1 minute in Silicon Fen: Syndicate Room
A series that focusses on Cambridge Startups.
The Syndicate Room provides a new model for individuals to invest in companies. Let me explain.
As an individual, there are two ways which you can invest directly in equity in an early stage company.
- Crowdfunding: Startups raise money by having lots of people put a small amount of money. Look at opportunities like this here.
- Angel investing: Startups raise money by having a few high net worth individuals give quite a lot of money (think Dragons Den).
Each has limitations.
Crowdfunding has either limited or no due dilligence involved. You don’t know the quality of the company, or how reasonable the price is that you are buying shares in the company for.
Angel investors normally can only find out about deals via their personal network so have low visibility for new investments. They also are required to put in a large amount of funding (or receive less favourable terms).
Syndicate room is a kind of hybrid model. It has the advantages of the angel model as there is an angel that does the due dilligence assuring some level of quality in the company as well as pricing (as you invest with the same terms as the lead investor), as well as the advantages of the crowdfunding model — a much larger section of the population can put in a smaller amount of money to raise money for the company.
Its a pretty unique model, and has so far raised around 70 million pounds for various companies.
Funding
Around 8 million dollars in three rounds of investment.
Cambridge Connection
Headquartered here in Cambridge, with backing from a Cambridge angel network.
