An online legal service aimed at small businesses and “democratising the law” has almost completed its second round of ‘crowdfunding’, raising more than £100,000 in less than a month as it targets ambitious expansion.
LawBite has also announced a new partnerships with Start Up Loans, the government-funded initiative set up to distribute £140m of public money to start up companies.
As of yesterday, 121 investors have put £108,960 into LawBite through Crowdcube, 90% of its £120,000 target. This will represent 6.48% of the company’s equity. The opportunity is open to investors for another month.
The online documents and advice service aims to offer “a low-cost and easy-to-understand service” to the UK’s 5m small businesses. Its prospectus predicts total sales of £9.7m and gross profit of £4.3m by the end of 2016.
LawBite told investors that it wanted the extra cash because “there is an immediate chance to extend the LawBite offer at a faster pace than we had envisaged when we were last on Crowdcube” – last May investors pumped £240,000 into LawBite in just 10 days, in one of the fastest funding rounds in Crowdcube history. In total the company raised £450,000 in cash and in kind in that funding round.
It said these opportunities are international expansion, providing case management for direct access barristers, introducing a fixed-fee ‘Check My Contract’ service, and trialling the option of customers being able to have a lawyer come to their offices for up to a day.
Clive Rich, the barrister founder and chairman of LawBite, said: “Once again, we are thrilled with the public interest and confidence in LawBite. It further strengthens our belief that our business model is crucial to ensuring modern small businesses thrive.
“We hope that this new investment will bolster our offering of a low-cost and easy to understand legal service, not only to the five million small businesses in the UK, but also across the globe.”
LawBite said it has agreed partnership agreements with “a string of affiliates in the UK”. It said in January that in the previous month it had recorded 30,000 page views and nearly 2000 sign-ups, and delivered 700 pieces of advice. The traffic was being delivered at a cost per click “well within our budgeted expectations”.
Start Up Loans has so far advanced more than £68m to 13,368 businesses. The arrangement sees LawBite provide free 15-minute consultations to loan recipients on every new legal matter, free intellectual property advice (30 minutes per new matter) and a 10% discount on all other legal services on its website.
LawBite said Start Up Loan’s previous legal offering – a document template provider – had an offer take-up of 160 per month, and its much broader service breaks even at 140 customers per month.
Elliot Gold, corporate partnership manager of Start Up Loans, said: “Start Up Loans is focused on improving the journey of an entrepreneur from receiving loan, through to a growth stage. We are delighted to offer our entrepreneurs understandable, affordable legal advice from LawBite, a company renowned for excellent online legal advice for start ups.”
Among a list of more than 80 other possible partners, it is also working with online accountancy platform Xero to integrate LawBite’s offering for its 35,000 SME clients.
Mr Rich told Legal Futures last month that LawBite will apply to the Solicitors Regulation Authority for an alternative business structure licence; this would “give us the freedom to develop the company and the way it is financed”.
Until this comes through, LawBite’s legal advice offering is provided by North Star LLP, an entity located in the same building as LawBite in south London.