As a follow up to the two-page plain English Seedrs Term Sheet we launched earlier this year, we now have a version of the document for convertible equity campaigns. We believe that raising capital should be transparent and simple – including nuanced fundraising structures like convertible equity.
The new plain English convertible equity crowdfunding term sheet from Seedrs contains a summary of the key legal terms.
Seedrs convertible investments use exactly the same nominee structure, and go through exactly the same due diligence process, as Seedrs equity investments. For more information on the structure and due diligence process, please see our Term Sheet for equity investments.
Because Seedrs convertibles are a different type of investment to standard Seedrs equity, the investment process and documentation are a bit different. Our convertible equity term sheet summarises the differences between convertible and “normal” equity investments and sets out the key terms of the documentation.
Some of the most important things that a startup can do to make their equity crowdfunding campaign successful happen before the campaign is even created. Equity crowdfunding is a great way to raise capital for an early stage business but it needs to be done properly. I’ve seen startups make all sorts of mistakes, so I wanted to share some of the most important lessons that we’ve learned.
The most important work for a crowdfunding round happens before the campaign goes live.
As the Chief Marketing Officer of Seedrs, I spend a lot of time speaking with entrepreneurs who are trying to raise funding. One of the most misunderstood, but important parts of our business is the nominee structure. The nominee structure is designed to take care of the back-office investment details so that the entrepreneur can focus on getting out there to connect with their investors.
Drummond Gilbert recently raised £50,000 investment for his collaborative consumption car share startup, goCarShare, from 145 backers through Seedrs.
Drummond Gilbert in Tech City News
Drummond did a lot of research before setting up his investment campaign and learned a lot first-hand, which he recently shared with Tech City News readers interested in what it takes to create their own successful pitch.
With more and more entrepreneurs turning to crowdfunding to access key capital for their early growth, Marca Me got in touch with funded Seedrs startups to find out the secret behind a successful crowdfunding campaign. Some of their findings were too good not to share, so we’ve copied their blog article, below.
In the year since Seedrs launched, we have been learning constantly what differentiates successful from unsuccessful campaigns. The more we learn, the more we try to communicate to the entrepreneur what does and doesn’t work so that they stand the best chance of raising the funding they are seeking.
Earlier this month, we published a blog post about the importance of momentum. TechCrunch also ran a piece based on the data we had gathered.
The investors who use Seedrs fall into two broad categories. Many are independent investors, people who have come to Seedrs to browse, discover and invest in great startups. Others are network investors who have used Seedrs to invest in a specific startup.
PixelPin co-founder Geoff Anderson revealed to Startups.co.uk how they closed their pitch in record time and shared tips for how other entrepreneurs can do the same.
He also highlighted why PixelPin chose Seedrs to raise crowdfunding and weren’t afraid of having 193 investors invest in their growth.
Read the artcicle over on Startups.co.uk.
Friends and family are often the biggest supporters of seed-stage businesses. But, offline investing often requires investors to invest rather large sums (£10,000 to £25,000 minimum) to make the legal paperwork worthwhile. Unless an entrepreneur has wealthy friends and family, this can be very difficult to raise.
One of the main benefits of equity crowdfunding is that it makes it possible to raise smaller amounts of investment from friends and family – allowing them to more easily experience the rewards that come from investing in these startup companies.
This month, we’ve already seen the fourth Seedrs startup reach 100% of their investment amount. These successes have provided us a few early lessons on things for both entrepreneurs and investors to take note.
Looking around for the right investment fit for your needs is like going out on dates and can be as important as a marriage in the long-term. So, how do you know when an investment really is “Mr. or Ms. Right”? There are a few things to look out for to help you determine if you’ve found a great fit.
Setting up a business can be a hugely exciting adventure, but finding the funding to make it a success can be one of the most challenging bits. So, we’ve broken down the options for entrepreneurs and gone back to basics with the ABCs of raising early-stage capital.
One of the hardest parts of raising early-stage seed capital for a startup is agreeing a value for the equity on offer. At Seedrs, we love idea stage companies, but we have learned a lot about how investors view new startups. Sorry everyone…I have some bad news. An idea on its own is not really worth that much. There are lots of other people with great ideas.
Valuing an idea stage company involves several factors.
The real value in a business comes from how the idea is executed. While there may be loads of people with a similar idea to you, you have the opportunity to create a valuable business by executing the idea better. The problem is that for an idea stage business, seeking its first round of seed capital, it often hasn’t started to fully execute the idea enough to demonstrate value.
Now that we’ve had the opportunity to review a number of great startup listings that have been submitted to us, we thought we’d offer some advice for entrepreneurs to consider when creating their listing (or any other pitch to investors) to ensure they are getting the most out of the opportunity to showcase their business and raise capital.
Raising an initial round of capital for your early-stage startup can be overwhelming. So, we’ve created a quick list of tips for entrepreneurs looking to raise funds from the crowd to keep you focused, realistic and ready to succeed.
Read our tips below and if you would like a little more detail, check out my video discussing five of these tips over at the AXA Small Business YouTube channel.