Cambridge, 1st May 2015
SyndicateRoom’s £1.2 million funding round for its own business is more than twice oversubscribed a week before it opens
SyndicateRoom opens an investment round for its own business on Friday 1st May to raise £1.2 million, and to increase numbers of ‘owner advocates’.
As this round is at least twice oversubscribed even before launch, new investors are being limited to a £5k maximum investment each.
Overfunding beyond the £1.2m is not being allowed as SyndicateRoom’s unique model is proving so successful that the business does not need more at this stage.
This round is being led by super-angel Jonathan Milner who has negotiated the valuation, agreed all the terms of the deal and is investing over £250,000 of his own money. As with all rounds on SyndicateRoom, all investors will enjoy the same economic terms as Dr. Milner.
SyndicateRoom, the unique investor-led equity crowdfunding platform, will today open an investment round for its own business, seeking to raise £1.2 million based on a pre-cash valuation of £7.2m and recruit larger numbers of investors who become important brand ambassadors for the business. More than a week before the round opened, SyndicateRoom’s existing investors had already sought to invest more than twice the target amount.
The startling success of SyndicateRoom since it opened just over 18 months ago - doubling in size every quarter - means that the business only needs £1.2 million in additional funding at this stage and so the round is being capped at that amount. This raise is as much about taking the opportunity to increase numbers of ‘owner advocates’ - investors who love SyndicateRoom’s unique approach, want to share in its success and who champion it amongst their own networks of contacts. Given this important strategic objective, and the huge demand from SyndicateRoom’s existing investors, the maximum amount each new investor can make is being capped at £5,000.
Although SyndicateRoom launched significantly later than the other two of the ‘Big Three’ equity crowdfunding platforms in the UK (Crowdcube and Seedrs), its unique investor-led model has produced remarkably fast growth, as it has attracted sophisticated, IP-heavy businesses and discerning, committed investors. To date it has helped over 30 companies raising more than £20 million, with the average round being more than £600,000 and the average amount from each investor being £15,000 per investment. Notably, there has yet to be a single failure amongst the businesses SyndicateRoom has funded.
Goncalo de Vasconcelos, founder and CEO of SyndicateRoom said,“The enormous demand from our existing shareholders to invest more in SyndicateRoom is an obvious validation of our unique approach to equity crowdfunding and tells us we are very much on the right track, even if it is a verydifferent one from the other two big players in the sector. With every investment round on SyndicateRoom being led by one or more experienced angel investors or VCs – negotiating the valuation, agreeing all the terms and investing significantly themselves, and then sharing these exactarrangements with all investors who join the round – our model offers greater fairness and transparency for investors than any other.
“As business is going so well, we only need to raise £1.2m at this stage, but we have tried to do this in a way that will allow many new investors to join us. We know that the way we operate makes our shareholders enthusiastic advocates for SyndicateRoom, which expands our reach to the right people without having to spend a fortune on advertising.
“Because we are not overfunding, we know that a number of people will miss out on this round, but we hope to be able to welcome them in future raises down the line.”
Jonathan Milner, super-angel and lead investor for this round said, “I have been a board observer in the business for over a year. SyndicateRoom’s vision, values and team make it an incredibly exciting business and I look forward to investing alongside others in this funding round.
“SyndicateRoom has demonstrated that when done properly, where the interests of investors are genuinely balanced with those of quality, serious businesses seeking investment, equity crowdfunding can be a huge force for good for both investors and industry. As an experienced angel investor, I know how crucial fairness and transparency are to successful investment, where both sides win, and SyndicateRoom unquestionably leads the way in this regard.”