Syndicate Room raises £1.2m in 33 hours
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 (pictured above) 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.
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.
“Because we are not overfunding, we know that a number of people have missed out on this round, but we hope to be able to welcome them in future raises down the line.”
Jonathan Milner added: “I have been a board observer in the business for over a year. SyndicateRoom’s vision, values and team make it an incredibly exciting business and I look forward to investing alongside others in this funding round.“
“SyndicateRoom has demonstrated that when done properly, where the interests of investors are genuinely balanced with those of quality, serious businesses seeking investment, equity crowdfunding can be a huge force for good for both investors and industry.
“As an experienced angel investor, I know how crucial fairness and transparency are to successful investment, where both sides win, and SyndicateRoom unquestionably leads the way in this regard.”