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.
If you're considering investing directly in your preferred businesses outside of the Seedrs nominee, you can do so through the direct investment option. You can learn more about this option here.
Fees charged for the provision of these nominee services vary based on how much profit is realised from the investment.
No fees are charged if you make no profit and carry is never charged on the initial investment amount. That is, if you hold your investment for however long, 3 days or 3 years (any length of time), and sell it on without making any profit, you will pay £0.00 in Nominee service fees.
If you make 100% profit, in other words you double your initial investment from for example £1,000 to £2,000, then we will charge £75 or 7.5% on the profit you make. If you invest £10 and make £10, the same percentage increase, we will charge you 75p or 7.5% on the profit.
You may pay fees depending on how you exit - say via the Secondary Market or via a Company Exit - but these will not relate to the Nominee. See more here.