As was widely expected, the self-crowdfunding round of investment platform SyndicateRoom easily hit its £1.2 million funding goal representing a 14.12% equity stake in the young company. Pre-money valuation was stated at £ 7.3 million with a per share price of £2.88.
Existing registered investors were given a preview of the offer that created sufficient interest to generate a 2X over-subscription estimate. The deal closed on May 2nd, having opened up on May 1. The offer saw 201 investors participating in the funding round. The offer had a hard stop of May 10th – something that was obviously not needed.
Boom! £1.2m raised on #SyndicateRoom for #FutureOfCrowdfunding. Funding round closed!
— SyndicateRoom (@SyndicateRoom) May 2, 2015
To manage demand SyndicateRoom capped individual investors at £5000 each. Established angel investors, including Jonathan Milner, participated in the funding round. Existing investors were limited to their pro-rata pre-emption rights thus allowing a broader base of investors to participate in the future of the growing platform. The industry in the UK has experienced dramatic growth. In 2014 it was estimated that £111 million were raised via equity crowdfunding. While this number still pales in comparison to traditional finance the growth rate has been estimated at over 400% in just a few short years.
SyndicateRoom is not the first investment crowdfunding platform to self-crowdfund, but it is indicative of the faith in the process and is an opportunity to generate additional awareness for companies considering the equity crowdfunding path.
Co-founder and CEO of SyndicateRoom Gonçalo de Vasconselos, was quoted recently in the Times saying;
“I love the concept of letting a much wider group of people invest,” he says, “but the sector needs to be a lot more transparent.”
It is the combination of efficacy and transparency that has compelled entrepreneurs to enter into the crowdfunding space. Traditional finance can be a shadowy, obfuscated world, comfortably existing behind the closed doors of a boardroom. Crowdfunding represents the advent of Sunlight Finance, delivering the most compelling form of regulation to the financial industry – the light of day.
SyndicateRoom has helped finance 35 companies since its launch in 2013. The platform states it has doubled each quarter since launch.
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