Seedrs crowd camp


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Seedrs crowd camp

  1. 1. Harnessing the Capital of the Crowds How Small Investment Can Lead to Big Business Jeff Lynn CEO and Co-Founder, Seedrs 4 October 2012
  2. 2. The Problem with Crowdfunding• It covers lots of different economic activities: Politics Consumerism Emotion Profit
  3. 3. The Investment Side• It’s a subset of crowdfunding, but that doesn’t mean much• More importantly, it’s part of two critical evolutions • Evolution of finance – from the rich to the masses • Evolution of the Internet – from e-commerce to electronic finance
  4. 4. Startup Investing and the Masses• In the absence of online platforms, investing in startups is limited to the rich (top 1%)• The top 20% have investable capital • The majority of investable capital held by individuals is held by people in the 2%-20% (mass affluent) • The mass affluent aren’t mega-rich, but they tend to be sensible, grown-up adults who can, and would like to, invest their money as they choose
  5. 5. Startup Investing and the Masses• We see startups as an appealing asset class for the mass affluent • Strong returns • 22% IRR • Average 2.2x over 3.6 years • Risky but not complex – two very different things • Particularly appealing in light of the alternatives
  6. 6. Startup Investing and the Masses• Platforms like Seedrs give the mass affluent a chance to invest in startups• This in turn opens a new pool of capital to entrepreneurs
  7. 7. Startup Investing and the Internet• In the absence of on-line platforms, it is hard for anyone to build a portfolio of startup investments • It takes lots of time (>20 hour per deal) • It takes lots of money (>£10,000 per deal)
  8. 8. Startup Investing and the Internet• For startup investing to be sustainably profitable, you need to have a very wide portfolio • Data shows the returns are strong, but they’re skewed • 81% of returns came from 9% of startups • 56% of investments failed • A well-constructed portfolio includes 50 investments or more
  9. 9. Startup Investing and the Internet• Platforms like Seedrs give investors a way to build a portfolio of startups instead of• This in turn allows a wider range of startups to get funded
  10. 10. Conclusions• Crowdfunding is great – but it’s a broad term that doesn’t mean very much• Investing in startups online, though, is an important development • New investors • New way to build a portfolio
  11. 11. Questions? @seedrs @jeffseedrsSeedrs Limited support@seedrs.com2 Chapel Place t +44 (0)20 8638 0650Rivington StreetLondon EC2A 3DQUnited Kingdom www.seedrs.comSeedrs Limited is authorised and regulated by the Financial Services Authority.