Seedrs aims to crowdfund businesses from the ideas stage and make it possible for anybody to invest money ranging from £10 to £150,000 per-startup in exchange for equity.
The business is the product of three years hard work by Oxford University graduates Jeff Lynn and Carlos Silva. After raising £1m in investment for their own business this year, the founders are now aiming to help other entrepreneurs and start-ups who are finding it difficult to access early stage funding.
They feel start-ups are too small for venture capitalists, too early for angel investors and that start-up accelerators simply don't do enough for a business idea to be successful. Seedrs is their alternative.
Seedrs charge 7.5% on any amount raised through its platform and this is deducted before the funds are transferred to the start-up. It means that if the fundraising isn't successful it doesn't cost the start-up anything and effectively means that by posting the idea on Seedrs, the entrepreneur has nothing to lose, only money to gain.
For investors a further 7.5% charge is added on any returns they make on their initial investment. This could be through the proceeds of a sale, dividends or any other money the start-up may pay the investor.
Aside from playing matchmaker between entrepreneur and investor, Seedrs handles all administration and looks after the shares as a nominee.
To ensure that the site doesn't get flooded with illegal or unethical ideas, there is a short vetting process for entrepreneurs in the form of a disclosure review and some due diligence. Investors menawhile have to be approved by passing an Investment Authorisation Questionnaire, that ensures they know the risks of early stage investing.
With funding hard to come by in a current tough investment climate, here's hoping Seedrs can make a difference.
For more information and to find out more about Seedrs, click here.