seedrs crowd camp
TRANSCRIPT
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Jeff LynnCEO and Co-Founder, Seedrs4 October 2012
Harnessing the Capital of the Crowds
How Small Investment Can Lead to Big Business
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The Problem with Crowdfunding • It covers lots of different economic
activities:
Politics
ProfitEmotion
Consumerism
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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
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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
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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
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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
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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)
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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
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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
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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
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Seedrs Limited2 Chapel PlaceRivington StreetLondon EC2A 3DQUnited Kingdom www.seedrs.com
[email protected] +44 (0)20 8638 0650
Questions?
Seedrs Limited is authorised and regulated by the Financial Services Authority.
@seedrs@jeffseedrs