Seedrs is an equity crowdfunding platform based in the United Kingdom that was launched in July of 2012.
In the last three years, the company has helped fund more than 200 deals. On average, it takes startups 27 days to get fully funded on Seedrs, with an average of 165 investors per deal.
The average investment amount for a Seedrs campaign is £1,089, but some campaigns raise much more. One startup, FreeAgent, recently raised £1,015,350 for 3.26% equity in September 2015.
Seedrs prides themselves on equity crowdfunding done properly. As outlined in their mission statement:
“We let all types of investors invest in businesses they believe in and share in their success. We let all types of growth-focused businesses raise capital and business community in the process.
We do all of this through a simple, highly professional, online process that protects and empowers investors while helping businesses grow and generate returns.”
In July 2015, Seedrs raised $15.6 million in a Series ‘A’ funding round led by Woodford Patient Capital Trust plc (WPCT) and Augmentum Capital. According to a TechCrunch article, the funds from this round will be used to increase platform development and expand their operations to the US.
This post goes over some of the basic aspects of Seedrs, including the types of campaigns hosted by the platform, who is qualified to invest on Seedrs, and how startups can use the platform to raise funds:
Types of Campaigns
1) Equity campaigns
Equity campaigns allow investors to become shareholders in a business. This is the most common type of campaign on Seedrs and one of the simplest. Investors can become shareholders in an equity campaign on Seedrs starting at only £/€10!
2) Fund campaigns
Fund campaigns give you the chance to invest in multiple startups and become a shareholder in each for as little as £/€100. These funds are organized by different groups, like those who run accelerators and venture capital funds.
Fund campaigns can be good because they offer investors a way to diversify their investments and organizers often give startups access to valuable help, advice and mentorship.
3) Convertible campaigns
Convertible campaigns are generally used by businesses that are planning a large funding round and want to wait to put a valuation on their company.
For investors, these investments convert to equity in the future and start at £/€10. Investors in convertible campaigns on Seedrs are offered a discount, resulting in more shares than new investors who invest the same amount in future funding rounds.
How to Invest on Seedrs
Currently, Seedrs is available to EU, EEA and Switzerland residents who are over the age of 18, along with institutional investors in these countries. To invest you must become authorized by completing a short Investment Authorization Questionnaire or self-certify as a ‘sophisticated investor’ or ‘high net worth individual/institution’.
Investopedia defines a ‘sophisticated investor’ as someone “deemed to have sufficient investing experience and knowledge to weigh the risks and merits of an investment opportunity.”
In the UK this means having an annual income of at least £100,000 or net assets of £250,000 or more.
How to Raise Funds on Seedrs
Entrepreneurs can create a Seedrs campaign by answering story-building pitch questions and submitting the campaign to the Seedrs team for review. If the campaign is accepted, startups have 60 days to get fully funded – with help from the platform and exposure to Seedrs’ active investor base.
Swogo, who raised £70,011 in funding on Seedrs in 2013 told CrowdsUnite:
“We’ve had a fantastic experience using Seedrs. They have a great team behind them who are always on-hand to help. We’ve managed to connect to incredibly valuable investors using the platform, who have re-invested in following rounds.
They’ve added time and value, as well as capital, to our service – which is invaluable at our early stage. We have recommended Seedrs to a number of other UK startups and will continue to do so in the future!”
CrowdsUnite, the biggest crowdfunding review service in the world, has given Seedrs an overall rating of 7.8, with a 7.6 for customer support, 7.8 for funding from strangers and 8 for ease of use.
Once your Seedrs campaign is fully funded and legal paperwork is complete, you receive the funds you need to grow your business and get the added benefits of keeping in touch with investors for mentorship, outreach and networking purposes through your own investor relations portal.
Conclusion
With offices in the UK, Portugal and the US, it is clear that Seedrs is becoming a popular choice for startups looking for funding and mentorship. It is also a great choice for investors.
The dedicated team at Seedrs ensures investors that they take the time to do due diligence by making sure the project is viable and verifying all factual claims made by entrepreneurs.
To learn more about equity crowdfunding, check out this podcast with Simon from iNeed. This company has raised over £200,000 with campaigns on both Seedrs and CrowdCube.
