Goncalo de Vasconcelos, CEO at SyndicateRoom
SyndicateRoom is an online equity crowdfunding platform that allows its members to co-invest in exciting startups with seasoned investors. Equity crowdfunding has democratised investment in startups, helping entrepreneurs to make their business visions a reality and allowing individuals to invest and become real-life ‘Dragons’.
SyndicateRoom empowers the crowd to make more intelligent investments. All of its startups are already backed by an experienced ‘angel’ investor who is investing their own money in the same opportunity. The crowd shares the risks and the potential rewards that follow.1. When and where did you come up with the idea of SyndicateRoom?The idea for SyndicateRoom was born from my previous experience with some of the Cambridge Angels and other hugely successful businessmen and women who were investing in up-and-coming startups. Working alongside them I could feel all the excitement of being involved in a fledgling startup with ambitious entrepreneurs and I was keen to join them, but couldn’t because they required a minimum investment of £25,000. I created SyndicateRoom to resolve this problem for myself and other would-be investors – and now you can invest from £1,000 into the very same deals as hugely successful business angels. As an entrepreneur myself I also know how difficult it is to get funding, so I’m happy to be able to help other new businesses achieve their funding targets.The ‘Eureka’ moment occurred nearly three years ago, but back then the concept of crowdfunding was hardly known and the investment industry as a whole was completely alien to the concept of having a sophisticated crowd invest alongside the professionals, which brought its own challenges.2. How much did you have to refine the proposition between the original concept and the commercial launch?The vision remained the same throughout but there was a lot of legwork to develop the legal set-up, to get the FCA authorisation and to forge the right partnerships. We were obsessed with ensuring that online investors get the same economic terms as the large, well informed investors. On a pound per pound invested, everybody makes or loses the same amount of money. This has always been key to our vision.3. What funding did you need to get to launch and from what sources did you obtain it?From business angels, obviously! We have been very fortunate to get the support and guidance of heavyweights in the angel investment community such as Peter Cowley and Jonathan Milner, both members of Cambridge Angels and both investors in SyndicateRoom. Throughout the journey we also had guidance and inspiration in varying degrees from other highly influential angels such as Sherry Coutu, David Cleevely, Hermann Hauser and Charles Cotton. Some of these individuals are truly inspirational and even just a 30 minute chat with them is worth more than many hours spent with any external consultant.4. How hard was it to get investors to engage with the proposition?Pretty hard. At the beginning of our journey online investment in startups was virtually unheard of, and there was a lot of scepticism from experienced Business Angels about allowing people to invest online. However, as the crowdfunding movement grew it became a lot easier to raise finance to launch SyndicateRoom, as experienced investors saw a gap in the market to serve a sophisticated crowd with real angel investment opportunities. Ironically some of our largest members investing in our deals are now experienced business angels investing online!5. What has been your greatest success to date?The greatest by volume has been Apta Biosciences, having raised a whopping £1.8m. However, Inform Direct was a very special one to us. We were at the very beginning and Henry Catchpole, a previously successful entrepreneur in his own right, approached us to raise £300,000 in total, which he did in just 48 hours. Two weeks later Inform Direct had raised £400,000.6. Have you had any failures in terms of investors engaging with propositions on the platform?We screen the companies very carefully and this has meant that 75 per cent of the companies we’ve listed have successfully raised finance through SyndicateRoom. However, 25 per cent of them haven’t and ultimately it is down to our members to choose which ones they back. They are a demanding bunch and that’s how we like them!7. How does SyndicateRoom differ from the traditional crowdfunding platforms?We offer the opportunity for our members to invest in real angel investments, side-by-side and under the same terms as some of the UK’s top business angels. As a result, we attract a more sophisticated crowd, and with a minimum investment of £1,000 our members think before they invest, which is exactly what we want them to do. This is completely unique, as traditional equity crowdfunding platforms allow people to invest from as little as £10 in all sorts of startups, with very limited due diligence. As a result we have grown at an amazing pace and helped companies closing over £6m in just eight months, which is truly astonishing, even to us!8. From how wide a geographical footprint have you drawn investment support for clients?The beauty of online investment is that it doesn’t matter where the investor or the entrepreneur are based. This creates one of the few flows of capital from the South East to the rest of the country, as a large percentage of the investors are based in the South East but their capital is being invested across the United Kingdom, including Cambridge, Norwich, Warwick and Manchester. This is a really exciting concept – money from wealthy areas supporting entrepreneurs based in less well-off areas of the country. Could this support a regeneration of engineering and manufacturing in the United Kingdom? We hope so! e-Go aeroplanes, for example - the first light aircraft designed and being built in the UK in many years - just raised funding through SyndicateRoom alongside investors such as Hermann Hauser and Marshall of Cambridge.9. What are your medium term plans to grow the business and how do you envisage that roadmap evolving?We are quickly becoming the rightmove.com of angel investment, as investors that used to invest via EIS/SEIS funds are now gaining control over their finances and appreciating the transparency and control that SyndicateRoom brings. They choose which businesses they want to support, from healthcare to tech companies.10. Are you likely to need more money of your own to underpin the growth blueprint?We have very ambitious plans for the future so despite being well funded, we may choose to raise a further funding round to enable even faster growth, but we won’t be doing so for quite a while yet.