Syndicate Room raises £1.2m in 33 hours

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Business Weekly UK | Kate Sweeney | May 5, 2015
Syndicate room

Cambridge-based SyndicateRoom raised its £1.2 million growth funding on its own site in just 33 hours.

Despite limiting investment to £5k per individual backer, SyndicateRoom saw the cash rack up at the rate of almost £36.4k every hour.

Founder and CEO Goncalo de Vasconcelos said the round was more than twice oversubscribed even before the launch. Overfunding beyond the £1.2m was not allowed as SyndicateRoom’s model is proving so successful that the business does not need more at this stage.

The round was led by super-angel Jonathan Milner who negotiated the valuation, agreed all the terms of the deal and invested over £250,000 of his own money.

The money was based on a pre-cash valuation of £7.2m and recruited larger numbers of investors who become important  brand ambassadors for the business.  The success of SyndicateRoom since it opened just over 18 months ago – doubling in size every quarter – means that the business only needed £1.2 million in additional funding at this stage.

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De Vasconcelos said: “This raise was as much about taking the opportunity to increase numbers of ‘owner advocates’ – investors who love SyndicateRoom’s unique approach, want to share in its success and who champion it amongst their own networks of contacts.”

Although SyndicateRoom launched significantly later than the other two of the ‘Big Three’ equity crowdfunding platforms in the UK (Crowdcube and Seedrs), its investor-led model has produced remarkably fast growth.

To date it has helped over 30 companies raise more than £20 million, with the average round being more than £600,000 and the average amount from each investor being £15,000 per investment. Notably, there has yet to be a single failure amongst the businesses SyndicateRoom has funded.

De Vasconcelos added: “The enormous demand from our existing shareholders to invest more in SyndicateRoom is an obvious validation of our unique approach to equity crowdfunding and tells us we are very much on the right track – even if it is a very different one from the other two big players in the sector.

“With every investment round on SyndicateRoom being led by one or more experienced angel investors or VCs – negotiating the valuation, agreeing all the terms and investing significantly themselves, and then sharing these exact arrangements with all investors who join the round – our model offers greater fairness and transparency for investors than any other.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country.  NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  Learn more About Us or visit www.ncfacanada.org.

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