On certain Seedrs campaigns, you now have the option to invest ‘directly’ in the company (rather than via the Seedrs Nominee). This option is only available to those investing over the threshold amount, which is determined by the fundraising company.
What does holding shares via the Seedrs Nominee mean and what advantages are there?
The majority of investments on Seedrs are via the Seedrs Nominee. This means that the Seedrs Nominee holds the legal title to the shares and you, the investor, hold the economic rights (ie the right to receive any returns distributed to shareholders). You can read more about the nominee construct here:
The Seedrs Nominee provides the following benefits to investors:
- Access to the Seedrs Secondary Market, which is only available to shareholders under the Seedrs Nominee;
- Professional grade investment documentation is prepared and entered into by the Seedrs Nominee on behalf of investors;
- A professional nominee to act on shareholder consent matters and resolutions in the interest of investors;
- Access to the company’s post-investment page on Seedrs, in order to interact with the company, receive shareholders updates or make requests;
- Ability to exercise pre-emption rights via the Seedrs platform in follow on funding rounds.
What does holding shares directly mean for me?
If you choose to hold your shares directly, you will be responsible for any contractual or administrative arrangements with the company you are investing in.
At the end of the campaign, Seedrs will go through our regular due diligence and documentation process for the completion of the funding round. Upon completion of this process, Seedrs will release all funds to the company: including any funds received from direct investors that we are holding. Seedrs will not otherwise be responsible for any documentation or arrangements between yourself and the company.
To the extent that you require anything further, this will need to be arranged directly with the company.
Direct shareholders will not benefit from the Nominee benefits set out above. By electing to receive your shares directly you confirm that:
- Any shares purchased will be held in your own name;
- You will be personally responsible for any administration of these shares;
- You will not have access to the Seedrs post-investment page in order to interact with the company, receive shareholder updates or make requests;
- Your shares will not be represented by the Seedrs Nominee or benefit from the information rights or protections contained within any shareholders agreement between Seedrs and the company (including pre-emption rights);
- You will not be able to exercise any pre-emption rights the company chooses to offer to you by way of the Seedrs platform;
- You will not have access to the Seedrs Secondary Market.
Investors who select this option should also be aware of any local/jurisdictional requirements or processes they may need to go through in order to have their shares issued (for example, it is common in many European jurisdictions that shareholders must be represented in front of a notary in order to become a shareholder).
We do believe that investing directly is the right option for certain investors: those who wish to actively manage and track their investments and do not need the benefit of Seedrs investment execution, expertise or administration.