A global investor matchmaking site is bringing top investor syndicates to the UK, allowing individuals to co-invest with those who have backed start-ups, such as Hailo, Transferwise and Zoopla.
This means that start-ups in the UK will now be able to raise money online from networks of early stage investors they would otherwise not have had access to. Formerly, an angel or small seed fund would only bring limited amounts of capital to a round but syndicates allow these investors to collate larger numbers of investors and speed up and simplify the closing process.
The matchmaking site, AngelList, is very popular in the US and has raised more than $100m (£65m) there over the last year and now it is bringing its service to the UK. As a spokesman for the company said, not only will the UK start-up community benefit but the presence of syndicates will also smooth out the fundraising process for all parties.
He added that start-ups want to have an easier fundraising process, while investors are interested in participating in investments made by lead investors. Meanwhile, the leads like being able to invest larger sums, so everyone wins. The firm therefore expects US investors to actively participate in UK syndicated investments
Meanwhile, in separate news, Prime Minister David Cameron announced at the British Chambers of Commerce (BCC) annual conference last week that the StartUp Loans scheme, which provides seed finance to new firms, will be extended to 75,000 from the 25,000 it currently helps.
Commenting on this, a spokesman for the Federation of Small Businesses (FSB) said that additional finance for small firms is essential and the extension of this scheme will support growth through the entrepreneurial ecosystem.