SyndicateRoom is a UK crowdfunding platform that allows small investors to participate in crowdfunding alongside “professional” angel investors. This integrated form of crowdfunding creates a symbiotic relationship where the pros lend credence to the offer via their due-diligence and lead funding. The minimum amount for an investor is only £500 so the barrier is low – paperwork is processed by the site – with the crowdfunding ending up completing the equity round of financing.
Investors get the same competitive valuation as that negotiated by the lead investor. If the lead investor makes money — whether via dividends or an ‘exit’ — so does the SyndicateRoom investor.
“By giving private investors the chance to invest alongside experienced business angels, who are putting their own money where their mouth is, we’ve sought to add an extra level of security and peace of mind for anyone wishing to invest in UK start-ups via a crowd-funding platform, said Syndicate Room CEO Gonçalo de Vasconcelos, ““Clearly, this type of investment will always be classified as high risk, but knowing that the company you are buying into has undergone extensive due diligence by professional investors is something we felt was missing in the traditional crowd-funding model.
As of this July several live deals were reported live on the platform: Live Deals — as at 23 July 2013
Eagle Genomics – Description: Profitable bioinformatics company providing big data solutions in biotechFunding round: £1mLead Investors: £300k (MidVen and Cambridge Capital Group angel investors)Investment required: £700k
Psonar – Description: Online streaming music platform – “Listen to any track for just a penny”Funding round: £250kLead Investors: £150k (several business angels from different angel networks)Investment required: £100k
Blendology – Funding Round: £200kLead Investors: £50k (follow-on from previous round of £327k that includes several angel investors)
de Vasconcelos stated further,
“It arguably makes it easier to find winners, too, as the companies you are exposed to come pre-vetted. They wouldn’t be there in the first place if they weren’t deemed to be viable and investment-ready.”