Crowdcube launched a new flagship secondary product, the Direct Community Offer (DCO). "The DCO gives later-stage businesses a way of offering early investors a return on their investment while simultaneously giving new investors a chance to buy a stake in a business they believe in. The product solves the age-old problem of liquidity for early investors, which has been exacerbated by businesses staying private for longer, and represents an exciting next step in the evolution of investment crowdfunding.
While Crowdcube has previously completed secondary transactions involving single investors, such as those of Revolut (20x return) and BrewDog (1.8x return), the DCO now seeks to democratise this process, offering the shares of participating early investors to retail investors. The product will be open to European later-stage businesses looking for alternative ways to create liquidity. It addresses a key trend of companies, like Slack and Spotify, moving away from buzzy IPO listings to direct listings. The DCO connects three sets of stakeholders: entrepreneurs who wish to offer their communities a stake in their business, new investors via Crowdcube, and the current shareholders in the business who want to take up the opportunity to sell shares."
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