The opportunity to be an early investor in the next Google or Facebook or Uber is something no investor would pass up. But getting access to red-hot startups in the early days has traditionally been restricted to institutions and venture capital firms. Now, a UK company called SyndicateRoom is opening up access to these companies, providing everyday investors with the opportunity to put their money into fast growing startups and become so-called tech investment “Dragons,” allowing them to invest alongside some of the biggest names in venture capital. “We’re an online investment platform offering investors access to highly-vetted startup investments,” said Marcin Zaba, SyndicateRoom’s head of marketing, who spoke to RewardExpert. “Investors can invest directly into individual companies or via our funds.”
Working in the Equity Crowdfunding Space
SyndicateRoom was founded in 2013. It focuses on helping new companies grow and helping investors make returns through equity crowdfunding. While traditional crowdfunding involves entrepreneurs receiving money for their startups, equity crowdfunding provides something in return to those providing the funds. When people put money into a company, they get equity in return for their investment. “We work broadly in the equity crowdfunding space, so we essentially host investment opportunities on our website that investors can review and invest in,” said Zaba.
According to the company website, “SyndicateRoom makes it easy to access the deal flow of investment professionals and invest alongside them.” Their investors together have invested into over 100+ companies across 30 sectors alongside 60 different lead investors.
Get the Same Terms as Professional Investors
SyndicateRoom is highly selective when it comes to the companies it features on its platform. Zaba said that the goal is to get companies that have a good chance at becoming really trailblazing operations. “The major consideration for us is that another professional investor is leading the round and that SyndicateRoom investors get the same economic terms as lead investors,” he said. “Lead investors need to be investing at least 40% of the whole funding round and be deeply incentivised to conduct thorough due diligence and negotiate a competitive valuation.”
Setting SyndicateRoom Apart
Zaba points out that the commitment to following the leads of venture capitalists, angel investors and others high-level funders is part of what sets SyndicateRoom apart from other investment platforms. “Other platforms don’t have the same requirements as us, which means that the choose startups on the basis of how easy they are to market to investors and not necessarily on the long-term investment prospects,” he explained. “These startups raise at valuations they set themselves and industry commentators often remark that they are over-priced.”
Playing the Long Game
Still Zaba admits that it is too early to say overall whether investors can get better returns through SyndicateRoom as startup investing remains a proposition full of risk. “Startup investing is definitely that the upper end of the risk spectrum. Startups take a long time to grow enough to return money to investors and there is no real way that you can sell your shares in them along the way,” stated Zaba, who pointed out that investors need to be prepared to lose money and hold their shares for a long period of time.
A Diverse Array of Businesses
So far, SyndicateRoom has approximately 140 businesses in its portfolio and has helped raise £140 million for those companies. They run the gamut of industries, including biotech, artificial intelligence, internet retailers, green technology, entertainment and even light-aircraft designers.
“Our portfolio is incredibly broad and cross sector, which of course helps investors diversify,” stated Zaba. Right now the company operates primarily in the UK but does accept some business from EU nations and beyond. To find out if SyndicateRoom has the right investments for your portfolio, check out www.syndicateroom.com.