Seedrs acts as nominee for the underlying investors, so your startup would only need to deal with us for administrative matters like consents and shareholder votes. From an administration perspective, this is far easier than having to send notices and solicit approvals from hundreds of scattered investors. You'll also be able to take full advantage of feedback, experience and enthusiasm the investors can offer. So it is the best of both worlds: the administrative work only needs to be done with us, while the substantive support can come from all of the investors.
But this is not just about making your life easy, it also helps ensure your startup can raise further funding down the line.
Private company finance can be complex, and often various consents, waivers and other unanimous shareholder actions are needed for the company to raise additional money. If getting a consent depends on tracking down hundreds of investors all over the country (or the world), then as a practical matter the consent will never be obtained, and it is highly likely that the financing won’t be able to go through. As countless angels and VCs have told us, if they saw a widely-scattered shareholding base with no nominee in place, they would be deeply reluctant, or even entirely unwilling, to make an investment in the company. The startup is dead in the water because its shareholding base makes it impossible to raise more capital.
Our nominee structure fixes this problem.
We give the consent, sign the waiver or take whatever other action is needed to ensure your company can progress with its financing. It’s easy for angels, VCs and other later-stage investors to work with, which means that they’re happy to invest in a company that has been financed through Seedrs. That’s good news for your company and it’s good news for your investors.
If you’re still not sure about what our nominee structure means for how we administer investments into businesses, you can take a look at this blog post.