When investing, your capital is at risk.
Seedrs investors are consistently browsing the platform for new opportunities, and many have been doing so for a number of years. While investing in private companies on Seedrs is as easy as clicking the green ‘invest’ button, seasoned private equity investors often do a great deal of homework before pulling the trigger.
We recently sat down with Glenn Bloxham-Mundy, member since 2016 and shareholder in over 17 Seedrs-funded businesses, to discuss the many insights and learnings he’s collected along the way.
How did you first become interested in private equity investing and what drew you to Seedrs as an option to do so?
Around five years ago I joined a fast-growth tech company that had recently IPOd. I watched a number of my colleagues benefit financially through their stock options and it opened my eyes to the world of options and in turn, private equity investing.
A friend of mine had explored the idea in more detail than I had at the time. He explained that we had two options: we could leave the security of our current jobs and join a startup, hoping on finding the next hot IPO (this was an exciting prospect but pretty unlikely) or we could invest in a range of early stage companies on a crowdfunding platform and hope for a number of them to exit (much more likely).
So naturally, we went with the latter, and explored all the options available to us. We quickly realized that Seedrs was the best platform to achieve this. Seedrs really lived up to its motto of ‘equity crowdfunding done right’ when compared to other platforms that we felt were inherently lacking in key areas. Seedrs’ nominee structure, secondary market, carry-incentive and extensive follow-on communication channels for investors were a few of the obvious benefits that have proved invaluable over the years.
Approximately how many investments have you made on Seedrs and what was the first?
I’ve made around 30 investments in total. The first was in a company called Landbay, a specialist mortgage marketplace lender. This was around four years ago, and since then it has snowballed.
Why were you drawn to this opportunity?
Landbay was a true innovator in the buy-to-let mortgage space and was showing material progress against their strategy. Their leadership team was well-incentivized through options and many had joined Landbay after successful careers at other larger competitors. John, Landbay’s Founder, seemed very receptive to the idea of bringing on new shareholders through equity crowdfunding and it felt like a great opportunity with a large upside.
How has your previous professional experience prepared you to build a successful investment portfolio in this asset class?
A common saying among sales professionals like myself is that we have “knowledge a mile-wide and an inch deep” – meaning we have a foundational understanding of almost all industries, which allows us to explore deeper when inclined. Working with clients across a variety of industries and being able to quickly speak their language and build credibility has required me to develop my research-skills, which I think translates quite well to investing when undertaking due diligence.
What are some of the key factors or metrics you look for when investing in private businesses on Seedrs?
What is the company’s pre-money valuation? Are the leadership team incentivized through options? Are there any institutional investors backing the round and, if so, to what degree, and what is their success rate in the space? What is the company’s track record to date and what does the competitive landscape look like? What are the risks to the business? Why now?
I’ve found that these questions are all incredibly valuable to understand prior to investing.
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.
Luckily, the majority are trending well! In addition to Landbay which I mentioned previously, one of my favourites is Urban (previously Urban Massage), the app bringing wellness services like massage, osteo, hair, nails and more to users’ homes. I was actually a customer of theirs, so I was intrigued when I saw they were fundraising on Seedrs. Since my original investment, Urban has gone on to grow quickly and continues to build on its strong market performance. I’m excited for what the future holds for them.
As a seasoned Seedrs investor, you’ve witnessed a number of changes to the platform roll out over the years. Which have been the most valuable to you and why?
Without a doubt, the Secondary Market has been the most impactful. The fact that you can invest in a traditionally opaque and illiquid asset class with so much transparency and liquidity is truly a market-first.
What businesses currently live on the platform (or recently closed) do you find the most interesting and why?
Assetz Capital. This is a business operating in the highly competitive and fast-growth proptech/lending sector that’s managed to achieve profitability. They’re one of Europe’s fastest growing companies and are meeting tangible demand for UK SME lending.
There has recently been a trend towards investing in companies with a sustainability or philanthropic element to their business models. Is this something you think about when building your portfolio?
Not necessarily. I look for good businesses, with good leadership, who serve a purpose. If that purpose has a sustainability angle to it then that’s great, but it’s not one of my core criteria. Assetz Capital is an example of a business that I believe serves a real purpose and need.
Certain investors may be hesitant to invest in this asset class during difficult times such as the Covid-19 crisis. How has the current economic climate impacted your investment decisions right now, and going forward?
There’s no disputing that this is an incredibly difficult time for businesses and society as a whole. However, there will be a number of positives that come from this for the equity crowdfunding community. We may start to see lower valuations, providing investors with even better value for their money, and an increasing number of entrepreneurs and opportunities cropping up. Countless successful businesses were founded in the wake of the global financial crisis – including Seedrs! I wouldn’t be surprised if we see a surge in investors looking for a better yield in their investments – and they’ll be looking to Seedrs as an option to invest in companies with growth potential, and defensible business models engineered to withstand short-term unrest.
Personally, I haven’t slowed down. I intend to continue investing when I come across a good opportunity.
What piece(s) of advice would you give to investors who are new to this asset class?
Start with a very small amount of money that wouldn’t pain you to lose, so you can see your investment through a rational lens. Think of it as a tuition fee in the world of private equity.
There are brilliant tools out there for new investors looking to learn. Seedrs’ website has a wealth of resources on the topic and that’s where I started. I believe that the most important knowledge investing is self-taught through trial and error.
Browse as many investment opportunities you can, even if you’re not intending to invest, and request their pitch decks to start getting an idea of what you like and don’t like. Seedrs’ discussion forums connect you to like-minded investors and can show you the types of questions more experienced investors ask. So, from there, you can begin to engage thoughtfully on your own. It’s often a good idea to try and invest alongside successful VCs as well, which is possible via Seedrs, so that you can double down on the due diligence.
But most importantly, remember we’re all still learning. Whether you’re making your first or your thousandth investment, you’re always taking a risk. With time, we hope to become better at gauging risk versus return.
What keeps you busy when you’re not investing in startups?
All the obvious things: I love to travel, eat out, read novels and spend time with friends and family.
What’s the best life hack you can recommend for keeping sane during lockdown?
Turn off the 24/7 news, it’s okay to disconnect.