Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20 VC FF 022: Crowdfunding Is Here To Stay with Ayan Mitra, Founder & CEO @ Crowdbnk About this episode Ayan Mitra is the Founder & CEO @ Crowdbnk, an investment crowdfunding platform that allows you to invest in high growth businesses through both equity and debt. Ayan himself has a background as an enterprise architect and technical manager, having worked with leading consumer companies including M&S, Orange and First Direct. He took his LBS MBA to follow his passion and launch CrowdBnk in 2011. Since 2011 Crowdbnk has raised nearly £20m for high growth startups. In Today's Episode You Will Learn: 1.) How did Ayan make his way into the world of startups and tech and start Crowdbnk? 2.) What is Crowdbnk, how does it work, what companies Crowdbnk raise for, what is their minimum investment etc? 3.) What are the key drivers of the massive rise of the crowdfunding sector? What effect will the recent SEC ruling have on global crowdfunding? 4.) With the greater and greater amounts being raised on these platforms, does Crowdfunding have the potential to replace VCs in the future? 5.) What are the greatest barriers to mass market adoption of the crowdfunding model? What have been the biggest challenges faced in the journey with Crowdbnk? 6.) How do crowdfunding platforms plan to draw investors away from funds and other portfolio based assets given the level of risk associated with investing in young companies? Items Mentioned In Today's Show: Ayan's Fave Book: Intelligent Investing by Benjamin Graham Ayan's Fave Crowdbnk Investment: Gojimo by George Burgess As always you can follow Harry, The Twenty Minute VC and Crowdbnk on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session you can follow him on Instagram here!
Transcript 0:00 Speaker 00 This is the 20 Minute VC. I am your host, Harry Stebbings, and today, following on from our fantastic episodes with the kings of seed funding, David Frankel and Eric Paley at Founder Collective, we remain in the early-stage funding environment, except today, we move into one of the most revolutionary and exciting spaces in alternative finance. It is, of course, crowdfunding. And joining us today is Ayan Mitra, the founder and CEO of Crowd Bank, an investment crowdfunding platform that allows you to invest in high-growth businesses through both equity and debt. And with regards to Ayan himself, he has a background as an enterprise architect and a technical manager, and has worked with leading consumer companies,
0:42 Speaker 00 including M&S, Orange, and First Direct. And having taken his London Business School MBA, he decided to follow his passion and launch Crowd Bank in 2011. But first, I would love to tell you about my favourite new app, Point, which not only allows me to send and discuss links simply and quickly, but my favourite is often, I only need my friend to read part of the link, in which case I can easily highlight the element they need to read, so they can see what I've quoted in a seriously beautiful UI, and I really can't live without it. So join me in conversation on Point, and head to getpoint.co to download the app and plugin. However, it is now time for today's show, so I'm delighted to welcome
1:25 Speaker 00 Ayan Mitra, founder and CEO at Crowd Bank.
1:35 Speaker 01 You have now arrived at your destination.
1:38 Speaker 00 Ayan, welcome to the 20 Minute VC and this very special episode of Founder's Friday. Thank you so much for joining us today.
1:45 Speaker 02 Thank you, Harry. Thanks for the opportunity. Good to talk to you.
1:48 Speaker 00 Now, let's get the ball rolling by hearing how you made your way into the world of startups, tech, and became CEO and founder of Crowd Bank.
1:57 Speaker 02 Well, my background actually is in technology, so I'm a software engineer by trade. And I started my career back in the mid 90s, writing the first internet banking frameworks for a bank called First Direct. So I have been around technology for a long time and then I was helping a lot of startups. From a technical consulting pers- perspective. And I find myself in New York when Kickstarter launched back end of two thousand and nine. Early twenty ten and that sort of gave me the idea that. There was a, there was a place and role for a regulated digital investing play. Uh, which is where the sort of ethos of Crowdbnk comes from.
2:38 Speaker 00 And how do you think then the, the crowd funding environments differ between the US and the UK? Obviously Kickstarter is a massively different. Um, method of investing with the gift pledging instead of the equity returns that Crowdbnk offer. But how do you compare the two environments?
2:55 Speaker 02 I think there, there's three elements um to that question, uh, uh, if I may. So I think one is. Look Kickstarter made um the concept uh popular. And obviously crowdfunding is quite a wide ver- word and there's very many, many types of it. Whether it's Kickstarter, whether you do pledging, whether it's um regulated crowdfunding, which is where Crowdbnk is in. Or whether it's been philanthropic capital like Kiva, they've been going for, for uh quite, quite some time, very successful. So um, so it really, it really depends um which part um of the crowdfunding uh sector you, you're sort of looking at. But uh generally, it, it's not, not a secret that US venture capital and sort of early stage.
3:41 Speaker 02 Uh, investing is a lot more popular than, than in the UK and Europe. Um, as a result, whilst crowdfunding and sort of regulated based crowdfunding. Which you might have seen, the SEC has just finally a- approved the, the final piece of that, of the Jobs Act.
3:59 Speaker 00 So then how do you think the implementation of the SEC's new Jobs Act will, will affect the, the overall crowdfunding environment?
4:07 Speaker 02 I think, I think it's a, it's a very positive step, not so much because of what the act actually is. Because I think it's been greatly diluted from the original principles of when it was proposed. But what it sort of signals to the market about the fact that the alternative finance industry and crowdfunding is here to stay and is going to become mainstream. Um, if, if you look at the crowdfunding as sort of uh growth across the world, then I think you'll find UK is actually leading. The market in that way before SCC, we've been around and uh growing tremendously um in, in the last three years. And the FCA uh has been quite proactive in actually having a conversation to allow that innovation to happen.
4:53 Speaker 02 Uh but, uh you know, um, America is, is, is huge in terms of the amount of um capital it represents and the amount of uh businesses that come out of it. So the, the SCC ruling will definitely help, but I think um UK has already um. Showed that it can beat America in this instance, not that it's a competition or anything, but uh. Uh, and I think uh that, that will carry on happening because I think we, we are, we are truly innovators in this space.
5:23 Speaker 00 And we mentioned that obviously the rise of crowdfunding uh in recent years, in particular, it's become a, a, a global phenomenon really. So what, what would you say the key drivers are of, of the rise of crowdfunding in this sector as a whole?
5:37 Speaker 02 I think uh my, my personal opinion on this is if you look at uh all other industries. And you've seen technology come into those industries and, and, and change the way. The whole ecosystem works and whether that is um, you know, Amazon when it started with books or. Um bidding with um eBay and payments with PayPal, uh but in financial services per se. Bar the ATMs that were innovated sort of mid nineties, uh mid, mid eighties, I believe. Um. Nothing really has happened. So all the financial engineering that went on was was product engineering rather than leveraging technology to actually improve the service.
6:20 Speaker 02 Crowdfunding and alternative finance in general is the first wave of changes that you're seeing where technology is being brought to bear on these on these um uh systems.
6:31 Speaker 00 Um.
6:31 Speaker 02 And the benefit is actually going down to the to the marketplace, to to the investors, to the businesses. So I think um, given the fact that there there is technology that would um make transactions a lot more efficient, transparent, quick, uh uh that it was it was a matter of time before something like this happened. And I think this is uh this is perfect. And I think the economic crisis in two thousand and eight perhaps pushed it along a little bit when uh traditional credit uh was sort of squeezed out. But um if this would have happened regardless of the two thousand and eight crisis or not.
7:09 Speaker 00 Sure. And and let's talk then a little more specifically about about you and Crowdbnk. So for those of our listeners who may be armed aware, can you give us a bit of background on Crowdbnk? How you work, what type of companies you raise for and say what's the minimum investment?
7:23 Speaker 02 Sure. So um at at Crowdbnk, we basically um look to raise growth capital uh for businesses through equity and debt. Um. And our core focus is we actively go and do diligence the company, we structure the deal, we price it, um so that's valuation and coupon rates. And we in invest alongside the investors who who might be investing on those deals uh on our platform. And our philosophy is pretty much that um we need to have skin in the game to be able to stand behind uh the structure and the pricing before we take it out to investors. And that's kind of uh our approach, which is slightly different from a a just a pure marketplace, which is a lot of the operators are in.
8:05 Speaker 02 Uh in terms of minimum and maximum, um I I can tell you looking forward what's um what's our focus. I think for equity investments, you know, we we we are looking at half a million to about three million pounds, that's sort of the range. Even though our sweet spot is just about a million pounds. And for debt, uh whether it be asset backed or unsecured, you're looking a range between sort of. Uh a million to to five million, that's sort of the range. Obviously, we do, we have done more and we have done less. But that's more or less um the the the deals we focus on. From an investor perspective. Uh there isn't actually a sort of a technical um minimum requirement, I mean, it could be as low as ten pounds, but.
8:50 Speaker 02 As we always discuss, this is investment, it's it's not not gambling, it's uh so you should be doing um. More significant amounts you should be doing on a diversified basis, so you know, you you you should be looking to commit. At least ten thousand pounds a year for it to make any difference to you. Of course, you need to be able to afford to lose it, so I have to add that.
9:13 Speaker 00 And how do you approach valuations then? I mean, it's a much talked about topic, uh and there's been. Quite a lot of controversy and discussion amongst uh some crowdfunding platforms uh regarding valuations. So how do you approach it at Crowdbnk?
9:28 Speaker 02 Uh so valuation is a is a very interesting interesting one. So I I did a I did a valuation uh. Course at NYU taught by Ashwath Damodaran and he's he's for for a lot of people considered the guru of valuation. And I always like to borrow the way he thinks, so he kind of sees valuation in two types. One is intrinsic valuation, which is which is. You're trying to uh create value and therefore um. Uh that value, even even the multiple distribution of cash flow modeling, um you come up with a valuation, um and you discount it for time and risk. And you get up with a number. And the other one is sort of momentum based valuation, which is um and and don't get me wrong. This happens in the stock market as well as private markets. So so just so you know.
10:13 Speaker 02 And there, um you know, you the the price is what somebody's willing to pay for it. Um. Our approach at Crowdbnk is we we go after intrinsic valuation. Because even though it's actually quite difficult sometimes for early stage companies, you may not have all the data um at your disposal to be to to be able to come up with something very accurate. But but our view is that, given these are early stage companies, uh it's ac- actually crucial that the investment happens at a sustainable value such that investors can make money. And what I mean by that is if if even if a company were to be hugely successful, if at the stage we are getting involved in, the valuation is perhaps skewed,
10:58 Speaker 02 then by the time a a a institutional investor decides to get involved who will intrinsically value this, then the early investors will lose out and we don't want that.
11:07 Speaker 00 And and you mentioned there that in terms of investment for the companies themselves, you have a kind of naught point five to three million sweet spot. And as you get to the higher end there, we're seeing obviously more and more money raised on platforms like Crowdbnk. Uh and many have suggested that this has the potential to replace kind of the more traditional V C funding. What are you what are your thoughts on this as we grow the crowdfunding platform to raise more and more money for companies? Do you think these systems are competing?
11:37 Speaker 02 Um. In in short, I don't think they are. I think, look, the ecosystem is evolving. And actually, there is room and requirement for both types. Um. V C's have been around for ages and and V C's are sort of classed as, you know, a capital pool with discretionary decision making to invest in companies. I think they have a very, very important role and they will remain remain there. I think what what I think will happen, and there's early evidence of that, that they will start to work together. Uh in collaboration, uh because I think it's very clear uh from our experience in the marketplace. That investors like institutional uh investor to be involved in the same round.
12:17 Speaker 02 And if you flip the uh on the other side, um sometimes uh even a V C might actually benefit from diversifying the investor base. A typical example is we just finished raising uh money for Gojimo, which had index ventures as their principal investors um. Uh in the earlier round and part of their next partners uh followed on in the round that we did.
12:39 Speaker 00 And that's that's George Burgess, isn't it?
12:41 Speaker 02 That's correct.
12:42 Speaker 00 Yeah, fantastic, amazing story, uh and fantastic Gojimo app. Uh must check that one out, anyone who hasn't, by the way, really is brilliant. Um so so that was, would you would you say that's one of the most kind of exciting companies you you for you personally on the platform? I know that's like asking you to choose one of your favorite children, I always.
13:01 Speaker 02 I I I enjoyed um working with George, I think I think he is a hugely uh impressive young man. And I think what he's achieved so far and and his growth trajectory is and and in industry is in and. Uh you know, uh as I uh this is not a recommendation, my personal, as me as a personal investor in it. Um I think that I'm I'm tipping that for for for a unicorn, so we'll see, we'll see if it gets there, but I think, yeah. But I would say it was one of the most exciting to work with.
13:30 Speaker 00 And we we talk about kind of uh companies that raise on crowdfunding platforms and obviously because it is the crowd. Yeah, and you've seen a huge amount of um raises go to the crowd. What makes companies successful on crowde- crowdfunding platforms? I mean, is it much harder to raise for an enterprise SaaS startup than it is for a consumer food startup?
13:51 Speaker 02 I think um there is some evidence to suggest that um easy to understand products generally tend to do better. Uh in terms of um the retail crowd getting involved.
14:03 Speaker 00 Is that another reason for the continuing existence of V C's then?
14:07 Speaker 02 Uh you could you could say that, but but I think for us on our platform, I think we've done, we've done some B two B. And then our our investors generally tend to be. Sophisticated and they would look at it as on a on a investment by investment basis. But generally, a a long tail retail crowdfunding, you would you would need the idea to be. Easily understandable and that's the reason why um big consumer facing brands um. Might end up going down this route more often than not. Uh which we haven't seen yet, so so really big brands brands still haven't picked that up, but I think they will.
14:43 Speaker 00 And what would you say then are the the greatest barriers to the to mass market adoption? We said about the rise earlier. And it has risen phenomenally, but I I wouldn't say it's, you know, fully adopted by the mass market. Uh so what do you think is are the barriers to this happening? And what challenges do you think, you know, you face in the industry?
15:04 Speaker 02 So I I absolutely agree. I think I think this is a very, very nascent uh industry and and just thinking about the numbers. In the UK, the debt market is hundred and sixty eight billion pounds. Uh so so you you can see the entire of crowdfunding in the UK. Uh it would is is is less than ten billion, I mean, depending on whose numbers you go by, but. But it has grown and it has all the potential of becoming uh mainstream. Uh but it's it's very small compared to uh the size of the financial services. Um I think challenges, I I think awareness is one, and awareness, what I mean by that is.
15:43 Speaker 02 You know, disrupting the uh traditional incumbents in terms of financial services, what I mean by that is big funds, banks. And even uh to some extent, some VCs who who do not want to collaborate. I think the the numbers are far bigger and they have a lot more muscle and firepower to actually um, you know, gain share of mind. Whereas crowdfunding platforms in general, and that is changing as they are getting capitalized themselves, don't have that sort of a budget. Um to to actually compete for a. Uh, you know, the retail, the mindshare, which unfortunately, not a lot of people actually read Financial Times. They're they're rather mainstream. So that's that's one of the things, awareness. And the second one is, I would say, regulation.
16:28 Speaker 02 We've been very lucky in the UK to have a proactive regulator who has worked with industry. But with every industry, you know, there's a there's a there's a hype curve and eventually the market corrects. I I I would I would go as far as to say we're in the hype curve now. I think there will be a market correction. It regards to either some investors losing money because of deals not being structured properly or mispriced. Or or what may be. And and I hope the regulator doesn't overreact. And and shut parts of the market out. That's the risk to wider option because otherwise you end up creating exactly the the problem we're trying to solve. The the the democratization of finance, it won't really happen without the retail crowd.
17:12 Speaker 00 And do you think a very large exit coming from the crowdfunding space, which we haven't seen seen yet, really, have we? We haven't seen kind of a unicorn emerge from crowdfunding. Well, I suppose we've had Oculus, um, but but that was obviously pledges, not actually crowdfunding. So so when we get that big exit, which I'm sure will come in the, you know, next few years from a crowdfunding platform. Do you think that will bring a mass of people into the sector?
17:37 Speaker 02 I think I think having a track record will help. Um, and it's very easy why it hasn't happened because, you know, on average from seed to IPO, the the tenure of of of company or how long it takes has actually gone up. It used to be around five to seven years, and I think it's actually north of nine now.
17:56 Speaker 00 It's nine point eight.
17:57 Speaker 02 Yeah, exactly. So so I think you can see that it'll take some time before people get track record. And I think, uh, once that happens, then then it'll become a little bit more mainstream.
18:08 Speaker 00 Yeah.
18:08 Speaker 02 But, you know, we shouldn't discount the fact that we're also trying to change consumer behavior here. So, you know, it'll take time for people to be comfortable to start investing in. Smaller companies, uh, uh, and, and, you know, it's a good opportunity for wealth creation, but it comes with its risk. Uh, people need to be educated about it, they need to understand it. But once they do that, this presents a, a lot more, uh, efficient, transparent and cheaper way of actually exposing yourself to the, this asset class.
18:38 Speaker 00 And then talking of consumer behaviour, how do you as a crowdfunding platform at Crowdbnk? Plan to draw investors, uh, away from funds and other portfolio based assets? Given the le- level of risk associated with investing in such early young companies?
18:55 Speaker 02 I think, I think there's two elements to that. Given what we do, and that includes us and others in, in the sector. Our costs of operation is a lot lower, are a lot lower. So, so we, we are far more efficient uh, in processing transactions of any asset class, frankly. Uh, we happen to be in a, in a, in a sort of early stage growth capital because that, that's where the funding gap is. But, uh, by being more efficient, we are actually distributing value back to people who invest through us. So. You know, if you, if you are an investor trying to get exposure to asset X, um, you can go and pay. A fund manager a lot of money to actually get that exposure, or you could try and use platforms like ours. And I think.
19:37 Speaker 02 What we are finding is, um, we are actually getting quite a lot of that share of the wallet as it moves. Uh, and, and these people on our platform, they are fund managers in their daily life and they appreciate the value that we bring. So I think. There's a strong, uh, pull because of efficiency and transparency of these investors coming and using direct investing platforms.
19:59 Speaker 00 And then if it's okay with you, we're gonna dive into a quickfire round now.
20:02 Speaker 02 Sure.
20:03 Speaker 00 So your favourite book and why?
20:05 Speaker 02 Well, uh, I have lots of favourite books, but the one that I think, uh, I, I would mention in this context is. A, a very old book by Benjamin Graham called Intelligent Investing. And, um, um, uh, if you haven't read it, I would thoroughly recommend it.
20:20 Speaker 00 Okay.
20:21 Speaker 02 Because, uh, because, you know, the reason I got into it, because I think Warren Buffett quotes that book all the time. And I don't need to say how Berkshire, Berkshire Hathaway performed against the S and P.
20:32 Speaker 00 Absolutely.
20:33 Speaker 02 He's, uh, he's the guru, but, uh, but it's, it's a very good read and, and that, that's, I've taken quite a lot of my investing one on ones from that.
20:41 Speaker 00 And then war chest or planned capital injections for startups, which which side do you fall on? Should you raise a lot more if you can?
20:49 Speaker 02 I've been asked this question a fair few times, and I don't think there's a zero or one answer. I think it really depends what you're doing uh as to what your um route should be uh and what the market's doing. So, you know, if if you are trying to compete with Uber without a war chest, you're wasting people's money and your own time. Uh however, if you are, so you know, if I summarize that, it's a technology-enabled consumer-facing services. I think more and more people are going down the war chest route.
21:19 Speaker 00 Um.
21:20 Speaker 02 Uh and if you want to play in that space, you kind of need to have that or access to it. Whereas if you're in a in a market where there it's always going to be a multiplayer market. And you you have a very key planned stages by which you can get better valuations. Then one might say that, uh you know, you're better off doing that because you'll dilute less. But, you know, trav- traversing the entrepreneurial journey at Crowdbnk, I I would kind of say that, you know, raise as much money as you can.
21:49 Speaker 00 And then company company funded by Crowdbnk that you're most excited about. I know we spoke about Goji Mo, maybe another one that has been on the platform that you were very excited about.
21:58 Speaker 02 Um, yep, there's a there's a company we funded in two thousand and fourteen called Breezy. Uh it does, uh it has a software layer that goes on Android uh devices and simplifies the user interface for for for people who perhaps are not all fair with the the internet, the older generation.
22:17 Speaker 00 Um.
22:17 Speaker 02 Uh and they are a very exciting business and they've grown from where they were when we invested both in terms of value and team. And they've now been invested in by a V C in the U S and they are one of our stars in the portfolio there. I have actually seen the valuation go up.
22:34 Speaker 00 Um hum. And then your favorite blog or newsletter?
22:38 Speaker 02 Um I really like uh reading a very short blog that Seth Godden writes. He's a marketer, he's he's very readable and very home truths, uh so yeah.
22:49 Speaker 00 That's amazing.
22:50 Speaker 02 Yeah.
22:51 Speaker 00 Uh and then the next five years for you and for Crowdbnk?
22:56 Speaker 02 Well, well, our, our vision at, at Crowdbnk and kind of my vision is that in the next five years, we'll be supporting UK SMEs with a billion pounds of growth capital every year. That's where we want to be.
23:11 Speaker 00 Okay, absolutely. And, and thank you so much, Iron, for coming on the show. It's been an absolute pleasure chatting to you today and I'm so grateful for you for giving up your time.
23:20 Speaker 02 Thank you, Harry. Thank you for the opportunity.
23:21 Speaker 00 What an amazing episode with Iron that was and a huge thank you to him for giving up his time today to be on the show. And you can see the current investment opportunities on Crowdbnk by heading to www.crowdbnk.com. The only thing to remember, with Crowdbnk, there's no A in bank. But before we leave you today, do not forget to check out the Point Chrome plugin. With the plugin, you can share any page just by at mentioning a friend. A chat dialog will then pop up in the corner, very similar to a Google chat, and you can comment right there on the article itself. All of this is built into your browser, so it's not another site to visit or another network to sign up for. It's a really easy install and ready to go in under 10 seconds, I'd say.
24:07 Speaker 00 And you can join me in the conversation there by adding me on my Twitter handle at Harry Stebbings or my name, Harry Stebbings, or my email, [email protected] . I would so love to see you on the platform and you can head to it by going to getpoint.co. Thank you so much, as always, for your continued support. We so appreciate your feedback. And you can follow us on Twitter by following at 20minetc. Thank you so much and we look forward to seeing you in the next week's very exciting feature of the one and only Balderton Capital, so stay tuned.
Previous 20 VC 089: Eric Paley @ Founder Collective on Outliers, Inspirational Founders and Pro Rata Next 20 VC 090: Balderton Capital's General Partner, Suranga Chandratillake on What It Takes To Be A Great CEO Page updated October 26, 2026 · transcript and summary are machine-generated
