In what is being claimed 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 says that it 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.
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 per cent of the amount invested, with no tax payable upon profits. Three of the deals currently available on SyndicateRoom are listed below.
