A more recent crowdfunding site is SyndicateRoom.com, whose model differs. Here, small investors are sought to “top up” substantial stakes in a business that has already been bought by established “dragons” or lead investors.
Usually the lead investors contribute 50pc to 60pc of a firm’s funding, says Goncalo de Vasconcelos, one of SyndicateRoom’s founders. “Small investors have the same class of shares as the large investors, and they will benefit in exactly the same way. The lead investors cannot exit or profit in any way differently from another investor. Everyone’s interests are aligned.”
Another, also from SyndicateRoom, is Eagle Genomics, an established business involved in DNA data analysis, which is seeking £1m. Lead investors have provided £300,000 and so far other, smaller investors have contributed a further £190,000.