Crowdfunded equity refers to capital raised from multiple individual investors—typically via regulated online platforms—in return for an ownership share in a property development project. This funding model allows small to medium-sized UK property developers to access alternative equity without relying solely on institutional investors or traditional joint ventures. Investors receive returns linked to project performance, usually on exit through sale or refinancing. In the context of property development finance in the UK, crowdfunded equity can complement senior debt or mezzanine finance to complete a funding stack, offering flexible, scalable funding for schemes of varying size and complexity.
Within the funding structure, crowdfunded equity typically sits alongside other forms of Alternative Equity, often ranking behind senior and mezzanine debt but ahead of pure sponsor capital depending on the platform model. Its inclusion can broaden the investor base while preserving developer control, although it introduces additional reporting and governance requirements. In most UK structures, investor interests are aggregated and administered through a Nominee Agreement, allowing a single legal entity to act on behalf of multiple investors. This simplifies title registration and lender intercreditor arrangements, but requires careful structuring to align investor rights, exit mechanics, and profit distribution with the wider capital stack.
View glossary entry