My startup was the first to be funded by Crowdcube's main rival in the UK - Seedrs https://www.seedrs.com/
I don't know if Crowdcube's model has changed, but back then (late-2012) the main difference was that Seedrs was regulated by the Financial Services Authority (not entirely sure how CrowdCube got away without that); Seedrs allows investments as small as £10; most importantly Seedrs uses a nominee structure so I have one line on my cap table.
Through CrowdCube the investors had to make bigger investments, each seemed to have a line on the cap table, and voting was individual. Seedrs does any voting on behalf of its investors. I suspect CrowdCube will have moved towards some kind of nominee structure by now, as investors were very wary of having too many investors on the cap table via equity crowd-funding. Seedrs solved that from the start.
We did a £600k round just over a year later. Things are going well for us so crowd-funding certainly is a good thing in my book.
The most important thing for me is that it democratises starting a startup. Any time you read "how to raise money for a startup" they start you off with Friends & Family money. Well, there was no way I was going to be able to raise £30k from friends and family and the sort of people that say you can, are probably from a different background to me. The result is that startups can seem like a rick-kids playground only (particularly in the UK).
Seeing as daddy could not give me £10M to start a company, Seedrs was amazing and I am eternally grateful to them for existing. I just wish they could have come along two years earlier so I could have started Satago when I wanted to!
How was the process with Seedrs? Was it easy to get funded? Did you advertise like you would a Kickstarter campaign? It says that they do due diligence -- did they discuss your valuation etc. with you? And how is the relationship now, with all the crowdfunders voting through them -- does it take up a lot of your time? Does it impose constraints or weird situations that you didn't foresee?
process was very painless. For me it was quite a minimal pitch - powerpoint, a video and a wireframe really. Just some legals to sort out, but mostly very easy. No legal costs for me.
It was easy for me to get funded, but then it was "only" £30k, and this was the first real crowd-equity platform so I was aware I was taking advantage of a rising tide anyway.
I didn't really treat it like a Kickstarter campaign, but I think you would now. I just posted on Facebook a few times. A few friends and family invested but mostly it was stranger. I spent 2 weeks getting a kick as I clicked refresh every 5min to see more money go in!
Due diligence = confirming there is some evidence to the market data you reference, plus general KYC. Valuation is pretty much up to yourself. They might guide you, not sure. I set quite a low valuation.
Relationship is fine. To be clear the crowd-funders don't get to vote - Seedrs do that on their behalf, which makes things much easier. Doesn't take up any of my time other than a quarterly update. I do wish some of them would engage a bit more. Maybe when it was £10 investment they are not that bothered, but on paper their investment is worth at least 10x more now.
Yeah there were some weird constraints when it came to our seed round wrt to protecting the investors. Mostly being very careful to make sure they could not get diluted out. We overcame the issues though.
I'm quite interested in the concept, but at the moment I'm put off by 1) the fact I'm no longer resident in the UK (I live in the Netherlands), and 2) I have no idea what the tax implications are.
I'll definitely check out seedrs.com. I wonder if anything like this exists in the Netherlands. Anybody know?
> Crowdcube does not advertise investment opportunities to people in the United States, Canada or Japan or any other country where it would be unlawful for our pitches to be advertised and investors must not register or view pitches if they are resident in these countries.
Aren't companies allowed to publicly disclose their fundraising in the US now? What other legal roadblocks exist that prevent Crowdcube from allowing US investors from viewing pitches?
I saw this on a big advert on the London underground a few weeks ago. Would love to hear what HN thinks of it, particularly that anyone can invest, in comparison with AngelList where only accredited investors can.
I don't know if Crowdcube's model has changed, but back then (late-2012) the main difference was that Seedrs was regulated by the Financial Services Authority (not entirely sure how CrowdCube got away without that); Seedrs allows investments as small as £10; most importantly Seedrs uses a nominee structure so I have one line on my cap table.
Through CrowdCube the investors had to make bigger investments, each seemed to have a line on the cap table, and voting was individual. Seedrs does any voting on behalf of its investors. I suspect CrowdCube will have moved towards some kind of nominee structure by now, as investors were very wary of having too many investors on the cap table via equity crowd-funding. Seedrs solved that from the start.
I had 60 investors invest a total of £30k in Satago http://satago.co.uk/
We did a £600k round just over a year later. Things are going well for us so crowd-funding certainly is a good thing in my book.
The most important thing for me is that it democratises starting a startup. Any time you read "how to raise money for a startup" they start you off with Friends & Family money. Well, there was no way I was going to be able to raise £30k from friends and family and the sort of people that say you can, are probably from a different background to me. The result is that startups can seem like a rick-kids playground only (particularly in the UK).
Seeing as daddy could not give me £10M to start a company, Seedrs was amazing and I am eternally grateful to them for existing. I just wish they could have come along two years earlier so I could have started Satago when I wanted to!