EQUITY CROWDFUNDING DONE PROPERLY

Having started life as an entrepreneurship project at Oxford Saïd, Seedrs is now helping a range of investors and entrepreneurs get access to the capital markets.

Carlos Silva and Jeff Lynn

Seedrs is an online platform for investing in early-stage and growth businesses. It allows all types of investors to invest in businesses in exchange for shares. Seedrs then acts as a single nominee for all the investors to protect their interests, as well as facilitating and support for the entrepreneurs. As they describe it, ‘We are equity crowdfunding done properly’.

Seedrs started life as an Entrepreneurial Project – an important part of the MBA curriculum at Oxford Saïd. Students work in groups to develop an idea and produce a business plan for a new enterprise.

Co-founder Carlos Silva came up with the idea for Seedrs. He knew that one of the major challenges facing the concept would be legal, so wanted to ensure that one of the two ex-lawyers in the class was part of his team. The other co-founder Jeff Lynn says, ‘I always joke that I was simply lucky that he came to me first. I thought it was an interesting project and that I had the potential to add value through my legal experience, so I agreed to work with him’.

Jeff continues: ‘The further we got into it, the more possible it seemed. I remember going to lunch at Pizza Express while we were writing the business plan and turning to each other and saying “this could actually work.”’

Ironically, they did not get a particularly good grade for the project, but in 2009 they set about turning it into a real business. They gave shares to all the other members of the project group, and Oxford Saïd’s Nir Vulkan, Jeff’s tutor at Worcester College, provided support and advice. In fact, Seedrs is now repaying his friendship by providing him with data for his academic research.

After three years of work they launched Seedrs in July 2012. Looking back, Jeff says they could probably have moved faster: ‘We were a bit too methodical and pedantic. True, it’s a regulated industry and we had to be careful, but we could have taken a few more risks early on.’ He also says they wasted time looking in the wrong places for finance: ‘We needed seed capital. We didn’t exist so we couldn’t use ourselves – so we decided to approach a lot of “tech” investors. However, they simply weren’t interested in what we were trying to do, I think because they didn’t really understand finance. However, when we shifted focus and started talking to Finance investors, it was clear they were able to make the leap and understand tech.’

Five years after launching, Seedrs has funded over 500 deals with more than £230 million invested into campaigns on the platform. It is the most active investor in private companies in the UK, and expanding its presence elsewhere in Europe. For Jeff, ‘It’s lovely seeing the results of what we have built. We get to see lots of clever entrepreneurs getting the support they need.’

Advice from Jeff and Carlos to would-be entrepreneurs

Some business schools are more favourable to entrepreneurs than others Although Oxford Saïd’s MBA is pretty intensive, it still gives you a lot of freedom and flexibility to pursue what you are interested in.

Having a co-founder is vital If one of us wobbled, and that happened from time to time in the early days, we could talk to the other for reassurance.

And so is choosing the right life-partner We were both in serious relationships with women who worked. There was an income, which helped. But more importantly they bought into what we were doing. You can be an entrepreneur when you’re single. You can be an entrepreneur with a supportive partner. But with an unsupportive partner you’re toast.

Grit and endurance are really important You don’t want to keep pursuing something that isn’t going to work, but there is a danger that pursing the ‘fail fast’ mentality can end up meaning ‘giving up’ too easily. Investors will reward you for determination. You can make a lot of mistakes and be forgiven if an investor thinks you’ll keep fighting.

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