Seedrs Blog

Seedrs acquires Junction Investments and will expand to the United States

Seedrs acquires Junction Investments and will expand to the United States

29th October 2014 by Jeff Lynn

I am very pleased to announce that Seedrs has acquired California-based Junction Investments.

We plan to use this acquisition to expand to the United States in early 2015. Junction’s co-founders, Adam Kaufman and Brian Goldsmith, are now Co-Heads of Seedrs America, and they will be leading this expansion.

The Seedrs and Junction teams are very excited about the opportunities that our combination creates, and I wanted to share some background to the transaction and an overview of next steps.

A Global Platform

A founding principle of Seedrs is that investment in startups and growth businesses should be global. We believe in a future where entrepreneurs and investors from all over the world can connect online. Investors should be able to discover and invest in opportunities anywhere, and entrepreneurs should be able to access capital worldwide.

Financial regulation remains largely national or regional, however, and compliance with applicable law has always been a non-negotiable element of Seedrs’s approach to business. Building a global platform is thus a multi-stage process that involves identifying the right approaches and partners in different jurisdictions.

Having opened across Europe at the end of 2013, we began to look at the U.S. market at the beginning of this year. The U.S. has been slower to embrace equity crowdfunding than the UK and Europe have, and full-scale crowdfunding is not yet possible there. But with the opening of online investment to accredited investors at the end of last year (under Title II of the JOBS Act), and the prospect of wider crowdfunding on the horizon (under the yet-to-be-implemented Title III of the JOBS Act, or an amended version thereof), we feel that now is the right time to begin building our U.S. presence.

Junction

Adam Kaufman and Brian Goldsmith are two exceptionally impressive individuals. Adam is a graduate of Columbia University and Yale Law School and has worked as a corporate lawyer with Wachtell, Lipton, Rosen and Katz (one of New York’s pre-eminent law firms) and as an investment banker with Goldman Sachs. Brian, a graduate of Harvard University and Stanford Law School, served as a producer for the CBS Evening News, one of the leading television news programmes in the United States.

Adam and Brian came together to found Junction in 2012. Their vision and ethos were similar to ours: they wanted to provide a simple and straightforward way for a wide range of investors to access growth assets. They decided to focus initially on investments in entertainment assets, including Hollywood films, before expanding more widely.

Over the past two years, the Junction team has done a remarkable job of building the foundation of a great business. Among other things, they have built out an exceptional set of relationships in the investment and business communities, and they have gone through the arduous process of establishing a registered broker-dealer and an investment adviser (the two regulated entities that cover the equivalent of our FCA permissions).

At the same time, Adam and Brian believed that combining with a platform that already had significant reach and resources would allow Junction to move further and faster than it could have done on its own.

The Transaction

The management teams of Seedrs and Junction have been in contact for nearly a year, and it has been obvious from the outset that we would be a great cultural fit. We share a passion for connecting investors with opportunities to invest for growth, as well as a commitment to professionalism, investor protection, and compliance.

We began talks around a potential acquisition over the summer, and both sides quickly realised the tremendous potential a deal would have. We believe Adam and Brian represent the ideal partners to launch our U.S. operation. Meanwhile, the Junction team saw that joining forces with Europe’s leading equity crowdfunding platform could provide a powerful opportunity for rapid growth, both in the United States and internationally.

After several months of discussions, we signed documentation last month, and the acquisition closed on October 27, 2014.

Next Steps

Over the next few months, we will be working hard to launch Seedrs in the U.S. market, and we will announce when we are ready to go. In the meantime, American residents are welcome to sign up to Seedrs and have a look around, although they will not yet be able to invest or raise capital.

We believe that, as a combined company, we can do great things together, and we can’t wait to get started.

Jeff Lynn

Jeff Lynn

I'm Executive Chairman and Co-Founder of Seedrs.

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