Jeff and Carlos were confident in their mission of democratizing investment to make the much-needed emerging European start-up investment market more accessible as well as about their support building an ecosystem. Seedrs has grown over the years to become Europe’s leading platform in many ways. They were a pioneer in the market not only by becoming the first regulated marketplace, but in numerous other ways too. They implemented the nominee structure that enables efficient shareholder management, and they were the first to introduce secondary trading of crowdfunded shares in 2017. During these years, being the Vice President of EUROCROWD, Jeff also played a crucial role in Brussels in the establishment of the ECSP Regulation. In 2020, almost on the day when ECSPR was passed by the European Parliament, they announced their merger with their long-time competitor, Crowdcube, to join forces to conquer Europe. But after competition authorities blocked the deal, Jeff again turned the dime quickly and within less than 6 months, Seedrs announced to have sold the company to Republic, to one of the largest US platforms. Jeff remained as Chairman of the European business, and he is currently working to ensure Republic’s expansion into Europe by way of licensing it in Ireland.

Over its history, Seedrs attracted many outstanding ventures and investors. Revolut raised 3,8 million pounds in 2017. Andy Murray, the famous Olympian and three-time grand-slam winner tennis player has been their investor since 2015. Many venture capitalists joined either Seedrs or its crowd. Before the deal with Republic, Seedrs itself raised approximately 30 million pounds, and over 2,5 billion pounds has been invested on the Seedrs platform

Jeff mentored our Founder Nora several times, e.g. in a cab from the airport to the conference venue. Now he kindly agreed to answer our questions in relation to current crowdfunding market issues.

Since when have you been involved in the ECSP regulation?

‘Since 2012, basically since the JOBS Act was passed in the US, I had participated in panel discussions focusing on the harmonization of European regulation. For many years, I advocated the need for harmonization, but it didn’t seem like anyone was listening seriously. Finally in 2017, I was informed that the European policy makers had indeed agreed to regulate the European market and were ready to draft a regulation. With EUROCROWD, we were involved in several working groups to discuss the various versions of the legislation.’

What are your views on the unified limit of €5 million per campaign per year that a fundraising company can seek?

The Prospectus regulation sets the threshold for the obligation of preparing a prospectus for offerings above EUR 1M and maximizes it by 8 million. Member states can decide to require the preparation of the prospectus in between. Only a few member states allowed the 8 million level. The problem with the prospectus is that it is expensive and lengthy to prepare, which forms an obstacle for startups trying to raise capital. ECSPR delegates this function to authorized platforms that must review and select offerings to list. Initially there was no consensus on the €5 million limit but any limit lower would have been counterproductive as it would have put the European market at an unassailable competitive disadvantage. ‘Overall, I am indeed very much happy with the regulation. Of course, it is not perfect, for example, and I would have preferred a maximum of EUR 8 million in the ECSPR to be in line with the Prospectus Regulation, but I think €5 million is a workable number for now’ – he said.

Wefunder, a US-based competitor to Republic, has just stepped onto the European market. What do you think about the expansion of non-European platforms and the increasing acquisition activity?

‘So far, Wefunder has selected projects that Seedrs didn’t find compelling or large enough by volume for us. Of course, Seedrs worked with some very small opportunities when we were first starting out, so it is not clear whether these decisions reflect the long-term strategy or whether they will grow into doing larger transactions. I am sort of skeptical about a big acquisition boom, as a larger platform cannot grow significantly by buying a few tens of thousands of users in a completely different region. Determining the value of such a small-scale transaction raise questions in itself. The technology used by the two platforms is unlikely to be compatible, or at least difficult to transfer to the acquirer’s platform, so it does not represent a real value. In addition, the number of investors is no guarantee that a significant proportion of them will convert to the acquirer’s portal and invest with the same regularity and volume. So I see a number of challenges to M&A in this space, but I am sure there will be some very interesting combinations.

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