can withdraw their committed investment up to 7 days after they have first made it.

Career

Risk Warning

Investment Risks

Investing in small public listed or private companies involves many risks, including illiquidity, lack of dividends, loss of investment and equity dilution. It should be done only as part of a diversified portfolio. Investing in debt pitches through Crowd for Angels (UK) Limited involves lending to companies and therefore your capital is at risk and interest payments are not guaranteed if the borrower defaults. Please click here to read the full Risk Warning.

Investor Suitability

Investments on this website are targeted exclusively at investors who are sufficiently sophisticated to understand the risks involved and make their own investment decisions. You will only be able to invest in pitches on this website once you are fully authorised and the investment is deemed appropriate for you.

Basis of Investment

Investments can only be made on the basis of information provided in pitches by the investee companies concerned. Crowd for Angels takes no responsibility for information provided by external sources, including investee company websites.

Forward Looking Statements & Forecasts

Pitches may contain forward looking statements and financial forecasts or projections. Forecasts are not a reliable indicator of future performance. Crowd for Angels makes no judgement or opinion of the likelihood of targets being achieved. 

Lack of FSCS Protection

Investments made in companies listed on the Crowd for Angels platform are not covered by the Financial Services Compensation Scheme (FSCS).

Tax Relief

The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and of the company concerned, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.

Innovative Finance ISA

Holding an investment within an innovative finance ISA does not reduce the risks associated with an investment or guarantee returns and it is possible to lose all of the money invested.

This page has been approved as a Financial Promotion by Crowd for Angels (UK) Limited (Company number: 03064807), which is authorised and regulated by the Financial Conduct Authority (Reference number: 176508). 

Crowd for Angels is for investors who understand their capital is at risk, learn more here.