When investing, your capital is at risk.
Whether you first come to the Seedrs platform as an experienced investor, or an advocate for a brand you love, it quickly becomes clear that there are countless incredible businesses you can actively support as they disrupt their respective industries.
For those looking to build a portfolio, it will likely take a little research to pick the opportunities that are right for you. We work hard to provide our investors the information they need to assess investment opportunities. Recently, we’ve been asking our most active investors what goes on behind the scenes, to find out more about how they evaluate that information before backing a business.
In an effort to share insights for the benefit of our investors from all walks of life, we sat down with Andrew King, shareholder in over 100 businesses, to get his take on private equity investing.
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How did you first become interested in private equity investing and what drew you to Seedrs as an option to do so?
I’m in Sales and Marketing and am a Freelance Photographer. It was actually through my camera that I initially came across Seedrs: my son had met Jeff Lynn through Coadec (Coalition for a Digital Economy). Jeff needed photos of the team he was building, and so I got involved, shooting the growing team several times, plus a few events and some case studies.
Personal contact led to interest in investing, and for the last few years I’ve been actively using the platform to build a portfolio. My professional experience didn’t make for an obvious transition into private equity investment, but I have been learning as I go, and investing relatively small sums across a diversified range of opportunities.
What was one of the first investments you made on the platform?
MacRebur was the first business that caught my attention and which went through to share-issue. The company uses waste plastic to replace bitumen in asphalt, creating more durable, longer-lasting roads and reducing landfill waste in the process.The recycling element is positive for the environment, and for sustainable development of urban infrastructure.
I would say that the sustainability element is a key to many of my investments through Seedrs. I want to support businesses that are building a healthier, more sustainable future. I am also passionate about international development and justice. I’m drawn to projects that empower people in the developing world to create jobs, encourage accessibility, and drive equitable economic growth.
What are some of the key factors or metrics you look for when investing in private businesses on Seedrs?
You have to expect high risk in this asset class. I always resist the temptation to pour too much of my investment capital into startups. Since I have been using Seedrs, about 11% of my investment has been here – and that is spread across 100 businesses and evenly across all Seedrs sectors. My other investments are in asset classes with lower, more stable risk, ensuring I never overextend myself and strive for a balanced portfolio.
That 11% allocated to Seedrs is the part of my portfolio where I can exercise the most choice. By keeping the proportion in startups low, I am at liberty to handpick projects that really interest me, despite being higher risk.
To help diversify my environmentally-conscious portfolio, I have actually used the Sustainable Accelerator Fund over the last three years to diversify my investments in exactly this area. I really like the projects the fund managers have chosen, and their track-record is good.
All that said, a significant proportion of my investments through Seedrs is in disruptive fintech projects which show early indicators of long-term growth. Across the range of investment opportunities, I also lean towards EIS and SEIS-eligible projects, to make the most of available tax benefits.
What has been one of the highlights of your Seedrs portfolio? This can be an investment that has performed well, or a business with a mission you find of particular interest.
MacRebur, mentioned earlier, has performed pretty well, as has the Funky Iron Company. FairAfric is close to my heart as it seeks to keep chocolate production profits close to the raw material source in West Africa. The food sector tends to be slower yield, but despite this they’re very much still in the game and showing promising growth.
As a seasoned Seedrs investor, you’ve witnessed a number of changes to the platform over the years. Which have been the most valuable to you and why?
The obvious answer here would be the Secondary Market, which I personally use more as a way to browse interesting opportunities and the changing value of my own investments, rather than for actual trading. Above all, it’s been rewarding to watch the platform develop over the years. It’s astounding to think about how much it has grown in terms of usability, transparency and efficiency. The user experience keeps getting better. I’m also glad to see my photography in use!
What live campaigns are you keeping an eye on right now?
There are a few follow-on campaigns right now that are interesting, where I invested in earlier rounds, including Riversimple, Ripple and Brickowner. I occasionally exercise preemption and reinvest, but my primary goal is diversification.
I recently invested in AirSensa, the air pollution data platform, and am researching planarTECH. I’m also considering Lendahand – their mission to promote investment and put capital into the hands of entrepreneurs in the developing world aligns with my values.
What piece(s) of advice would you give to investors who are new to this asset class?
Diversify, diversify, diversify – and never invest more than you can afford to lose! Most important though, figure out what interests you. For me it’s sustainability and justice in development; for you it may be different. Put money where it matters most to you – you’ll be more motivated to follow the progress of your investments. If you do that, every successful portfolio business will feel like a personal success.
What are you doing when you’re not investing in startups?
I run sales and marketing for a family-owned kitchen surface company, and I have my own photography business, which keeps me busy.
What’s the best life hack you can recommend for keeping sane during lockdown?
I haven’t found lockdown easy, but have done a ton of personal photographic work. Pro photographers don’t often have well-crafted holiday albums! After many years, I’ve also picked up my guitar again, and am having a dabble at learning German – not that I will ever catch up with my linguistic wife!
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