seedrs

ING Partners with Equity Crowdfunding Site Seedrs to Tackle Belgium and Luxembourgh Markets

wiseclerk

Seedrs logoING Bank partners with equity crowdfunding service Seedrs and reward based crowdfunding platform Kisskissbankbank to tackle the markets in Belgium and Luxembourg. Through this partnership, ambitious businesses will have a fast-track service for equity crowdfunding on Seedrs. The partnership will also raise the awareness of equity crowdfunding in the wider business community.

During consultations with businesses, ING Belgium representatives will assess which platform may be suitable and discuss how it works. Using the ING fast track procedure it only takes the entrepreneur a couple of clicks to submit an initial campaign enquiry for review. When Seedrs receives a project through this new route, it will be assessed within two days to determine if it’d be a good fit for Seedrs and equity crowdfunding. Continue reading →

Seedrs Shares Available in Equity Crowdfunding Campaign on Friday

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Seedrs LogoSeedrs, one of the tow biggest equity crowdfunding platforms in the UK (and probably in the world), has announced that it will open a new campaign offering shares to the crowd on Friday. To bid in the pitch and become a shareholder, interested investors need to register at the Seedrs website first and then wait for the campaign to open on Friday.

Jeff Lynn, CEO of Seedrs said:

Last month Seedrs announced its £10 million Series A round led by Woodford Patient Capital Trust and Augmentum Capital. As we explained, we have set aside £2.5 million of that round for existing shareholders and new investors to invest through a campaign on the Seedrs platform. …

The campaign will go live to members of our Leedrs Club (the group of our most active investors) at 9:00 am this Friday, 21st August, and it will then go live to all investment-authorised members at 12:00 pm the same day. … Investments will be accepted on a first-come, first-served basis, and although you will have several days to make payment after investing, we would suggest [investors] transfer any funds [they] wish to invest sooner rather than later.

Please note that by the time the campaign opens on Friday, a significant proportion of the £2.5 million will already have been taken up by existing shareholders exercising their pre-emption rights. We expect, however, that there will still be a good bit of room for new investors, and it is our hope that we will be able to use this opportunity to expand our investor base meaningfully.

I expect that this offer will fill very quickly. The last comparable offer by Crowdcube, Seedrs main competitor, was filled within minutes.

Seedrs Raises 10M Series A

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Seedrs logoUK platform Seedrs has raised a 10 million GBP series A round led by Woodford Patient Capital Trust plc and Augmentum Capital. The capital raised will be used to launch Seedrs in the US market.

Furthermore, Seedrs is to launch a 2.5 million GBP crowd funding campaign to give existing shareholders and new investors the opportunity to participate in the round. The details will be announced later.

Seedrs plans to expand its marketing efforts in the UK and Europe, increase platform development activities and launch its business in the United States.

This Seedrs valuation is now at 30 million GBP on a fully-diluted, post-money basis. I wrote a review of my experiences with investing on Seedrs in March. Continue reading →

Who Owns Top UK Crowdfunding Platforms Crowdcube and Seedrs?

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Thanks to Companies House filings of British Companies are available to the public fee-free now (previously there was a small fee to access documents). This is a huge plus for equity crowdfunding as interested investors can check past filings of the pitching companies (provided the company was not founded very recently).

This also allows anybody interested to check how many shares the founders, employees and investors of the top UK equity crowdfunding platforms Crowdcube and Seedrs hold. And in order to save you the time to search yourself, P2P-Banking.com provides the direct links to the documents below:

Crowdcube

Seedrs

Both companies had pitches in the past for themselves, offering part of their equity on their platforms to interested investors.

Continue reading →

How I Explored P2P Lending – My Review Part II

Guest

This is part II of a guest post by British investor ‘GSV3Miac’. Read part I first.

Most of my concerns about P2P lending revolve around its relative immaturity. Even ZOPA, the oldest in the UK, has only been around 10 year or so, and have changed ‘just about everything’ at least twice. Funding Circle (“FC”)have 3-4 years history, but there have been no two years where the business has actually been stable (maximum loan sizes, loan terms, Institutional participation, etc. have all changed pretty much continually over the period I’ve been investing). How well the companies, and their borrowers, would survive a real recession, can only be guessed at.

What do I actually invest in? Well practically anything if the rate looks good. My ‘core holding’ is in RS, but there is nearly as much spread across the P2B platforms. For extra P2P related risk (and maybe reward) I also signed up to invest in the Assetz and Commuter Club capital raises (via SEEDRS). With EIS investments some of the money at risk is renated tax, which you had a 100% certainty of losing to the government anyway.

I do not plan to hold most of my investments (particularly in FC) for the full 5 years. After a few months the financial data is well out of date (much of it is already out of date when the loan is approved!) and unless you want to spend time checking how the company is doing, it is easier to sell the loans on and start anew.

Similarly if rates start to move dramatically, it’s time to ‘flip’ or ‘churn’ .. selling a 7% loan part when rates move to 9% is possible, but might sting a bit. Selling a 7% loan part when rates have moved to 14% is going to hurt a lot, or might be completely impossible. If rates move the other way, selling a 7% loan part when average rates are 6% is not only easy, it may be profitable (assuming the platform allows marking up). You might wind up with un-invested funds, but as someone succinctly put it on the P2P forum, ‘un-invested is a lot less painful than lost’.

The future looks equally interesting .. we are promised P2P investments within an ISA (do NOT hold your breath, this seems to be moving at a glacial pace so far), which could result in a ‘wall of money’ arriving on the scene. We are promised P2P losses to be tax deductible (against income, rather than capital gains), which has an impact on the worth of a protection fund. We will inevitably see some new entrants appear as the P2P area grows and become more attractive (Hargreaves Lansdown, a very large fund management player, has already indicated they might get involved, I believe). We will equally inevitably see some more of the current players merge or vanish, and many of the loans default.

As I may have mentioned a couple of times, nothing has been very stable so far .. most of the platforms are still ‘feeling their way’ with immature software (this is polite-speak for ‘bugs’), and business models/systems which are still evolving. The basic P2P premise of connecting people with money with people who want it, without too much activity in the middle, does not appear to scale too well when the number of each side get big (a million people bidding to fund a thousand loans each day is not something to contemplate lightly). Platforms need to grow to survive and they need to grow in balance – if they double the number of lenders, they need twice as many willing borrowers, and vice versa .. Asymmetrical growth just annoys whoever is on the surplus side, distorts the rates, and results in no growth at all – you need both a lender and a borrower to have any business. It is obvious, but very hard to manage. Continue reading →

Seedrs Review – My Experiences Since Joining

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Seedrs logo15 month ago I joined the British platform Seedrs and started to invest in startups I consider interesting. Since then I have built my small portfolio, holding equity stakes in more than a dozen mostly British companies. In this article I share my experiences in the process.

What is it about?

On Seedrs startups can pitch to raise money offering investors an equity stake in the company. This is called p2p equity or equity crowdfunding. The startup discloses information about their product, plans (e.g. intended impact, monetisation strategy, use of proceed) and achievements so far to registered users. There is further information about the market they operate in and the team is presented.
The equity share offered is stated (e.g. 5%). This and the amount to be raised (e.g. 75,000 GBP) define the valuation of the startup that the startup has applied (in this example 1,425,000 pre-money, so post-money, that is after completed funding the startup’s valuation would be 1,500,000 GBP and the 5% equity share of the new investors represent 5% of 1,500,000 = 75,000 GBP raised). Note that the valuation is based solely on what the startup deems appropriate. Of course if the startup aims to high it risks that there is not enough investor demand and the funding fails.

How to get started as an investor?
I just signed up online and submitted some documents to verify my identity. The process is pretty straightforward. Seedrs is open to international investors, so investors do not have to be UK residents.

After signing up, investors can browse the pitches that are currently raising money. A pitch is usually open for 60 days, but maybe closed early by the startup if the goal is reached earlier.

Seedrs Screenshot
Current screenshot showing some of the open pitches

Clicking on any one of the pitches reveals the detailed information. It also shows who has invested and how much. Investors can opt to show their bid as ‘Anonymous’ in order not to disclose thier name to the Seedrs community. When an investor likes a pitch bidding is possible through the “Invest” button. As long as the pitch is below 100% funding an investor can bid first, and pay later (within 7 days of the pitch completing 100% funding). Once the pitch reaches over 100% it is marked as “overfunding” and investors can only bid, if they have already deposited funds available in their account. Payment is possible via bank transfer or credit card.

What happens after the funding

Seedrs completes all the paperwork with the startup. As Seedrs acts as a nominee for investors the individual investor does not have to do anything. The nominee structure means that the startup does not have to deal with each of the many individual investors but rather only with Seedrs as Seedrs represents all of these investors. Seedrs charges the investors a fee of 7.5% on the profits the investors make (note that this is not a fee on the investment amount (example: an investor invests 200 GBP in a pitch. Should there be an exit later where the value of the investors shares is now 300 GBP then Seedrs charges 7.5% of the 100 GBP profit; therefore the investor would be paid back 292.50 GBP). Note that your investment will be illiquid until the exit; as there are restrictions on selling the shares. Continue reading →