Category Archives: Investment

Seedrs Welcomes Domaine Chanzy as First IPO Campaign

Domaine Chanzy Seedrs

Today sees the launch on Seedrs of a campaign for Domaine Chanzy SA, a leading Burgundy winemaker. What makes this campaign exceptional is that it is part of Domaine Chanzy’s IPO on the London Stock Exchange’s Alternative Investment Market (AIM). The ticker symbol will be “WINE”.

Last September, Seedrs broke ground by hosting the first-ever equity crowdfunding campaign for a quoted company, Chapel Down. That campaign was huge success, raising £3.95 million through its crowdfunding and placing components.

At the time, our Chief Investment Officer, Tom Davies, said on Bloomberg that he thought it was only a matter of time before we started seeing IPOs raised through Seedrs. Even he didn’t realise that it would happen so soon.

Domaine Chanzy is looking to raise a minimum of £1.9 million to fulfil the ever-increasing demand for its award-winning wines and satisfy its working capital requirements. Upon admission, the winemaker will be the only French company listed on AIM. In parallel with crowdfunding campaign, Domaine Chanzy is raising funds through a placing led by several City corporate finance firms.

The Domaine Chanzy campaign is a significant step forward for equity crowdfunding in Europe and opens up the opportunity to participate in IPOs to a much wider range of investors. Here are a few reasons why we think it’s so interesting:

  • Investors large and small will be able to invest as much or as little as they like, from £10 up.
  • In addition to the shares they purchase, investors will be offered substantial discounts on Domaine Chanzy wines. Those who purchase a minimum of 1,000 shares (£1,200) will be entitled to discounts of up to 55% on wines ranging from Domaine Chanzy’s entry-level offerings to its premier Grand Cru.
  • The shares will qualify for Enterprise Investment Scheme (EIS) relief.
  • Investors who invest through Seedrs will be represented by us as nominee. This means that they will not need to establish separate brokerage or trading accounts. Investors will be free to sell their shares on AIM at any time (provided that sufficient demand exists).

We are proud that a company with a regional wine making heritage that goes back almost 250 years chose Seedrs to raise funds in an innovative way. It’s a great opportunity for the company to raise investment from a larger, more diverse, base of investors, enhance its profile among UK and other potential consumers in Europe and an appealing way to build long-term brand engagement among a wide base of investors.

Our vision has always been to provide a platform for people to invest in the businesses they believe in. Being a part of the AIM float for Domaine Chanzy further showcases our dedication to innovating fundraising and democratising investment.

To see Domaine Chanzy’s campaign, please visit: https://www.seedrs.com/chanzy.

Convertible equity term sheet

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.

Convertible Term Sheet

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.

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Seedrs opens Convertibles to the crowds

Seedrs achieved another first today by launching the first ever convertible investment round on a crowdfunding platform. Future Ad Labs, one of the earliest campaigns to raise money on Seedrs nearly two years ago, has returned and will be the UK’s first startup to use the new form of funding.

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The convertible will allow investors to invest in Future Ad Labs today, with their investment converting into shares in the future at a discount on the future valuation. This means that Seedrs investors will receive more shares for their money than future investors.

Convertibles are very popular among startups and investors in Silicon Valley. They offer a way to raise and invest money now, while deferring the need to place a value on the company until some time in the future. This can be particularly useful when a startup is looking to raise large venture capital funding in the near future, but doesn’t want a valuation placed on their company now which may affect those negotiations.

Following the launch of convertibles, investors can now use Seedrs to invest in the equity of high-growth businesses in three different ways. In addition to straight equity campaigns, Seedrs pioneered the use of fund campaigns last autumn, and convertibles represent our third offering.

All three types of campaigns are about investing in real shares: we believe that when you invest in a business at its early, risky stages, you should get to participate in its upside—which is something that debt and rewards don’t allow.

Each type of campaign in Seedrs gives investors a different way to get equity exposure, from investing directly into a single business (straight equity), to investing in a pool of businesses (funds), to joining a future fundraising round at a discount (convertibles).
For more information on how our three types of campaigns work, and how they differ from each other, please see our new guide the types of campaign.

Future Ad Labs has been a major startup success story. The company has developed a portfolio of game-changing advertising solutions that replace frustrating experiences on the web with interactive advertising formats.

One of Future Ad Labs’s predecessor companies, Digital Spin, began life by raising £60,000 from 70 investors via Seedrs in July 2012.  After merging with Future Ad Labs, the business went on to receive a further $1 million investment from venture capital firms as well as other industry angel investors in 2013. Passion Capital led the investment round and other investors include Balderton Capital and Ballpark Ventures.

For more information about Future Ad Labs, please see their campaign.

Guest user – My first 3 months as an angel investor

With stock markets dizzy eyed at what the ECB might do next, broader investor sentiment remains a bit muted into what is traditionally a sketchy time of year. The basic reason is that there are lots of people out of the office. High days and holidays loom large after a winter burning logs and watching re-runs of Dad’s Army and that means that the market takes on a lethargic air. Yet the startup scene is not known for its buy-in to holiday season and the Seedrs platform continues to be crowded with some attractive looking ideas.

A few months into my life as an angel and there are a couple of things that I’ve picked up. I thought I’d take a moment to share a few of the key things that I’ve learned from my foray into angel investing.

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Guest user – Investing in consumer confidence

Big deals. They get the merchant bankers excited, and with memories of the financial crisis slowly fading, big deals have been back on the radar. Big deals show that the economy is on the mend. Confidence is back in the boardroom and the evening news is less about austerity measures and more about $100bn mergers. This is also good news for startups, who are right at the coal face of the economic recovery and will benefit considerably from optimistic headlines. Consumers watching the news (with a chicken jalfrezi straight out the microwave) are going to start thinking about adding a notch back onto the belt of the household budget. Confidence is a powerful commercial aphrodisiac, forget oysters and champagne, consumer confidence is where it’s at.

Seedrs guest investor programmeSo where is all the money going to go? Retail. We are all secretly lazy, which is why we all seem to like the fact that we can now lie on the sofa and buy stuff. We also love stuff. Which is why in Britain we spend more money on useless tat than any other country in the developed world. Consider the spate of recent IPOs from companies that sell everything from tumble dryers to packs of dog food. And they deliver. Bargain.

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Guest user – Investing in products you could see yourself using

This week we have a new guest investor. Sam has looked at the currently live startup campaigns on Seedrs and decided what to invest in. In this article he shares with us what he chose and why.

Sam Macrory

Sam Macrory is a Seedrs user and has shared the story of how he chose two recent investments.

Sam Macrory, previously Political Editor of House magazine, became the Editor of Total Politics in May 2013. He also blogs at http://www.sammacrory.com and tweets at @SamMacrory.

I can honestly say I’ve never been more tired…

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Guest user – Choosing my first startups to invest in online

This article first appeared on Mark Hepburn’s blog Hepburn Says. Mark is a client relationship manager at a well known asset management firm based in London.

Mark Hepburn Investment

Mark Hepburn is a guest author. His articles appear first on the blog Hepburn Says.

The IPO market is getting a little bit squeaky. King Digital, the maker of the game Candy Crush, listed on the New York Stock Exchange recently with an initial valuation of more than $7bn. The stock then fell. Quite a bit. But still, $7bn for company that gets most of its revenues from Candy Crush, a game that has commuters staring blankly into their smartphones trying to make lines of sweets disappear. And that’s it. A game that has apparently been downloaded by 93m people who seemingly have nothing better to do on the way home. I don’t know what that says about modern society but you have to feel for the likes of Hemingway and Dickens. The valuation of the business today, however, is of little concern to those who put up the initial cash to make the game, as they are probably down Saville Row trying on velvet and barking at the tailor to make their paunch disappear. They are now properly minted, further stoking my coals for seed investing. The weekly email from Seedrs then had me reaching for the lighter fuel to further stoke said coals. Time to choose my first startups to invest in online.
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Guest user – Confessions of a first time angel

This year we’re inviting a few journalists and interesting characters to try out Seedrs and write about their experiences here on our blog. Authors are given £100 to invest in a startup of their choosing. We publish their articles without comment or endorsement. The authors are not providing advice on which startups to invest in and nothing in their articles should be construed as financial advice. You can apply to be part of the programme and try out the Seedrs platform by providing a writing sample to marketing@seedrs.com

Mark Hepburn

Mark Hepburn is a first time Seedrs user and will be sharing his experiences. These articles appear first on his blog ‘Hepburn Says’.

Mark Hepburn is the first of our guest users. Mark is a client relationship manager at a well known asset management firm based in London. His articles appear first on his blog Hepburn Says where he also writes about investing, markets and the English middle order.
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Protecting small investors in equity crowdfunding rounds

People invest on Seedrs for many reasons. To support friends or family, because they love a particular business idea, or they just want to invest in a new asset class. But one thing that our investors have in common is that if the company they invest in is successful, they want to share in that success.

Investor Protection

In traditional forms of financing, large professional investors will agree terms with a company to prevent their investment from being diluted when the company issues more shares, and to ensure they benefit from share sale opportunities.  However, normally a small investor simply will not have the leverage to negotiate such terms.

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Luke Johnson at the UK Business Angels Association

Luke Johnson, chairman of the Centre for Entrepreneurs is an investor in Seedrs through one of his funds. He gave a wonderful speech at the UK Business Angels Association networking dinner on 28th January 2014.

Luke Johnson

Luke Johnson speaking at the UK Business Angel Association.

The original transcript is available on the blog of the Centre For Entrepreneurs. Luke has kindly given us permission to share the speech with you because it sets out the importance of angel investment to the British economy…

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Claiming EIS and SEIS Relief

We are beginning to receive the SEIS and EIS tax certificates from HMRC for the first companies to fund through Seedrs, and I wanted to take this opportunity to explain to you how the process works for you to claim relief. A detailed explanation is below, but the most important bit is that if you have made an SEIS- or EIS-eligible investment through Seedrs, please ensure that the postal address in your Seedrs profile is kept up-to-date, as we will be posting the relevant documentation to you when it becomes available.

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Why dilution isn’t always a bad thing

One of the most misunderstood areas of early-stage investing is dilution. I receive lots of questions from investors about what dilution means for their investments and whether it is a bad thing.

Dilution is a natural part of the investment process and we see it as generally something to be embraced rather than feared. Sometimes predatory dilution can be used to take advantage of smaller shareholders, but the investor protections on Seedrs means that the dilution you see on a Seedrs investment is generally more likely to increase the value of your investment than to decrease it.

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Why diversification matters

A core principle underlying the whole Seedrs approach is that investing in startups can be highly profitable so long as you have a highly-diversified portfolio. We built Seedrs to allow both big and small investors to build a diversified portfolio of startups instead of being stuck in just one or two risky deals. Diversification is the key to success in angel investing.

Diversification makes intuitive sense in any asset class, but it’s vital in an asset class such as startups where most investments will fail but the ones that do succeed can do so in a big way. Diversification is also supported by the data: the “Siding with the Angels” report by Professor Robert Wiltbank (Nesta, 2009) shows just how skewed the distribution of returns inside a portfolio can be and why that makes diversification vital.

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Ensuring investors are protected and receive EIS or SEIS tax relief

Once you have invested in an EIS/SEIS eligible company on Seedrs, you may now be wondering how on earth you can take advantage of these incredible tax breaks. We’ve had a number of people ask how they claim the relevant tax relief, and how we ensure that an investment made into a company which is labelled as EIS/SEIS eligible will be eligible for relief when the investment closes.

We have written this post to help explain the EIS/SEIS process and our stringent procedures that we have in place to ensure that any investment made through Seedrs will be eligible for relief, if a listing is labelled as EIS/SEIS eligible.

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