FinTech Week 2014 - Seedrs Presentation

The Evolution of Seedrs and Equity Crowdfunding

www.seedrs.com @Seedrs

Leading study shows that historically angel investments have been a profitable asset class:

• 22% IRR

• Average 2.2x over 3.6 years

• Far better performance than almost any other asset class (including venture capital)

Startups as an Asset Class

Gilts UK _x000d_Pr

operty

UK _x000d_Sh

ares

UK_x000d_ Angel In-vesting

0%

5%

10%

15%

20%

25%Siding With The Angels


AND... that doesn’t include the effects of SEIS and EIS:

• Up to 64% of your investment back

• If the investment is profitable, you pay no CGT

• If the investment is not profitable, you can claim loss relief – meaning up to 86.5% tax relief for a 45% rate taxpayer

Tax Reliefs


BUT... you need to invest in a wide portfolio:

• Distribution of returns is highly skewed

• 9% of businesses made up 81% of returns

• Investments are high-risk, and most are unprofitable

Diversification

<1X 1X-5X 5X-10X 10X-30X 30X-50X0%

10%

20%

30%

40%

50%

60%


Investing in startups offline requires:• Time: negotiation of bespoke terms, paperwork and

coordination among multiple investors

• Money: transaction costs mean you can rarely invest less than £10,000 (and often £25,000) per deal

Traditional angel portfolio requires:• Devoting several days per week of your time

• Allocating at least £200,000 of your capital in total

Investing in Startups


If you are prepared to devote that level of time and money, traditional angel investing can be wonderful.

• You get the enjoyment of working one-on-one with the founders

• You can negotiate for the exact terms and protections that suit your needs best (e.g. specific consent rights)

• There is often scope to get deeply involved in the operations of one or more investee companies as non-executive director or advisor.

Building a Portfolio of Startups


We built Seedrs for everyone else.• We are an FCA-authorised firm that provides a

simple, online way to invest in the startups you choose

• You can invest as little or as much as you like, and you can make your investments with a few clicks of a button

• Terms are more standardised than in traditional angel investing, and you won’t take as active a role in the company

• You still get plenty of opportunities to interact with the entrepreneur before and after making your investment

Building a Portfolio of Startups


Info about business (which we review)

Amount of money sought (all-or-nothing)

Percentage of equity (take-it-or-leave-it)

EntrepreneurCreates Listing

11 12 13

How Seedrs Works for Startups


All payments and documentation are

online

Can participate in Q&A or reach out to

entrepreneur offline

Only invest in startups you choose

InvestorsReview and Invest

How Seedrs Works for Investors

1 2 3


Legal due-diligence and subscription

agreement

We charge a 7.5% success fee (sole

entrepreneur fee)

Investment made and held by us as

nominee/manager

SeedrsManages Transaction

How Seedrs Works for Transactions

1 2 3


Can develop deeper relationships with

individual investors

Only has to work with one legal shareholder

Entrepreneur Grows The Businesses

Accesses support of wide base of investors

via the platform

How Seedrs Works for Startup Growth

1 2 3


We vote and monitor the shares, but

investors can get as involved as they like

We pass on proceeds from sale or dividend

We charge 7.5% of any upside (sole

investor fee)

Investors get Information, Involvement and Returns

How Seedrs Works for Returns

1 2 3


81 deals funded(44 in last six

months)

Investors from 44 countries

£7M raised(£5M in last six

months)

Leading Europe-wide equity crowdfunding platform — and growing very fast.

Seedrs Today


Since 2012, we have paved the way for the industry.

• First platform to receive regulatory approval anywhere in the world (FSA, May 2012)

• First platform to facilitate crowdfunded funds

• First major pan-European platform

• First startups to raise follow on VC funding

• Fastest campaign (£100K in 2.5 hours)

• Largest campaign (£2.58M)

• Highest number of investors in a single campaign (909)

Milestones


• Nominee structure means only one shareholder on cap table.

• Close relationships with accelerator, angel and VC communities throughout Europe.

Seedrs is the only platform designed for

high-growth startups.

Seedrs is the only platform built around

investor protection.

• Subscription agreement with full contractual protections, along with voting shares.

• An active monitoring and oversight process.

Our focus is on providing investors with outsized returns.

Focus on Returns


FinTech: Automate your credit control and spend less time chasing debtors.

• Raised £30,000 from 61 investors on Seedrs in July 2012.

• Later won Seedcamp, and currently finalising a significant VC and angel fundraising round.

• Widely viewed as one of London’s up-and-coming FinTech stars.

Case Study - Satago


AdTech: Developers of PLAYCAPTCHA, the more engaging way to prove you’re human online.

• Raised £60,000 from 70 investors on Seedrs in July 2012.

• Later merged with main competitor, and received follow-on investment from Balderton and Passion Capital.

• Growing very quickly, generating significant revenuesand poised for huge success.

Case Study - Future Ad Labs


Accelerator: Bristol’s Internet accelerator, located in the Engine Shed development.

• Raised £150,000 for 10 startups from 134 investors on Seedrs in October 2013

• First-ever crowdfunded incubator cohort. Programme launched strongly, received praise from the Duke of York and others.

• Second cohort funded with a further £150,000 from 154 investors on Seedrs in March 2014.

Case Study - Webstart Bristol

Seedrs Limited is authorised and regulated by the Financial Conduct Authority

FinTech Week 2014 - Seedrs Presentation

Small Business & Entrepreneurship

Transcript of FinTech Week 2014 - Seedrs Presentation