Seeders began in 2012 after being developed as part of an MBA project and has since raised more than £4.5m in equity-based funding for crowdfunding and peer-to-peer lending platforms including Trillion Fund, Landbay, CrowdLords, CrowdCanDo and PledgeSports. It differs from crowdcube in a several very important ways. Firstly it only allows of “A” type shares, that is shares that allow voting rights. Crowdcube allows “A” type shares but they are a great deal more expensive than the low threshold involvement (£10) “B” type shares (which do not have voting rights). Secondly Seeders act as a nominee, acting as the legal shareholder on behalf of the investor. This makes life a lot simpler for the company asking for investment and allows for Seeders to represent the investor on a day to day basis, representing and protecting the investor with oversight. Crowdcube also offers this service with some of the companies they interact with, but not all, via another company, Crowdcube Nominees Limited. The investor can still interact with the company invested in through the Seeders website for the duration of the investment. Thirdly, Seeders has developed (specifically in beta testing phase at the moment of writing) a secondary marketplace where owners of shares can sell them to another party looking to get involved in a company at an early stage. The owner of the shares gets the option of liquidity while those who missed out on the first round of fundraising get a second chance.
The website is intuitive and uncluttered, much the same as Crowdcube, except it does have more information upfront, not least the nation of origin (both of the offers and the investors). The individual offer pages are also nicely set out, utilising a tabs structure to separate categories of information. They have a “Guides” section for those wishing to learn about the industry and Seeders in particular which is well thought out and useful, and the Blog has actually very interesting and useful information in it as well and is helpfully separated into subject areas for those who are only interested in one area.
Another interesting part of the website is the “Case Studies” pages. Of course the failures, of which there must have been plenty, are not trumpeted. But the failures do not illustrate much. One success story is Landbay, itself a crowd lending company, matching willing property lenders with property borrowers. “The thing that particularly appealed to us about the Seedrs model was the nominee structure,” Said John Goodall, CEO and founder. “All the shareholders’ rights are protected in one entity. For us as a business, if we need to discuss something we can discuss it directly with Seedrs. From an entrepreneur’s perspective that’s a lot easier.” He believes it made it easier to get institutional investors interested, and, as a bonus, some of the Seeders investors became investors on the Landbay platform. Healthy eating (salad) fast food place Tossed, a common sight in the City of London, raised over £1.2M in 41 days for 5.5% equity from 661 investors. They drew people in with discounts for investors at their store, something attractive enough to provoke overfunding by 169%. Oppo, health ice cream company also overfunded by 300% in a few days for 23% equity and are now selling in Holland & Barrett, Waitrose and Budgens. The team at Seeders give the punters the best chance with their oversight and investee services. Still, most will fail. The idea is to diversify enough so that money lost to the failures is more than made up for with the successes. It’s one of the main parts of the fun. That’s why you should never “bet” more than you can afford to lose. Being in over your head is simply no fun. Seedrs raises £3.5M on average per month and is making moves to begin activities in the US, legislation and regulation permitting. I can understand why. It’s like gambling or playing the stock market. Except useful.
