Investors Seedrs complain about acquisition

Crowdfunding platform Seedrs recently announced an acquisition by Republic. Small investors on the platform are voicing complaints about the deal. According to them, the way Seedrs handles the sale is going against its own founding principles.

Deal valued at €90 million

A week ago, British equity crowdfunding platform Seedrs announced that it had been acquired by Republic, which is an American investment platform for startups. The deal was valued at nearly 90 million euros, but is still subject to regulatory and shareholder approval. The takeover is expected in early 2022.

‘Investors of small amounts should have the same rights as investors of large amounts.’

Investors can buy shares of companies listed on the platform. Seedrs was founded based on the idea that an investor of small amounts of money should have the same rights and protection as an investor of large amounts.

In doing so, Seedrs has made equity investing more accessible for a larger range of investors. This principle has made the platform quite successful. Halfway through 2021, the company announced that over 242 million euros had been invested through the platform in just six months.

Hypocrisy

However, the platform is now accused of hypocrisy by some of the investors active on it. The biggest  complaint is the fact that Seedrs’ crowd is not being given the option to receive shares in Republic, while larger shareholders are. According to The Times, these investors also have to wait three years to receive the full proceeds of the sale.

‘The Republic deal is the dead opposite to Seedrs’ own basic principle.’

“When I first joined Seedrs, its basic principle was that small shareholders should be treated the same as large shareholders, meaning that someone investing just 10 euros in a company should be treated the same as someone investing 10.000 euros. The Republic deal is the dead opposite to this”, said one investor on Seedrs’ own forum.

Jeff Lynn, CEO of Seedrs, has responded to the complaints saying that he understand where they are coming from. But he also added: “Much as I am the strongest advocate of treating small shareholders the same as large ones wherever possible, I have a legal duty to maximize value for shareholders.”