A new way to invest

In March 2016 SyndicateRoom became the only alternative finance company to provide its members with direct access to both public and private equity markets, helping investors diversify their exposure to different asset classes through a single platform. As a result, SyndicateRoom members are now able to participate across the entire funding journey of growth businesses, from idea to IPO.

Public Markets

The launch of SyndicateRoom’s public equity capability means individual investors are be placed in the same position as professionals, with the ability to participate in the IPO market and the opportunity to benefit from the same discounts for new equity issues. SyndicateRoom members have access to high-growth IPOs, pre-IPOs and discounted Placings. 

Discounted Placings are typically only offered to institutional investors. Over the past two years, over £16.5bn was raised on the London Stock Exchange via Placings and IPOs, with an average 10% discount given. That means £1.65 billion of value has been given to the traditional City of London investment community.

Related articles:

• A guide to investing in IPOs
• Demystifying the IPO process
• Retail investors and their role in an IPO

Equity crowdfunding – Private Markets

SyndicateRoom members are able to invest in unquoted companies in exchange for equity alongside active Business Angels. This means that for each deal there is always at least one active Business Angel investing their own capital into the company. For each deal it is completely up to you whether you invest and how much you invest (minimum investments apply) but you always know that the valuation of the business has been the result of negotiations between an active Business Angel (or sometimes a Business Angel Network or other cornerstone investor) and the entrepreneurs, resulting in a much fairer and more attractive valuation for smart investors.

Please note that the lead investor will not be responsible for your investment in any way. The lead investor's interests are aligned with yours, and so is their risk and exposure.

The investment deals available to our members vary from seed investment into companies that have not yet stated trading, to well-established companies that are unable or unwilling to secure lending from a bank to finance their growth. 

We present investment deals in a variety of sectors. You can analyse the details of each deal, carry out your own due diligence, communicate with the respective entrepreneurs and/or with other investors, and then make a decision about whether or not to invest. 

Decide whether to invest and how much. We will take care of the rest.

Head over to our Investors' Academy to learn more. 

SyndicateRoom members vary from very experienced Business Angels (including some of the 10 Business Angels all entrepreneurs should know) to other sophisticated investors and HNWIs (High-Net-Worth-Individuals) such as lawyers, accountants and other professionals that have an eye for investment opportunities but are too busy to take an active Business Angel role, preferring instead to become an SR Business Angel and take advantage of the EIS and SEIS tax benefits. In addition, our public market opportunities are open to most retail investors.

Our members include:

» Angel investors looking to diversify their portfolio

» High-earners looking to have more personal choice over their investments than is possible when investing through a fund (avoiding the fees associated with funds at the same time)

» Private investors that have invested in startups before, and want to carry on investing without the legal hassle, or without having to get deeply involved with each business, whilst retaining the peace of mind that having an active Business Angel involved in the companies they are investing in brings

» Investors looking to add public market investments in later-stage companies to their portfolio

» Professionals looking to take full advantage of the EIS and SEIS tax relief schemes

Private Markets

The minimum investment on SyndicateRoom is £1,000.

Note, not all companies will allow for additional funding beyond their minimum funding target.

Public Markets

For pre-IPOs, IPOs and Placings, the minimum investment is set by the company and will be shown for every individual investment opportunity. This figure is normally around £1,000.

There are no upfront or ongoing charges to investors – you keep any profits from your investments. 

We make our money by charging a small fee to successfully funded companies; learn more about the fee structure for companies here. 

SyndicateRoom raises finance for companies operating in most industries. However, we have strong principles and will reject any companies that propose to carry out business related to weapons, gambling, illegal drugs or any other activity we do not agree with, even if the business model is entirely legal. Needless to say, we refuse to work with any companies proposing to carry out any illegal activities. If you have any doubts as to whether your business proposal fits with our principles then it probably doesn't.

Why list with SyndicateRoom?

• Access: Your business is exposed to our network of high-net-worth and sophisticated investors
  
  
• Smart money: Our experienced and engaged investors can offer more than just capital
  
  
• Diversity: It’s not just tech and B2C. Our investors look far beyond the normal Crowdfunding limits, helping us lead in areas such as life sciences and engineering
  
  
• Less negotiation: We don’t impose new legal documents on your round, but we do ensure that SyndicateRoom investors will receive the same price per share and share class as an identifyable 'lead investor' already committed to the round, and that certain core investor protections are in place
  
  
• Less admin: Our nominee structure means that you manage just one legal shareholder
  
  
• Investment size: Each investor contributes a minimum of £1,000 to upwards of £150,000
  
  
• Efficiency: Raising funds typically takes weeks, not months
  
  
• Closure rate: Over 80% of companies that list on SyndicateRoom raise the funds they need
  
  
• Transparency: Flat fee on the funds raised through our platform, plus a one-off legal and compliance fee. We do not take a cut of equity

All our deals must have lead investment and a lead investor.

To request a brochure or more information please email entrepreneur@syndicateroom.com.

Equity investment is a serious matter to us. We are an FCA-compliant platform, and as such we take our duty to prevent money laundering very seriously. This is why we check to see that our investors are who they say they are by asking for their name and address. We require far more information of company directors and significant shareholders before any deal goes live on our platform.

Your privacy and trust are of utmost importance to us. You can read more about how we protect your data in our privacy policy.

To post on SyndicateRoom you need to already have a lead investor investing in your business. This could be a business angel, a venture capitalist or any other investor that invests at 'arm's length', i.e. that is not a relative or a close friend.

As soon as you have negotiated the terms of investment with a lead investor you can get in touch with SyndicateRoom to raise the remainder of your funding round, on the same terms as those you used with your lead investor. If you are using a business angel network to raise finance for your business you can also ask them to get in touch with SyndicateRoom on your behalf.

If you do not yet have a business angel investing in your business, your first point of call is your own network of contacts, or to get in touch with the business angel networks that partner with us.

If you are interested in talking with one of the team about listing a company on SyndicateRoom please email entrepreneur@syndicateroom.com.

Please do! This is a big part of the due diligence process. For each deal there is a 'Questions and Answers' area where you can ask the entrepreneur anything you wish. Any question asked by a potential investor, and their respective response, can be read by all potential investors to ensure complete transparency. 

Each deal has a lead investor investing their own capital into the business. The lead investors have already negotiated a valuation with the entrepreneur that they are happy to invest at. SyndicateRoom members then benefit from the negotiated valuation.

You can read more here about why valuation is so important when investing in startups.

What rights will I have as a SyndicateRoom investor?

There are four terms or ‘investor protections’ that we ensure are always present in the legal documentation for SyndicateRoom deals: pre-emption rights on the issue of new shares, drag-along and tag-along rights and pro-rata voting rights, regardless of the size of your investment.

Pre-emption rights:
Pre-emption rights give an investor the opportunity to ‘follow their money’ as and when a company raises further funding in the future. They give an investor the chance to invest before new investors to maintain their percentage shareholding in the company. It is worth noting that it is common for a company to have provisions in its legal documents to waive pre-emption rights in certain circumstances and to accept new investors onto a funding round before, or without, allowing existing investors the right to maintain their shareholding. As such, it is important to check what percentage of the shareholder/investor vote is required, or in what circumstances the company can waive the pre-emption rights. This information can be found in a company’s Shareholder’s Agreement and/or Articles of Association.

For more detail on pre-emption rights, you might find this Investors' Academy article a worthwhile read.

When you login to your SR account you will be greeted by your personal dashboard. Share certificates for any companies you invest in will be uploaded here and you will also be able to use your dashboard to track how much you have invested by sector, how much EIS and/or SEIS tax relief you have claimed through SR investments per tax year, and so on. It has never been easier to track your investments in startups!

SyndicateRoom allows you to make equity investments into promising, early-stage British companies and exciting publicly listed companies. SyndicateRoom is the only investor-led platform. It gives you access to the same deals that professional, sophisticated, 'lead' investors also invest in. You invest alongside these lead investors at the same class of shares and at the same price per share as the lead investor, and can expect the same legal protections as they do too. This means that for every £1,000 invested, you make or lose the same amount of money as the lead investors. The lead investors negotiate a fair valuation and conduct their own due diligence to satisfy putting their own money in. The same applies to investing in publicly listed shares – you get the same deal as institutional investors.

Read the success stories of some of the exciting and fast-growing private companies that have raised funding on SyndicateRoom.

SyndicateRoom does not provide any investment, business, tax or legal advice. Syndicate Room Ltd is authorised and regulated by the Financial Conduct Authority No. 613021

Networks operate on an invitation-only basis. If you would like to become a member of a specific network you will need to request an invite from the network directly. Please note that network membership varies: some are closed to new members, some are very selective about their membership and some will happily accept any investor. See each network's description and respective website for their specific policies regarding membership.

If you want to become an active business angel and share your experience of business with a growing company you should consider joining one or more networks and attending their pitch events.

However, if you are looking to co-invest alongside lead investors instead you have come to the right place. 

If you are working with a business angel network (or a private equity group or similar) and want to have access to the capital on offer from SyndicateRoom members, you can ask the network to introduce your company to us.

No, you cannot lose more than you invest. The only capital at risk is the capital you invest, but never more than what you invest.

The return on your investment into early-stage companies can take a number of years to come to fruition. Angel investors who invested into Facebook took about eight years before getting a very significant financial return from their investment. Typically companies take between three and seven years to achieve an exit, but this can vary. Indeed, you might lose all the money you invest. Investing in early-stage companies can potentially bring very significant financial gains, but it also carries a very high risk. You can also benefit from the very generous EIS tax relief.

When you join SyndicateRoom you will have to certify that you are one of the following:

1. Sophisticated investor

• I am working, or have worked in the two years prior to the date below, in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises; or
• I am a member of a network or syndicate of business angels and have been so for at least the last six months prior to the date below; or
• I have made more than one investment in an unlisted company in the two years prior to the date below; or
• I am currently, or have been in the two years prior to the date below, a director of a company with an annual turnover of at least £1 million.

2. High-net-worth individual

• I had, during the financial year immediately preceding the date below, an annual income to the value of £100,000 or more; or
• I held, throughout the financial year immediately preceding the date below, net assets to the value of £250,000 or more. Net assets for these purposes do not include:
• The property which is my primary residence or any loan secured on that residence;
• Any rights of mine under a qualifying contract of insurance within the meaning of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; or
  
• Any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be, entitled. 

3. Everyday retail investor (access to Public Markets investments only)

• In the 12 months preceding the date of sign up/investment, I have not invested more than 10% of my net assets in non-readily realisable securities; and
• I undertake that in the 12 months following the date of sign up/investment, I will not invest more than 10% of my net assets in non-readily realisable securities.
• Net assets for these purposes do not include:
• The property which is my primary residence or any money raised through a loan secured on that property;
• Any rights of mine under a qualifying contract of insurance; or
• Any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be entitled.

You can start the registration process here (don’t worry, you’re not committing to invest if you join and it's free to sign up). Essentially, you’ll be certifying that you understand the risks of investing in early-stage companies and that you can make your own decisions.

For a step-by-step illustrated breakdown of what happens after you hit invest, visit our How to invest page. 

If a company reaches its minimum target raise (listed on its profile as 'Capital required') it may wish to raise further capital to, for example, achieve another milestone that costs more money, such as expediting plans to break into a new market.

The company must have outlined from the outset what its maximum overfunding amount would be – and this will have been agreed with the lead investor – as well as what it would use any additional money towards.

The minimum investment during overfunding is £1,000.

The value of an investment made prior to overfunding will remain the same, as the post-money valuation will go up by the amount invested.

Syndicate Room Ltd (“the firm”) take complaints very seriously. Effective and transparent procedures for the reasonable and prompt handling of complaints have been established, implemented and maintained by the firm and are described below.

In the first instance, if you have a complaint, you should direct this to our CEO, Gonçalo de Vasconcelos, at:

Syndicate Room Ltd

71 Regent Street
Cambridge
CB2 1AB
UK

Tel:  01223 478558

These procedures:

• Allow complaints to be made by eligible complainants and any reasonable means
• Recognise complaints as requiring resolution

Once a complaint has been received by the firm, the firm will:

(1) Investigate the complaint competently, diligently and impartially

(2) Assess fairly, consistently and promptly:

• The subject matter of the complaint
• Whether the complaint will be upheld
• What remedial action or redress (or both) may be appropriate
• If appropriate, whether it has reasonable grounds to be satisfied that another firm may be solely or jointly responsible for the matter alleged in the complaint, taking into account all relevant factors

(3) Offer redress or remedial action when it decides that this is appropriate

(4) Explain to the complainant promptly and, in a way that is fair, clear and not misleading, its assessment of the complaint, its decision on it, and any offer of remedial action or redress

(5) Comply promptly with any offer of remedial action or redress accepted by the complainant

The firm aims to resolve complaints at the earliest possible opportunity, minimising the number of unresolved complaints which need to be referred to the Financial Ombudsman Service. Where a complaint against the firm is referred to the Financial Ombudsman Service, the firm will cooperate fully with the Financial Ombudsman Service and comply promptly with any settlements or awards made by it.

On receipt of a complaint, the firm will:

• Send the complainant a prompt written acknowledgement providing early reassurance that it has received the complaint and is dealing with it
• Ensure the complainant is kept informed thereafter of the progress of the measures being taken for the complaint's resolution

If we consider a complaint to have been resolved by the close of business on the third business day following receipt, we will send you a ‘summary resolution communication’, which:

• Refers to the fact that the complainant has made a complaint and informs the complainant that the respondent now considers the complaint to have been resolved
• Tells the complainant that if he subsequently decides that he is dissatisfied with the resolution of the complaint, he may be able to refer the complaint to the Financial Ombudsman Service
• Provide the website address of the Financial Ombudsman Service and refer to the availability of further information on this website

www.financial-ombudsman.org.uk

If the above does not apply, the firm will, by the end of eight weeks after its receipt of the complaint, send the complainant a final response; or a written response which:

• Explains why it is not in a position to make a final response and indicates when it expects to be able to provide one
• Informs the complainant that he may now refer the complaint to the Financial Ombudsman Service
• Encloses a copy of the Financial Ombudsman Service standard explanatory leaflet

It is expected that within eight weeks of their receipt, almost all complaints to the firm will have been substantively addressed by it through a final response or response.

To cancel your investment, click on your name in the top-right-hand corner of any page on SyndicateRoom when logged in and choose ‘My investments’. Here you will be able to see a list of your completed and pending investments.

If you started the investment process but navigated away before completing your payment, the ‘My investments’ page will give you the option to complete your investment (‘Pay now’) or cancel it altogether.

Once you’ve paid, you have seven days to cancel your investment.

SyndicateRoom operates a nominee structure. This means we group together all individual investments and they are held through a nominee, to manage the administrative burden for you and the companies that raise finance on SyndicateRoom. Whilst the SyndicateRoom nominee is the legal owner of the shares, you remain their beneficial owner and retain full economic rights to them.

In practice, the nominee focuses the flow of communication between investors and the companies they have invested in, resulting in a faster and more efficient process.

Related FAQ: 'How does the SyndicateRoom nominee work?' 

Very simply: it acts as a go-between for you and the companies you invest in, to ease the admin burden. The nominee is the legal owner of your investments, but you remain the beneficial owner and retain full economic rights to your shares. This arrangement is created at the point when you decide to invest.

The SyndicateRoom nominee will keep share certificates on your behalf and arrange SEIS and EIS certificates, so neither you nor the company you’ve invested in have to worry about burdensome paperwork. You will still receive a confirmation of your investment and your SEIS and EIS certificates to keep hold of.

Importantly, the SyndicateRoom nominee will not decide how to vote or take decisions on your behalf – it will simply collect your vote or decision and pass this onto the company.

SyndicateRoom will provide company updates and the SyndicateRoom nominee will administer your investment in the case of dividend payments or an exit.

In the unlikely event that SyndicateRoom or the nominee service provider cease trading, shares held by the nominee will be transferred to you as the beneficial owner, who will then become the direct shareholder; alternatively you can instruct that the shares are transferred to a replacement nominee of your choice. 

Voting

You vote through the SyndicateRoom nominee, which will be easier for you and the company. The nominee does not make voting or other decisions on your behalf. You are not prevented from attending company meetings such as AGMs.

Reporting

SyndicateRoom will provide any company updates and an annual review of all your investments.

Investor fees

There are no upfront or ongoing fees for investors – you keep any profits from your investments. 

We only list deals that have 'lead investment'. This means companies with a significant amount of their funding round already negotiated and committed. We then offer our investors the same share class and share price, and ensure our required additional protections are in place (drag along and tag along, pre-emption and pro-rata voting rights). This way our investors' interests are aligned with the 'lead investment'.

• Each company must have a minimum of 25% of their round already in place as 'lead investment'. This doesn’t have to come from one source; it could be from a syndicate of angels. For example, if a company is raising £1m, they need to have already raised at least £250,000 before being considered for listing on SyndicateRoom

• Most or all of the lead investment is likely to be ‘new money’, from an investor investing in the company for the first time

• If there is no new money, we ensure that there is significant ‘follow on’ money from existing investors. We review what ‘significant’ means on a case by case basis - we'll look to see what proportion of investors are taking up their pre-emption rights, as well as how many are investing above and beyond these

See also: Who is a lead investor?

From the pool of 'lead investment', a 'lead investor' is appointed. This may be an individual investing alone or representative of a syndicate or institution.

• The lead investor is generally willing to contribute their time and experience to the investee company, not just their capital, although they are not necessarily the largest or best known investor on a funding round.
  
  
• The lead investor could be either investing in the company for the first time as part of this funding round (a 'new' investor) or an existing shareholder investing again ('following on'). The lead investor's statement will indicate which.
  
  
• You will receive the same class of share, and the same price per share, as the lead investor.

• There might be some differences in the terms between SyndicateRoom members and the lead investors. These differences might be the right to appoint an Investor Director or a Board seat - terms that are generally not feasible for every investor to have.

• On some funding rounds there will be two share classes on offer, for example preference shares negotiated by a VC that are not EIS-qualifying or EIS qualifying shares.
  
  
• On some funding rounds, a lead investor might charge fees for investing in the company, often to contribute towards additional advice or support. These fees will not extend to SyndicateRoom investors, but SyndicateRoom will make the details of these fees visible on the company's fundraising page.

See also: 'What is lead investment?'

Companies pay a 4% commission plus a banded monthly fee on funds raised from SyndicateRoom investors, together with a £1,500 setup fee; 0% will be charged on money raised from investors that companies themselves bring to the round.

The banded monthly fee (minimum £125) is dependent on the amount of investment received from SyndicateRoom investors and begins on the closure of a successful round. This payment ceases to apply on a company exit (IPO or whole business sale).

This monthly cost means that companies will keep more of the capital raised at a time when they need it most, and will be able to spread their payments to make them more manageable. It also covers, amongst other things, the continued maintenance and work of the nominee.

The Leetchi Group started life as a crowdfunding platform and when they couldn’t find a payment service that met the needs of the platform they decided to build one themselves. The success of this development was such that they ultimately spun their internal payment service off as a standalone product: MangoPay.

MangoPay is unique in that it allows for both debit card transactions and bank transfers to be automatically tracked in the system. Investments are held in an escrow account until completion of the round, and are then either transferred to the company upon successful completion or returned to the investor if the target raise is not reached.

Further, for public market transactions MangoPay allows SyndicateRoom investors to make direct investments into IPOs and Share Placings with direct transfers into their share trading accounts.

When a SyndicateRoom investor decides to invest in a company they can make their investment via debit card or, if the investment exceeds £5,000, via a bank transfer. When investing in public market opportunities, investors are able to use Debit Cards for investments up to and including £20,000, and bank transfers for investments over £20,000.

For debit card transactions, first-time investors must enter their card details and their billing address information. Returning investors will see some of the details of the card used for previous transactions have been stored and can proceed swiftly. All card information is stored to PCI DSS standards.

For BACs transfers, investors will be provided with the account details and a unique reference number, which they must use to transfer the money within one working day of clicking to invest.

In relation to private markets investments, once the investment has been committed, the money is held in an escrow account until the end of the round. If the round is successful, the money is transferred to the company. If the round is unsuccessful, the money is returned to the investors’ accounts.

IPO stands for ‘Initial Public Offering’. This is when a company offers its shares to the public for the first time on a public stock exchange such as the Main Market of the London Stock Exchange (LSE) or AIM (a separate market of the LSE for smaller growth companies).

A company ‘goes public’ to raise finance for its business. The proceeds from an IPO may be used for capital expenditure, paying off debt, product or business development, growth or geographical expansion opportunities and more.

In addition to raising finance, an IPO is a valuable opportunity for the company to raise its profile and generate publicity, attract public market investors, and demonstrate to its investors that it will be submitting itself to a rigorous corporate governance and reporting regime.

In a Direct Retail Offer, the company offers its shares directly to investors, often when its business has a large number of customers or subscribers. The offer is coordinated by a Broker/Investment Bank.

In an Intermediaries Offer, the company relies on brokers or financial advisors (referred to as an ‘Intermediary’ or ‘Intermediaries’) to source investors for the IPO. Each Intermediary will offer shares to their retail investor clients and receive orders from those clients. The Intermediary, acting on behalf of each underlying client, will submit one aggregated order to the Broker/Investment Bank that is running the transaction.

SyndicateRoom acts as an appointed Intermediary in relation to such offers undertaken on the SyndicateRoom platform. To apply for shares in an Intermediaries Offer, each investor needs to have an account with SyndicateRoom (or another appointed Intermediary).

A Prospectus is the key marketing and legal document that the company uses to market its shares to the public. A Prospectus must be published for all IPOs that aim to raise €5m and are made available to retail investors.

The Prospectus includes all the material information about the company and the IPO that an investor needs in order to make an investment decision. Typically, it will include (amongst other things) a description of the company’s business, a description of the company’s strengths and strategy, disclosure of historical financials for the previous three years, information about management, information relating to the market and the offer, and key risks associated with the company and the investment.

A Prospectus is published at the start of the offer period and each investor must review it ahead of investing in any company. A Prospectus is reviewed and signed off by the FCA, and the company’s directors take responsibility for its contents.

The Prospectus will be published at the start of the offer period and will be available for the full time that the offer period is open. Once a company has completed its IPO it is obliged to report on a periodic basis. The information within these reports will supersede the contents of the Prospectus.

It depends. The company will usually also publish a factsheet, which is generally a two-sided A4 document that contains key information about the company and the offering. There may also be additional marketing material depending on the individual offering. All the marketing material will be approved as a financial promotion by the investment banks that are coordinating the offering.

SyndicateRoom members will have access to all marketing material that the company publishes for the purposes of the retail offer.

If a company is undertaking an IPO on AIM, and the capital raise is under €5m or the company is offering its shares to institutional investors only, the company will not use a Prospectus but will instead issue an Admission Document. An Admission Document is not approved by the FCA and contains less information than a Prospectus, but is still detailed and includes similar disclosure items.

ITF stands for an ‘Intention To Float’ announcement. This announcement is made by the company when it is confident that it will proceed with the offering of shares. The publication of the ITF also typically starts the public marketing phase of the IPO. The ITF includes key information pertaining to the company and the IPO, and will also be made available to SyndicateRoom members as part of the company’s marketing materials. The Prospectus is typically published two weeks after the ITF is announced.

Once the Prospectus is published the offer period will open. The offer period is typically open for two to three weeks. During this period both retail investors and institutional investors will apply for shares. The retail offer will usually close 24–48 hours before the close of the institutional offer period, however, the company can choose to close the offer period at any time at its own discretion.

Yes. All investors invest on the same terms and at the same valuation. All listed shares rank equally with one another and are freely tradeable on the public market following the IPO.

Typically, IPOs on the main market are not EIS shares as the company making the IPO will likely be too developed and would not qualify. However, there are often IPOs on AIM where shares are EIS eligible.

During the offer period, institutional investors and retail investors may apply for shares. Once the offer period closes, the company and the banks advising the company will be able to see the total number of orders that have been submitted.

The company and its advisors will then make a decision as to how to distribute the shares. The final decision is called ‘allocation’. Allocation is done in accordance with the allocation policy that will have been defined by the company issuing the shares.

Companies that are already listed on the AIM market of the LSE might decide to raise finance on the SyndicateRoom platform. This will be done by selling new shares to selected investors. This type of transaction is called a Placing. In a Placing shares are offered to new investors as well as existing investors and not necessarily on a pre-emptive basis. 

The offer period (i.e. the window in which orders can be made) for a Placing is generally only 24–48 hours. Because the offer period is so short, information on upcoming Placings – including details relating to the company and the offering – will be made available to selected investors before the offer period opens. These opportunities will only be offered to SyndicateRoom investors who have previously made an investment.

As this information is only available to selected investors, it is confidential. If it was to be made public it would likely have a material impact on the company’s share price. This information is therefore likely to be deemed to be ‘inside information’ and as a result, those investors that see this inside information would legally be deemed to be ‘insiders’. There are rules that insiders need to be aware of – for example, they must not disclose inside information to others or trade on the back of that information. Please refer to the article in our Academy section that deals with this in more detail or the related FAQs:

• What is ‘inside information’?
• What is an ‘insider’?
• If I am an insider, what must I not do?
• What are the sanctions for contravening my obligations as an insider?
• What is an Insider List?

Placings are usually offered at a discount to the prevailing market price. They are also usually only offered to institutional investors. It is unusual for retail investors to have access to this type of opportunity. At SyndicateRoom we will offer these investment opportunities to our members, who will be able to invest on the same terms, and the same price, as the institutional investors.

1.    Usually there will be a one- to two-week private marketing period

2.    The offer period will only be open for 24–48 hours during which time orders can be made

3.    During the offer period investors submit their order for shares

1.    We will inform our members that a placing is going to take place

2.    Only signed-up members of SyndicateRoom who have previously made an investment on the platform will be eligible to invest in a Placing opportunity (unless the Placing is made public)

3.    We will invite all such members to view the opportunity and outline the sector in which it operates

4.    Only the first 50 investors that agree to be insiders and click through to the opportunity will be able to participate in the Placing

5.    If those members choose to view the information about the Placing and the offering, they will become insiders

6.    All other members will be able to view the opportunity when the offer period opens if the offer is made available to the public

Inside information is information that:

-       Is precise

-       Is not generally available

-       Relates, directly or indirectly, to particular shares or to a particular issuer of shares

-       If made public, would likely have a significant effect on the share price of the company to which it relates

The glossary to the FCA Handbook sets out the full definition of this term.

An insider is an individual or an institution that has access to inside information.

The individual or the institution will stop being an insider as soon as that inside information becomes public.

You must not buy or sell shares (or other securities related to those shares) in the particular company to which the information relates. You must also not deal in any other listed securities of that company.

You must not disclose the fact that you are an insider, or any of the inside information, to any person.

The maximum penalty for individuals convicted of insider dealing or one of the market manipulation offences is seven years’ imprisonment and/or an unlimited fine.

For each transaction we have an obligation to keep a list of all of the individuals who have access to inside information in relation to the transaction. You will only be able to access placing opportunities if you agree to be added to the relevant Insider List.

This list may be disclosed to relevant regulatory bodies upon their request.

An Open Offer is a pre-emptive offer to shareholders to subscribe for additional shares pro rata to their existing shareholding. This is not a rights issue. In a rights issue, the ‘right’ to subscribe for the shares is a tradeable security.

Often a Placing is combined with an Open Offer. New shares are placed with new investors subject to an Open Offer to existing shareholders. In practice, the placing of new shares takes place first, and then the remaining shares are offered to existing shareholders.

Any shares that are not taken up by existing shareholders under the Open Offer will then be automatically taken up by the new investors. If existing shareholders do not take up the shares, new shareholders will benefit from the discount.

Sometimes the Placing and Open Offer are structured in such a way that the existing shareholders are able to ‘clawback’ shares from the new investors so that they can invest pro rata to their shareholding.

Join SyndicateRoom

You can apply for shares by visiting the pages for an individual IPO or a Placing. Follow the links from the Public Market page. The steps for making an application are as follows:

(1)  Review Prospectus/marketing materials

(2)  Agree to terms and conditions of the offer

(3)  Apply for shares

(4)  Transfer cash

Each offering will have a minimum amount that you can apply for, but it will vary each time.  The minimum investment amount will be stated clearly for each IPO or Placing.

The specific period will vary for each IPO. In general, the offer period is open for approximately ten working days. It is important that you check the timetable for each IPO.

Remember that the company can close the offer period early if there is significant demand. You will be informed if the offer period closes early.

Don’t worry: if you don’t have a trading account, you can seamlessly open one with Selftrade (our appointed broker) during the share application process for an IPO or a Placing.

Our appointed broker, Selftrade, will provide you with execution-only trading accounts to hold your share allocation(s). If you do not already have a Selftrade account, your account will be opened when you make your first public equity order through SyndicateRoom.

Once you have been allocated public market shares, you will be able to view these shares in your trading account. To access your share dealing account please log onto https://selftrade.co.uk/login. For security reasons, these log-in details will be sent to your postal address.

If you already have a Selftrade account, you will still be able to make your order through the SyndicateRoom website and the shares will appear in your trading account.

We will inform you by email as soon as the account has been successfully opened, along with your account number. Selftrade will send your PIN for your account to the postal address that you have registered with us. If you make your order before midday, the details will be posted the same day as you make your order. Once you have received your log-in details you will be able to see the cash in your account.

Once you have opened an account with Selftrade, you will be able to log into it at https://selftrade.co.uk/login using the account number and PIN sent to you by post.

Selftrade does not charge for opening an account. However, there are charges for aftermarket trading. Please see a full list of charges on the Selftrade website: https://selftrade.co.uk/our-services/our-charges

In summary, the key charges are as follows:

Account opening: No charge

Online rate per trade:

£12.50 (standard rate)

£6.00 (frequent trader rate)

Frequent trader rates apply after 100 trades made by a customer in any one calendar quarter.

Telephone trading:

<£2,500 = £17.50 fee

£2,500–£100,000 = £40 fee

£100,000< = call Selftrade for a quote on 0345 0700 720

If you decide to hold your shares, and purchase no further shares, there is a Trading Inactivity Fee of £8.75 + VAT per quarter. This Trading Inactivity Fee applies per customer and covers all Selftrade accounts held in your sole name. If you make a single trade in any of the accounts you hold in a calendar quarter, none of your accounts will attract the fee (this does not include Investment Club, joint accounts and corporate dealing accounts, which are treated separately)

Please refer to the link above for the most up-to-date information.

Your account will be set up at the first time that you apply for shares in an IPO or a placing. You will keep the same account for future IPOs or placings.

Yes. The cash will be transferred to your trading account when you make the application for shares.

When investing in public market opportunities, you will be able to use debit cards for investments up to and including £20,000 and bank transfers for investments over £20,000.

Please note that we must be in receipt of cleared funds by the time that the public market opportunity closes on the SyndicateRoom website. If you are making a bank transfer please make sure that funds are transferred in good time. If we do not receive cleared funds in time, your order will not be processed.

Your cash will be placed into your Selftrade trading account.  Your cash is protected for you. In the unlikely event that either SyndicateRoom or Selftrade goes into liquidation following the transfer of your cash, your money will not be available to creditors.

It depends. You may get allocated the full amount of shares that you apply for. However, it is possible that retail demand outstrips the number of shares reserved for retail investors.  Should this be the case, each retail investor will be allocated shares pro rata on the same terms, and you will be allocated shares also on that basis.

At the point that the shares are allocated, the cash will be taken out of your Selftrade account and replaced with shares. Following this, you will see one of the following in your Selftrade account:

(a)  Full allocation

If you are allocated the full amount of your application, you will see only shares in your account.

(b)  Partial allocation

If you are allocated a portion of the shares that you applied for, you will see a mixture of cash and shares.

(c)  No allocation

In the unlikely event that the IPO is cancelled during the offer period or there is no allocation applied to retail investors, you will only see cash in your account.

On the allocation date you will be sent an email by SyndicateRoom informing you of your allocation.

You can instruct Selftrade to transfer any cash remaining in your account back to your nominated bank account, you can leave it in your trading account for use in any other trades you may wish to carry out through Selftrade.

Yes. You will be able to sell your shares, hold your shares or transfer your shares to another broker account in your name.

If you need to make any alterations, please email SyndicateRoom at team@syndicateroom.com.

Investing in any type of equity carries significant risk, however, investing in early-stage companies is particularly risky due to the early stage nature of the business and lack of liquidity. You should not invest unless you are prepared to sustain a total loss of the money you have invested. Any decision to invest must be made on your own account and you must read all the documentation that is provided in relation to the investment opportunity. SyndicateRoom will not provide any advice on these investments. We will only execute the transactions for you. You will therefore be responsible for any loss as a result of any investment.

Please ensure you fully read and understand the risks involved in any decision you make. If you have any doubt whether any investment is suitable for you, you should obtain independent and expert advice.

1. Minimum equity funding round of £150,000
2. 25% of the equity sought already committed
3. Named lead investor(s)
4. Secured investment from ‘arm’s length’ investor(s)
5. Company must offer SyndicateRoom investors same share class and price as lead investor(s)

SyndicateRoom currently accepts investments from people in the UK, EU, Nordic countries, United Arab Emirates, Singapore, New Zealand, and Hong Kong.

At present we cannot accept investments from the US, Canada, Brazil or Argentina.

If you aren’t sure whether you can invest from where you are, please contact us and we’ll be able to let you know. 

A lift round is a funding round that has raised its minimum funding target from an angel syndicate or other professional investors before the opportunity goes live on SyndicateRoom. In such cases, we will have negotiated an exclusive chance for our members to invest in an extension of the round.

A lift round has the following rules:

• Minimum investment remains £1,000
• Minimum target already achieved; lift rounds will always successfully close
• As with all SyndicateRoom investments, SR investors receive the same share price and same class of share as the lead investors

You will be able to see how many of the remaining 50 preferential allocation slots there are and how many members have expressed their interest

We can work with the broker to structure a transaction with both institutional investors and the interested SyndicateRoom investors.

All SyndicateRoom members will be held through one nominee managed through Selftrade.

If you are in the first 50 investors to do so you will receive preferential allocation in the event a potential offering is subject to scale back

If you are lucky enough to receive a spot in the first 50 investors we will inform you.

If you make a downpayment and then fail to transfer the remaining funds when a deal is negotiated, you will lose your initial down-payment.

Simple, make sure you are in the first group of 50 investors to express interest and put down a downpayment on a WatchListed stock

If you do not make a downpayment you will not be able to invest if we secure a deal with the company.

Yes you can, but you will not be driving demand for a potential placing and will therefore not be able to buy the stock at a potential discount

Yes, but you can cancel or change your application amount or discount at any point before a placing is announced.

There is no guarantee that a placing will take place or that if a placing does take place that the company will choose to use SyndicateRoom.

When you pay your downpayment, it is important to make sure the minimum discount that you are willing to purchase new shares at is as small as possible to ensure you are included in the top 50 investors.

Until a placing is announced, you can request that your downpayment be refunded at any point and your application will be cancelled. If we remove a company from the WatchList, your downpayment will be refunded.

No. There is no guarantee that the company will choose to raise finance through SyndicateRoom or that it will undertake a placing at all.

You will only be asked to invest in a placing if the placing price represents at least the discount that you have expressed when you made your application.

Example 1:

If you make a downpayment of £1,000 at a 15% discount and the placing is announced with a 10% discount, you would miss out on the placing

In this case you would receive no new shares and be refunded your downpayment amount.

Example 2:

If you make a downpayment of £1,000 at a 5% discount and the placing is announced with a 10% discount, you would be included in the placing.

You would receive new shares at a 5% discount to the pre-announcement market price.

The discount will be based on the lower of either:

1. the average previous 30 day closing price; or
2. the closing price on the day that the placing is agreed.

Your downpayment will be held in a secure escrow account.

Once a deal is agreed, your cash will be placed into your Selftrade trading account. In the unlikely event that either SyndicateRoom or Selftrade goes into liquidation following the transfer of your cash, your money will not be available to creditors.

An easily digestible amount of information on WatchList companies is available to investors who are then on a preliminary basis able to indicate their interest in a listed company.

Types of publicly available information that would be available include, but not limited to:

• Brief overview of the company
• ‘Why invest?’
• About the company
• Summary of management
• Link to annual company report
• Summary financials (where available)
• Third-party research (where available)

The aim is to use all existing information in an effective way to attract previously untapped demand.

It is important to note that the information contained on the WatchList pages does not constitute an offer or an invitation to purchase securities in the relevant company. Please note that these webpages have been prepared using publicly available information and Syndicate Room Ltd does not make any warranty as to its accuracy or completeness. Any opinions set out herein are the sole responsibility of the person making the statement and Syndicate Room Ltd has not verified such opinion. Syndicate Room Ltd does not accept responsibility for the accuracy of the information, which may change. No information within this webpage should be taken as an investment recommendation or a recommendation to buy shares in the company mentioned.

The contents of these webpages are for information purposes only and should not be relied upon if you do make an investment decision. If you are in any doubt about the contents of these webpages you should consult your stockbroker, bank manager, solicitor, accountant or other appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) ('FSMA').

Please note that this document should not be provided to any other person, other than any advisor as provided above.

EIS Tax Relief Report

If you are an institutional investor backing a deal on behalf of a company you may be able to get EIS/SEIS tax relief; this is entirely dependent on your personal circumstances. To find out, you will need to consult a qualified accountant.

See also: What is the process for obtaining EIS certificates? 

A ‘soft-close’ round allows companies to raise investment on SyndicateRoom without having a preferred minimum target.

Funding rounds come in many different shapes and sizes. The most common structure for an early-stage equity investment round is the one SyndicateRoom members will be most familiar with: a company seeking a specific amount of capital to achieve a defined goal, for example to build a new website or develop a particular product.

Often the lead investment will commit but won’t transfer money until the company reaches the set funding target.

This structure works well typically for smaller rounds and younger companies.

For companies that are still ‘early-stage’ but are a little further down the line, the picture is different. Often such companies will be in revenue or have a comfortable nest of cash already backing them up, and will be looking for larger sum of growth capital to be rolled out over a longer period, and for less specified spending.

Raising a larger sum of money, say for a Series A or B round, would ordinarily require either a series of small rounds throughout the year, or a single large round that would only close if a full target was met. Both options require a lot of ongoing effort and resources, and don’t guarantee funding at the end using the established ‘all-or-nothing’ approach; if the round doesn’t hit its target, the company gets nothing and must use even more time and resources on another round.

If the lead investment are comfortable that the company is developing and growing, they will likely be happy to contribute capital to facilitate this growth at the point in time they review the investment, not waiting for others' commitments to be demonsrated first.

This is where the ‘soft-close’ round comes in. A company still requires lead investment, per the standard SyndicateRoom criteria, but this can close on an ongoing basis. As such, SyndicateRoom members can also invest as much or as little as there is interest for.

Soft closes are likely to involve larger rounds for somewhat later-stage and normally revenue-generating companies in a good cash position that require capital to continue growing. They give you the ability to do exactly what the lead investor is doing: invest in a company you believe in without the limitation of an all-or-nothing funding target.

Q: Is it debt or equity?

A: Investment into a company via a Convertible Loan Note (CLN) is not for equity initially. However, it is essentially a loan to the business that has the option or requirement to convert to equity shares at a price that is yet to be determined. The valuation is not usually defined when the investment is made. It is usually also possible for the loan to be repaid in certain circumstances including any coupons.

Q: When will I receive shares in the company?

Conversion into equity occurs on the next qualifying funding round or when a certain date or duration is met. What is classed as a qualifying funding round will be set out in the terms of the Convertible Loan Note.

Q: At what price will the investment convert?

A: The price per share that will be allocated is not always a complete unknown. There is sometimes/usually a maximum share price stipulated in the term sheet. Shares may be issued at the lower of the max share price or a discount on the next qualifying funding round.

Q: What is the coupon?

A: The coupon is the amount of interest that accrues while the loan note is unconverted. This is set out in the term sheet and may accrue daily, monthly or annually. Occasionally, the terms are such that this interest can be paid out in cash and others may offer the return of the principal also. Other times the interest is added to the amount of investment paid on the outset and on conversion the total will be converted into shares. Please note, not all CLNs have a coupon attached and it is important to check the term sheet in each case to see which the company is offering.

Q: Under what circumstances is the investment repaid?

A: There is a longstop date by which the investment must be converted into shares. If the company has not reached the funding target set out in the term sheet to trigger conversion by the longstop date, the investment plus any interest is usually repaid in full. There may also be other causes for default set out in the term sheet or it may be chosen by the investor upon conversion.

Q: What if I want my investment to be converted into equity before they hit their target for a conversion event?

A: In some cases, it is possible to notify the company at any point to convert the investment into shares at the max price set out in the term sheet. This will be highlighted in the term sheet.

Q: What if the company is sold before a qualifying funding round and my investment has not been converted into shares yet?

A: In the event of a sale of the company before a conversion event, usually the company will issue a conversion notice and a redemption notice for investors to decide which to opt for. Please note, each CLN will have different terms around this and it is important to check the term sheet in each case.

Q: Is the CLN secured?

A: In some cases, the CLN is secured, however, most likely it will not be as it is usually thought of not as a debt instrument but rather as prepayment for shares.

Q: What class of shares will my investment be converted into?

A: Each term sheet will be different. Occasionally, companies request for the share class to be selected when making the initial investment. Other times, it is to be selected on conversion.

Q: Will I still receive the same economic terms as the lead investors?

A: You will be offered the same term sheet as the lead investor, including the classes of share on offer upon conversion. There may be an alternative option offered in the round, but you will be able to invest alongside the lead investor.

Q: Is it debt or equity?

A: Investment into a company via an Advanced Subscription Agreement (ASA) is purely an equity agreement. The intention is for investors to pre-pay for shares that will be allocated during a subsequent funding round at a discount to the pre-money valuation as stipulated in the Advanced Subscription Agreement. Unlike a Convertible Loan Note (CLN), monies invested through an ASA cannot be repaid in cash. As such and ASA is equity whereas a CLN can technically be both.

Q: When will I receive shares in the company?

A: Shares are usually issued on the next funding round subject to the company hitting a pre-determined target as set out in the ASA. Should the requirements not be met, come the Long Stop Date, the number of shares that will be allocated is determined by the Long Stop Price.

Q: At what price will the investment convert?

A: The price at which shares will be allocated is usually determined by the next qualifying funding round as stipulated in the ASA. This will either be at a discount to the price per share of that round or there will be a stated maximum share price at which it can convert.

Q: What if the company becomes insolvent before a qualifying funding round and my shares have not been allocated yet?

A: This is dependent on the terms of the ASA. In some cases, the monies invested through an ASA that has not been allocated yet will be treated as debt and can be repaid in cash, ranking alongside other unsecured creditors of the company.

Q: What if the company is sold before a qualifying funding round and my shares have not been allocated yet?

A: In the event of a sale of the company prior to a qualifying funding round, often shares will be allocated just before the funding round at the sale valuation or a discount to the sale valuation – as stipulated in the Advanced Subscription Agreement.

Q: What if the amount I invested is not divisible by the price per share when it comes to allocation?

A: This is dependent on the terms of the ASA. In some cases, the company will allocate shares rounded up to the nearest whole share. In some cases, the company will allocate the number of shares that are fully paid for and investors will be required to pay any extra to make up for fractions of shares.

Q: Can you receive interest on monies invested in an ASA?

A: It is usually not possible to receive interest on monies invested through an ASA as it is purely an equity instrument.

Q: Are the shares SEIS/EIS eligible through an ASA?

A: Whilst it is not possible for Convertible Loan Notes to be EIS eligible, it is possible for ASAs to be, though not all are. The company will provide information on whether they have been advised that the structure of their ASA is SEIS/EIS eligible.

Q: What class of share will be allocated to me?

A: This is dependent on the terms of the ASA. In some cases, there may be a choice of which class of share to subscribe for, while other times this will be set. Whether there is a choice or a set class of share, these will be the same terms as the lead investor is subscribing for.

We require that companies report to their SyndicateRoom shareholders on a quarterly basis.