One of the most important features of Seedrs is our nominee structure, whereby we hold and manage the shares of startups on behalf of the underlying investors after an investment is completed.
To ensure our investors receive the professional-grade protections they deserve and entrepreneurs don’t end up with messy and hard-to-manage cap tables, we act as the nominee shareholder on behalf of investors on Seedrs.
In short, this means that:
Investors do not need to worry about administering their investments. We ensure that their investments are protected using both the statutory provisions afforded to shareholders as well as the professional, contractual protections that are in place under our subscription and shareholder agreements with each company.
The funded companies do not have to worry about having to manage numerous individual investors. We take votes and issue consents on behalf of each Seedrs investor, which results in an efficient and streamlined process for all parties. This also means that a company that has raised investment through Seedrs will not face problems with a large cap table when raising later-stage funding from VCs or others. In the absence of our nominee approach, the difficulty in obtaining consents and signatures from each individual investor could make it nearly impossible to raise further finance; under the Seedrs structure, we take care of those consents and signatures the same way as a single institutional investor would.
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.