Member Article

Organic Hospitality is a crowd pleaser as it turns to crowdfunding to raise capital for expansion

Organic Hospitality, the specialist marketing agency, is taking advantage of crowdfunding, the new means of raising capital in the interconnected age.

Graeme Kerr, the Glasgow entrepreneur behind Organic Hospitality, has teamed up with Crowdcube, the market leader in raising business finance through online investments which recently raised £2 million for TV’s Kevin “Grand Designs” McLeod.

He aims to raise £150,000 within 60 days to establish and grow Organic Hospitality as a specialist marketing agency offering a range of on and offline services to the four and five star boutique hotel and tourism market in the UK and abroad.

The new venture is already acting for prestigious hotels such as Mar Hall and Sherbrooke Castle and last year undertook a large branding and web design project for St Andrews.

Kerr, who has an in-depth background in the hospitality industry, opted for crowdfunding because of the opportunity it provides for like-minded individuals to invest cash - as little as £10 and as much as the full £150,000 in his case - in return for discounts off the company’s services and a stake in the business.

He said: “I considered the normal funding routes for Organic Hospitality, but they didn’t fit the bill. Angel investors wanted too big a stake in the business and I didn’t even want to consider the bank route these days.

“Crowdcube has demonstrated that entrepreneurs can access funds that previously have been inaccessible and that investors can look forward to getting in on the ground floor of growing businesses and reaping potentially great rewards.”

Investors can gain Enterprise Investment Scheme tax relief, designed to help smaller companies. Relief is at 30 per cent of the cost of the shares, to be set against the individual’s Income Tax liability for the tax year in which the investment was made. Investors from the hospitality industry will also be eligible for discounts of up to 20% on Organic Hospitality’s proven services.

He is confident that he will achieve the £150,000 target well within the time limit, and, if it is reached earlier than expected, he can go into an overfunding mode, potentially realising up to £250,000.

Crowdcube has raised nearly £15 million for 76 start-up businesses since it was established in February 2011, attracting 48,886 registered investors. It is regulated by the Financial Conduct Authority.

Co-founder Luke Lang said when the firm passed the £10 million investment mark: “Today’s banking system is outdated. It doesn’t give early stage small businesses and start-ups access to the funding they need to grow and drive the desperately needed economic recovery.”

Kerr said that Organic Hospitality was aiming at a lucrative niche market. He said: “There are very few hotel and tourism specific agencies in the UK and by specialising in this sector, we believe we offer clients a range of services that save them time and make their marketing more effective. We think within this arena we can carve a name for ourselves and provide a real return on investment.”

He intends to use the initial fund-raising round to establish a strong presence in the lucrative London market, before building on that success with expansion into the North American and Asian markets.

For further information, visit www.organichospitality.com or http://www.crowdcube.com/investment/organic-hospitality-ltd-13348.

This was posted in Bdaily's Members' News section by Blueprint Media .