Crowdfunding platform Seedrs is set to be the first to allow investors in the European Union (EU) to make cross-border investments in companies across the EU.
Investors and entrepreneurs from several EU member countries – and a few outside the EU, including Switzerland – can join Seedrs, invest in any of the start-ups listed on the platform or try to raise their own capital.
Beyond deepening the pool of capital and investment opportunities available to its members, the move makes Seedrs the first crowdfunding platform to make pan-European investment possible.
‘National boundaries become artificial when you move online, and the notion that a Brit should be able to invest only in British start-ups, a German only in German start-ups and an Estonian only in Estonian start-ups seems silly,’ says the firm’s co-founder and CEO Jeff Lynn.
The Seedrs platform can accommodate multinational listings by creating an investment through a UK-based vehicle for its listed companies. Investors can buy a stake in various start-ups for as little as £10 ($16), and anyone over the age of 18 can register on the site.
Small investors can, therefore, participate side by side with high-net-worth or private investors in an asset class previously available only to an exclusive shareholder crowd.
In addition, the London-based firm is hoping to finance its own expansion by reaching out to potential shareholders on its own platform, originally making a total stake of 8.8 percent available to investors for £500,000. Such a valuation would make the business worth a little under £5.2 mn.
Hours after listing 12.66 percent of the company’s equity on its own platform today, Seedrs had already raised £750,000 of investment for its own brand.
The firm’s pitch on Seedrs.com says the company’s executives ‘intend to use the proceeds of this fundraising round for general working capital purposes as we continue to grow the business toward profitability.’ Lynn says the move to use Seedrs’ own platform to fund its expansion ‘demonstrates our faith in the power of equity crowdfunding and our model.’
He adds that the company’s primary goal is to spread ‘start-up investing as widely as we can’, explaining that it is giving investors exposure to a constant flow of deals and start-ups access to capital wherever possible. ‘Our goal is to provide the architecture and infrastructure for the whole universe of private investments in early-stage businesses,’ he concludes.
Since Seedrs’ launch in July 2012, the platform has struck 49 deals worth £2.5 mn of funding. The company charges 7.5 percent for each successful raise on its platform, with the same fee levied on any future profits made by investors, either on exit or through dividends.
