Receiving regular updates
Once an investment has been completed, you will have access to a dedicated page on the platform where you can communicate directly with the company and other investors. This investor relations area is where investees will provide regular updates: we generally require investee companies to provide a short update at least once every few months, and in many cases the company will do so more often. You can also ask questions or begin discussions here.
Getting involved with businesses
If you believe that you can help add value to any of the companies you have invested in, then please do reach out to them to suggest a meeting or to offer more active involvement. The businesses are often busy growing and may not need your particular skill set at this stage of their development, but most entrepreneurs appreciate offers of support from their investors and will take you up on it if they can. At the very least, many businesses appreciate you telling colleagues, friends and family about them to help build their profile.
For UK taxpayers who invest in EIS or SEIS eligible businesses, we’ll work with the investee company to ensure that you receive the certificates you need to help claim back any tax reliefs for which you might be eligible. It often takes a few months, and sometimes over a year, before these certificates become available from HMRC. As these certificates are the one set of documentation we need to send by post, rather than electronically, please make sure we have your most current address on file by keeping your Seedrs profile up-to-date.
When a business in which you have invested seeks to raise more money, you will often have pre-emption rights that allow you to invest a pro rata amount in that round based on your current shareholding. Sometimes the company will even be happy for you to invest more than your pro rata allocation. When there is an opportunity to invest in a company’s follow-on round, we will let you know and explain the mechanics. Generally, you will be able to make your investment via Seedrs – even if the rest of the round is being raised elsewhere – but occasionally a bespoke process is required.
Please note that, in some cases, we may need to waive your pre-emption rights, and you will not be able to invest in a follow-on round. This generally happens where the round is significant in size and, due to reasons of confidentiality or other sensitivities among institutional investors, maintaining pre-emption rights would jeopardise the round and the potential success of the company. If we do waive your right to pre-emption, it will only happen when we are satisfied that it is in the best interest of company growth.
You may be interested in reading our blog post on follow-on investing and dilution.
When returns are generated through dividends or sale of your shares, we will credit the funds, less our fee (and for publicly listed shares, any broker fee), directly into your Investment Account and will let you know. This is unlikely to be for some time after your initial investment, maybe even years.
We charge a single, straightforward fee of 7.5% on any profit that you make on an investment held by us as nominee. This is all you will ever pay us, there are no hidden costs and charges, and you only pay our fee if you make a profit. Please note that if your shares are publicly listed you will also need to pay any broker fee (our current broker’s fees can be found here).
What if a business fails?
Failure is very common, especially among startup and early-stage businesses, and you should expect many of the businesses in which you invest to return less than you invested or nothing at all. In some cases the failed business will either be wound up or sold for a nominal price, while in other cases the business won’t formally shut down but we’ll write off the investment and dispose of the shares. We work closely with the business as the nominee to ensure that any proceeds from these processes will be distributed to you, just as if the shares of a successful business had been sold.
Selling shares in a secondary market
At this time, there is no active secondary market for shares in private companies. But if you would like to sell any of your shares and you find an interested buyer, you are welcome to sell to them. You simply need to agree the terms of the sale, notify us, and we will coordinate with you to transfer the beneficial ownership interest to the buyer.