The competition, launched at London's Digital Shoreditch festival, will bring in businesses from around the world. But the capital is at the heart of the contest as the winner will be set up in a London office and given mentoring to build their £100m business.
The winner will be chosen by a panel including the investors who sign up through Seedrs.
How can you win
"The winning business will have a range of abilities, but will have to show they are able of taking £1m and turning it into £100m." Jeff Lynn, CEO and Founder of Seedrs told Smarta, "We want to know there is a realistic prospect of the winner becoming one of London's top companies."
The Million Pound Start-Up competition has a lot of high profile backers, including the Mayor of London.
"London is a terrific home for technology start-ups and a world leader in this booming sector." Boris Johnson said, "This competition is an aptly innovative approach which I hope will unleash even more of the entrepreneurial talent for which this city is renowned."
The £1m investment will come from a large group of investors, meaning the winner will have a huge range of contacts and mentors to take advantage of. The investment will be given for equity of between 10 and 40%, depending on the current valuation of the business.
Businesses must have a turnover of less than £1m and must have been trading for less than 10 years. The competition is open to entries until August 29 with the final in December 2013. Click here to enter.