Syndicate Room is an equity crowdfunding platform (as opposed to a P2P or peer to peer lender). As an equity crowdfunder, your investment gets you a share in the equity (ownership) of the business. This differs from P2P, which is debt funding for borrowers. Debt funders’ return on investment comes from what they lend, plus interest and is usually repaid in set instalments, while equity funders’ return comes through what their stake in the business is worth.
Key facts and figures
Minimum investment: £1000
Minimum term: N/A
Requirements to invest: Anyone over 18 who can prove they fit the criteria for a sophisticated investor OR a high net worth individual (income over £100 000 or assets held worth £250 000). Might be eligible for Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) tax benefits.
Cumulative volume invested: £37,755,471
Type of borrowers: Primarily start-ups and early stage businesses
Money invested in last 12 months: £27,689,704
Market share % over last 3 months according to Liberum AltFi Volume Index UK: 1.74%
(Figures are as of 28.9.15)
Returns: Rates and times vary depending on the success of the businesses you invest in. Expect to invest for 3-7 years before seeing significant returns.
Getting money on the platform
When you choose to invest in a business, you enter your payment details in Syndicate Room’s payment system, “GoCardless”. If the business meets its target, you will be notified about the date the money will be taken from your account. No money will be taken if the business does nto reach its fundraising target.
Do investors get a choice in who or what they invest in?
Yes, options range from start-ups to well established companies across a number of sectors. Details of businesses are provided and investors are encouraged to do their own due diligence.
Investing your money
Monitoring your account
Understanding the risks
Investing in equity makes you a shareholder. A shareholder has partial ownership of a company and stands to profit should the company do well. However, the opposite is also true, so if the company fails investors can lose some, or all, of their investment.