· Success for SyndicateRoom’s unique model, which allows smaller private investors to co-invest with professional investors
· Businesses selling equity on the platform range from app developers to aircraft designers
· Average investment size is £5k as platform attracts more sophisticated investors
Just six months after launching, the crowdfunding platform SyndicateRoom has helped hundreds of people invest £1million into promising British businesses.
SyndicateRoom is an evolution of the traditional equity-based crowdfunding platform. Unlike other platforms, it enables people to co-invest with angel investors and professional venture capitalists from around the UK.
While the minimum investment is just £500, the average amount invested is £5000 – significantly higher than any other crowdfunding platform – as SyndicateRoom has proved popular with wealthier, more sophisticated investors.
Launched last July, it offers investors the peace of mind that traditional equity-based crowdfunding platforms cannot – as every company available for investment has been thoroughly vetted by professional investors, who carry out extensive due diligence before parting with their own money.
The companies selling equity on the platform have ranged from the aircraft designer e-Go aeroplanes to the cloud-based jukebox Psonar and the makers of the world’s first urinal videogame, Captive Media. Angel investors have included industry heavyweights such as David Ryan, Peter Cowley and Hermann Hauser.
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.
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.
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:
“2013 was a breakthrough year for crowdfunding – the thinktank Nesta estimates that during the year Britons pumped nearly £1billion into crowdfunding in all its forms.
“SyndicateRoom’s extraordinary rate of growth since launch shows the strong demand among more sophisticated investors for equity crowdfunding, and the big potential returns offered by promising young businesses.
“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 has proved a great draw for our smaller investors – who together have contributed more than half of the funds invested.
“Our blended model – in which professional and smaller investors team up to share the risk and the rewards – has broadened the appeal of crowdfunding from penny stock dabblers to more sophisticated amateur investors who are keen to include equity in start up businesses as part of a balanced portfolio.
“We pride ourselves on being a flag-carrier for Crowdfunding 2.0 – connecting more investors with more great British businesses.”
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 looking for growth capital.