You can now transfer your Direct shareholdings under the Seedrs Nominee
Seedrs provides a nominee service to investors who invest through the platform. Shareholders who have previously invested outside of the Nominee can now transfer those shares under the Nominee to receive all of the benefits where the business has set-up the facility with Seedrs.
The term Nominee is generic
A nominee is a generic name given to a legal entity that has had assets transferred into it and rights associated to allow it to act on behalf of many individual asset owners (or beneficial owners) and is used in many situations, refer: https://www.investopedia.com/terms/n/nominee.asp.
Seedrs set the standard for its use in Equity Crowdfunding
Nominee structures are commonplace in Equity Crowdfunding nowadays but Seedrs pioneered its application in crowdfunding establishing it as the market norm, with most competitors now replicating the structure. Since 2012, a nominee structure has been available to our platform investors for all businesses that crowdfund on Seedrs.
Nominees aren’t all equal, Seedrs protects you
Not all rights under a nominee are equal however and it is worth carefully checking what rights or protections any nominee secures on your behalf. Seedrs has always negotiated rights under its nominee structure that protect the beneficial owners in a range of scenarios, particularly in exit scenarios or refinancing rounds.
Equity investors need to ensure they (or their nominee) are receiving investment terms which provide adequate protection, ensure they will share in the benefits of a company exit and provide protection from being unfairly diluted.
These services come at no cost until you make a profit
Seedrs responds to and acts on behalf of all beneficial owners under the Seedrs Nominee enforcing and protecting the rights it has negotiated to protect the interests of its investors. Seedrs unique model means it only receives a return for provision of these services should the holders under the Seedrs Nominee make a profit. In other words, Seedrs has an incentive to act in the best interests of the Beneficial Owner at all times.
This structure allows you to sell on our market
Besides providing professional investor protection grade services and taking care of all the administration related to them, due to the unique nature of the Seedrs Nominee structure it means Seedrs can also offer a Secondary Market. This just means investors can sell their shares early without having to wait for an exit event. Direct shareholders (those not under a nominee) are often limited by their ability to sell by the company’s ‘rules’ (eg Articles of Association see: https://www.gov.uk/limited-company-formation/memorandum-and-articles-of-association)
However, under the Seedrs Nominee, investors are generally free to sell and transfer ownership of their shares to other investors and we provide a market to allow them to do so, online in a simple transaction without the business ever being involved.
You can transfer Direct shareholdings to use all the features of our nominee
Transferring Direct shareholdings under the Seedrs Nominee structure therefore allows you to:
- Receive all the investor protections due to a professional grade investor
- Allow you to list on the Secondary Market
- Use our portfolio tool to manage your holdings
- Access our community and investor relations hub