Investment crowdfunding platform Seedrs has offered the opportunity for smaller investors to join a prominent VC fund – something usually exclusive only to the very wealthy or very connected. Mark Pearsons has launched his own £30 million fund and a £500,0000 portion is being made available for individuals for as little as £100. The fund, Fuel.Ventures, is said to have a pipeline of up to 20 different businesses and will be targeting early stage, e-commerce companies. To date over 100 investors have contributed about £300,000 to the fund.
Pearson was the founder of MyVoucherCodes. Launched in 2003, it recently sold generating a successful exist that delivered £55 million for investors. The company was reportedly launched with just £300.
Speaking with CNBC Pearson spoke about crowdfunding;
“I love crowdfunding and I love what it’s done. It opens up the opportunity for normal crowd retail investors to actually come and invest in really high-tech start-ups.”
Seedrs stated, “this is the first time that such a prominent entrepreneur, and successful venture investor, has invited crowdfunding investors to access the traditionally reserved world of venture capital. As venture capital is innovating and evolving we’re proud to be a trusted partner in the space.”
The strategy of combining professional investors with retail types is one that has garnered growing attention. If an experienced individual has directed their time and energy to review and dissect – and approve an investment – this can benefit smaller investors as a collateral benefit. MIT Sloan Professor Christian Catalini has labeled syndicates as the “killer app of equity crowdfunding”.
Investing in early stage companies is risky but associated returns can make the investment very worthwhile. Studies have proven that a diversified portfolio of early stage companies may deliver market beating returns.
Pearson is an “award winning” entrepreneur. He has been recognized by Ernst & Young as UK Entrepreneur of the year in 2011. Since selling his company, Pearson has invested in 10 businesses that have outperformed VC capital in Europe, according to the campaign page. One of his investments, VE Interactive delivered a 75x return taking £835,000 and turning it into £62,500,000.
This is what equity crowdfunding is all about. Access to capital for SMEs and access to opportunity for all investors (not just the very rich). Seedrs is preparing to enter the US market. While the regulatory environment is a bit more restrictive in the US, we expect Seedrs to chart a similar path as to what they have created in the UK.
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