Crowdfunding put F1 team back on grid - Palmers Solicitors

Crowdfunding put F1 team back on grid

A Formula 1 team has found an innovative approach to raising funding to help it complete the 2014 season.

Caterham had to miss two races following funding problems that led to it to Oxfordshire-based Caterham Sports Limited, which builds cars for the team, going into administration last month.

The team is now set to compete in the final Grand Prix of the season in Abu Dhabi on 23 November after almost 6,000 supporters backed a bid to raise £2.35 million via crowdfunding platform Crowdcube. So far, just over £1.9 million has been raised.

Finbarr O’Connell and Henry Shinners of Smith & Williamson, joint administrator of Caterham Sports Limited (CSL), said on 14 November: ““We are delighted that the team will be going to Abu Dhabi and very, very grateful to everyone for their support.

“However, we are keen to confirm that our ultimate priority as administrators is to try and secure a stable and long term solution for the Caterham F1 team, and hence a more positive outcome for the creditors of CSL, the workforce of the broader team and other stakeholders.

“The crowdfunding campaign has been a major part of our efforts to achieve these aims as it enables the team to get back on the grid at a crucial time. This race will provide a show-case in a global setting for the historic Caterham F1 team and demonstrate the commitment of the staff and suppliers.

“To the best of our knowledge, this is the first time that a restructuring project has used the entrepreneurial approach of crowdfunding as a step in the process of getting a business back on its feet.”

Luke Lang, Crowdcube co-founder, said: “We’re thrilled to have helped get Caterham F1 on to the grid for the season finale in Abu Dhabi. It’s fantastic that so many people have been inspired to support the team, and crowdfund its return to Formula 1.”

While this is an unusual case, crowdfunding and other alternative finance sources, such as peer-to-peer lending, are becoming increasingly popular for businesses to raise funds for investment or expansion.

At Palmers, we can provide expert advice to business owners on corporate<!–> finance issues, including asset finance, debt finance, equity finance and venture capital. We can also advise in relation to business transactions, such as mergers, acquisitions and sales and management buyouts. For more information, please contact our Corporate Finance team.