SyndicateRoom is the first UK equity crowd-funding platform to enable smaller private investors to co-invest with professional business angels
Unique platform gives smaller investors the peace of mind that the company they are investing in has already undergone extensive due diligence
In what is a UK first, smaller private investors can now invest in UK start-ups alongside established business angels, and reap the potential strong returns* enjoyed by these professional investors.
SyndicateRoom is an evolution of the traditional equity-based crowd-funding platform. Unlike other platforms, it enables people to co-invest with angel investors and other early stage venture capitalists from around the UK.
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Crucially, the ‘lead’ angels in the funding round will have undertaken their own due diligence and be investing their own money. As a result, SyndicateRoom provides investors with the peace of mind that traditional equity-based crowd-funding platforms do not: the knowledge that each company available for investment has undergone a thorough vetting process.
The minimum investment into companies available through SyndicateRoom is £500 and the process is completely free for investors. When private individuals choose to invest, SyndicateRoom also takes care of all the legal paperwork on their behalf.
The investment process for the SyndicateRoom member couldn’t be simpler. Once a lead angel investor, or network of angels, has agreed terms with a start-up and pledged to invest a significant percentage of the funds required, the balance is made available to smaller private investors through SyndicateRoom. Interested investors then provide the additional capital required to close the funding round.
While SyndicateRoom investors are not able to influence the investee company’s strategy, they do get to enjoy the same competitive valuation as that negotiated by the lead investor. If the lead investor makes money — whether via dividends or an ‘exit’ — so, as a fellow shareholder in the company, does the SyndicateRoom investor.
Because of the nature of the companies available on the platform, it is possible for SyndicateRoom investors to benefit from the Seed Enterprise Investment Scheme (SEIS), which returns 50% of the amount invested, with no tax payable upon profits. Three of the deals currently available on SyndicateRoom are listed below.
Live Deals — as at 23 July 2013
Eagle Genomics – www.eaglegenomics.com
Description: Profitable bioinformatics company providing big data solutions in biotech
Funding round: £1m
Lead investors: £300k (MidVen and Cambridge Capital Group angel investors)
Investment required: £700k
Psonar – www.psonar.com
Description: Online streaming music platform – “Listen to any track for just a penny”
Funding round: £250k
Lead Investors: £150k (several business angels from different angel networks)
Investment required: £100k
Blendology – www.blendology.com
Description: Highly engaging tap-to-connect networking solution for conferences and events
Funding round: £200k
Lead investors: £50k (follow-on from previous round of £327k that includes several angel investors)
Investment required: £150k
SyndicateRoom makes its money by charging a success fee to companies that successfully raise finance through its platform. It does not charge any ongoing fees or take a percentage of any profits made by its investors.
Gonçalo de Vasconcelos, founder and CEO, SyndicateRoom, commented:
“By giving private investors the chance to invest alongside experienced business angels, who are putting their own money on the line, we’ve sought to add an extra level of security and peace of mind for anyone wishing to invest in UK start-ups via a crowd-funding platform.
“Clearly, this type of investment will always be classified as high risk, but knowing that the company you are buying into has undergone extensive due diligence by professional investors is something we felt was missing in the traditional crowd-funding model.
“It arguably makes it easier to find winners, too, as the companies you are exposed to come pre-vetted. They wouldn’t be there in the first place if they weren’t deemed to be viable and investment-ready.”
SyndicateRoom membership is free and investors can register online at www.syndicateroom.com. SyndicateRoom is sector-agnostic, enabling investment in companies from all sectors that are typically looking for growth capital.