London-based Equity crowdfunding platform Seedrs announced this week that they will be opening up their platform to European companies and investors, making them the first pan-European equity crowdfunding platform. Launched in the summer of 2012, Seedrs has already facilitated 48 deals, and the 47th may be the £500,000 crowdfunding platform they launched on their own platform in order to facilitate growth, which values the startup at £5,175,000 pre-money .
Speaking with Seedrs co-founder Jeff Lynn, I got the impression that, while the barriers to entry to launching in Europe may not be that high, this American CEO may be among the few who see the single market that is Europe. Seedr has competitors at almost every interval – whether rewards-based crowdfunding platforms like France’s KissKissBankBank or the American IndieGogo & Kickstarter, German Equity platform SeedMatch, and even the Israeli OurCrowd – however, Seedrs is the first to reach out and commit to the European market.
“[Our Expansion] our ambition and path to rapid growth, as well as path to our view of the European ecosystem”
For European companies, they will be expected to put in place a UK Holding company on top of their existing local company. While this does not effect day-to-day operations, it’s doubtful that Seedrs will be picking up bakeries, coffee shops & cheesemakers outside of the UK anytime soon; nonetheless, Lynn is confident that the trade-off of having a ‘little extra admin’ is worth it in the long run for startups looking to get crowdfunding for equity.
“Our early adopters for this… are going to be the tech-focused, internationally looking businesses who get that this is something that VCs & accelerators would ask for as well”
London: the Delaware of Europe?
Comparing the situation with US Delaware corp’s, a common practice for local and foreign companies looking to set up in an easy, business-friendly jurisdiction, Lynn asserted that London’s role, while not limited to being an investor-friendly startup haven, may resemble that of Delaware’s in the US. In France, I doubt it will take much convincing to get French companies to set up a UK hodling company – although a number of French entrepreneurs may already be operating as UK companies, in order to be more appealing to foreign investors.