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?