Equity crowdfunding has become a big name in alternative finance, but there are still those who are sceptical; the risks are high and the sector is still relatively young. How can the public be encouraged to invest when nobody knows what the future holds?

However, recent events may go some way to allay concerns. Two weeks ago E-car Club was sold to car rental giant Europcar, becoming the first UK crowdfunded start up to successfully exit and pay back their investors.

Back in 2013, E-Car Club became one of the first companies to try crowdfunding. They raised £100,000 from 63 investors on platform Crowdcube, with a valuation of £500,000. Its investors took a real risk – however for them, it paid off. They put in an average of £1,500, with the largest investment £15,000, and will now receive a healthy 3-4x return on their investment.

“Being able to write a cheque to your investors this early on is one of the unexpected pleasures of doing what we do,” E-Car Club founder Andrew Wordsworth told CityAM. Luke Lang, CEO of crowdfunding site Crowdcube agrees. He also spoke to CityAM: “An exit for an equity investment was what the industry was looking for. The aim of all of this is identifying great businesses that people want to invest in and that then deliver great returns.”

The facts speak for themselves; the chances of a return on investment in a start-up business aren’t high. According to a 2009 Nesta report, 56 per cent of investments fail to return capital. The other 44 per cent bring positive returns, but a mere 7 per cent will return 10x return on investment. Not good chances, if you’re hoping to become a millionaire.

However, for the crowdfunding sector, E-Car Club’s success can only be a good thing. Whilst it’s clear that a lot of start-up businesses fail, this buyout is the first definitive proof that there really is the opportunity to make money from investments on crowdfunding platforms – if you’re prepared to take a chance.