Fundraising is one of the biggest challenges for startups and growing SMEs. Commercial lenders are conservative, equity investors are picky, and government agencies are incompetent.

So what are the alternatives?

One creative option is crowd equity, which is a niche crowdfunding strategy that involves raising money from a large volume of small investors. Crowdfunding is often assumed to be a digital innovation, but it's actually been around for centuries. Historical examples include war bonds, book subscription schemes, and even the construction of a base for the Statue of Liberty.

Online crowdfunding has been popularised by platforms like Kickstarter and Indiegogo where patrons donate money to support product development. Crowd equity is an investment-themed variant where investors buy shares instead of simply pledging financial support. Popular crowd equity platforms include AngelList, Crowdcube, Fundable, and Wefunder.

An excellent example of crowd equity in action is BrewDog, a Scottish brewery and pub chain that recently launched an innovative hybrid fundraising campaign. Not only can investors buy shares, they can also earn discounts, free beer, branded merchandise, and other rewards based on how much they invest.

It's debatable whether investing in BrewDog is a good idea. Their valuation is ambitious to the point of nonsensical, and there is no market for the shares outside of the annual trading days organised by the company. Nonetheless, the campaign has been very successful, with over £12m raised to date.

Crowdfunding is rarely quick or easy. Successful campaigns often rely on an existing fan base, which can take months (or years) of painstaking branding and community development. However, if you're prepared to put in the work, BrewDog is proof that there are viable alternatives to centralised investment.