In the ultimate validation of their crowdfunding platform, UK based equity crowdfunding site Seedrs set a goal to raise £750,000. This was an increase in the initial target of raising £500,000 as investor demand was very robust. The offer opened and was immediately OVER funded as investors rushed to participate in the hot equity offering.
As of this writing the amount funded stood at over £1 Million funded representing 15.77% equity in the small company. The pre-money valuation was set at £5,174,170. The campaign was continuing to accept investments. Over 370 investors had already jumped into purchase shares in the fast growing innovative platform.
The investment was sought to aid in their strategic objective of global expansion. Seedrs announced just yesterday their platform was expanding across Europe and now accepting listings from 32 different European countries – including Switzerland. They are accomplishing this goal by aiding companies in creating a UK based holding company as a country of convenience thus accomplishing cross – border investments. Taking this approach avoids the challenges of dealing with a multi-national regulatory environment. The complexity of the structure will be handled entirely by Seedrs – creating a pre-packaged company creation for interested companies. With no effective operations in the UK there is not expected to be any tax liability for the listing company with the exception of a possible double tax on dividends in certain situations. This initiative was driven in part from the increasing demand of investors in various countries wanting to invest in companies based in other European countries. Starting today crowdfunding companies now have access to an investor pool originating from a population of 500 Million EU citizens.
“It’s the depth of the network…. crowdfunding is a network driven business, The more investors you have on a network the more value to entrepreneurs. The more deals you have on a network the more value to investors . The goal is to build as broad as possible and as deep of pool as possible. This will create a significantly higher possibility of raising the needed capital for the business.”
Going forward Seedrs may adjust their platform to accommodate local needs but as of today all transactions are via existing site.
Seedrs has expressed interest in migrating to the United States but is concerned about burdensome requirements with Title III – or the regulations surrounding popular crowdfunding. They have entered into early stage discussions with potential partners in Asia and South America. Lynn commented on the environment in the US;
“Crowdfunding has more of an uphill battle in the US. It will happen but it will take a lot of time and lot of money.”
Seedrs is not precluding the US and with the right set of circumstances and the right partners they would be interested in crossing the Atlantic.
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