Gill Oliver talk to business founder about her funding model plan to expand her venture

The old Beatles song With a Little Help From My Friends may be a bit of a hippy throwback but it’s fast becoming an anthem for modern-day entrepreneurs.

Among them is Steph Croft-Simon, from Headington, who will be looking for lots of new online friends to help raise £100,000 for her firm Nom Foods when she goes live with a crowdfunding bid on crowdcube.com this week.

The 27-year-old didn’t go down this route after failing to find the cash elsewhere but made a conscious choice to use the internet site because it fitted with her ethos.

She explained: “I like the idea of lots and lots of people becoming involved and buying into my brand.

“And for investors, crowdfunding is becoming a popular way of having a piece of something that interests you.”

In some quarters, crowdfunding is still seen as the place for sob-stories, such as those who need a life-saving operation but can’t afford it, or struggling artists and writers. That’s an old-fashioned view, according to financial experts, who say platforms such as Crowdcube, Crowdfunder, Funding Circle and Kickstarter represent a serious opportunity for people to invest in something they feel good about, while also seeing a return.

Stuart Crook, a partner with Oxford-based accountants Wellers reports his firm is seeing a growing number of business people who want to raise cash via crowdfunding.

He said: “Through crowdfunding, an entrepreneur can pitch to a larger crowd, which allows them access to finance more easily than in the past.

“With those bigger audiences, the likelihood of people putting in £1,000 here and there is far greater and it soon mounts up.”

To protect investors and their reputation, crowdfunding sites have a number of hoops for entrepreneurs to jump through before they can send their offer live.

It has taken Ms Croft-Simon four months to put together the pitch, including a business plan and video.

She said: “You have to do due diligence and provide data to back up all claims you make, because Crowdcube has a team of lawyers who go over it all with a fine-tooth comb.”

The pitch will last 45 days, during which time she can increase her offer, keep it the same but not decrease it.

If the target amount is not reached within that set period, she will receive nothing.

As for investors, in return for parting with their cash, they will be offered shares in her Garsington-based firm, a life-long discount and/or free food bars.

Using their cash, she plans to scale-up the business by taking on more staff, launching new products and building on the success she has already had.

She believes investors will be swayed not just by what she says is a sound financial bet but also by its ethical stance, as the food bars she produces are organic, dairy-free, vegan and use only Fair Trade ingredients.

The Nom bars are already sold by online grocery retailer Ocado and will also be stocked in 380 Holland and Barrett health food shops from the end of this month. They are also on sale in Planet Organic’s six London shops, the Wholefoods chain of nine shops and Oxford Organics cafes in Friar’s Entry and Botley Road.

So will investors get their money back if they back Nom Foods?

“I have a very specific plan for the business and an exit strategy, so people will get a return on their investment once it has reached its full potential and sells,” she explained.

Stuart Crook believes there are hard-headed reasons for investing and says traditional sources of finance, such as banks, tend to be quite supportive of this new online upstart. He added: “In general terms, crowdfunding is good for the market. Rather than replacing anything that’s out there, it’s supplementing it and allowing people that maybe don’t fulfil bank criteria and giving them a better route to finance. More banks are suggesting to entrepreneurs ‘maybe we can loan you a certain amount of what you want and you can raise the rest via crowdfunding’.

“In terms of investors, we also see a lot of people who have been getting very little interest on their cash, so the fact they could get a ten per cent return on a crowdfunding venture, as opposed to just one per cent on another option is a factor.

“The rate of return is much higher, although riskier but for many, it’s just another part of their portfolio so they’re happy.”

As for Ms Croft-Simon, she sees crowdfunding as a chance to kill two birds with one stone by using the CrowdCube campaign to let more people know about her business at the same time as raising the capital she needs. She added: “It’s at the stage where I need to really push the business.”