Tag Archives: Convertibles

Convertible equity term sheet

As a follow up to the two-page plain English Seedrs Term Sheet we launched earlier this year, we now have a version of the document for convertible equity campaigns. We believe that raising capital should be transparent and simple – including nuanced fundraising structures like convertible equity.

Convertible Term Sheet

The new plain English convertible equity crowdfunding term sheet from Seedrs contains a summary of the key legal terms.

Seedrs convertible investments use exactly the same nominee structure, and go through exactly the same due diligence process, as Seedrs equity investments. For more information on the structure and due diligence process, please see our Term Sheet for equity investments.

Because Seedrs convertibles are a different type of investment to standard Seedrs equity, the investment process and documentation are a bit different. Our convertible equity term sheet summarises the differences between convertible and “normal” equity investments and sets out the key terms of the documentation.

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Seedrs opens Convertibles to the crowds

Seedrs achieved another first today by launching the first ever convertible investment round on a crowdfunding platform. Future Ad Labs, one of the earliest campaigns to raise money on Seedrs nearly two years ago, has returned and will be the UK’s first startup to use the new form of funding.

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The convertible will allow investors to invest in Future Ad Labs today, with their investment converting into shares in the future at a discount on the future valuation. This means that Seedrs investors will receive more shares for their money than future investors.

Convertibles are very popular among startups and investors in Silicon Valley. They offer a way to raise and invest money now, while deferring the need to place a value on the company until some time in the future. This can be particularly useful when a startup is looking to raise large venture capital funding in the near future, but doesn’t want a valuation placed on their company now which may affect those negotiations.

Following the launch of convertibles, investors can now use Seedrs to invest in the equity of high-growth businesses in three different ways. In addition to straight equity campaigns, Seedrs pioneered the use of fund campaigns last autumn, and convertibles represent our third offering.

All three types of campaigns are about investing in real shares: we believe that when you invest in a business at its early, risky stages, you should get to participate in its upside—which is something that debt and rewards don’t allow.

Each type of campaign in Seedrs gives investors a different way to get equity exposure, from investing directly into a single business (straight equity), to investing in a pool of businesses (funds), to joining a future fundraising round at a discount (convertibles).
For more information on how our three types of campaigns work, and how they differ from each other, please see our new guide the types of campaign.

Future Ad Labs has been a major startup success story. The company has developed a portfolio of game-changing advertising solutions that replace frustrating experiences on the web with interactive advertising formats.

One of Future Ad Labs’s predecessor companies, Digital Spin, began life by raising £60,000 from 70 investors via Seedrs in July 2012.  After merging with Future Ad Labs, the business went on to receive a further $1 million investment from venture capital firms as well as other industry angel investors in 2013. Passion Capital led the investment round and other investors include Balderton Capital and Ballpark Ventures.

For more information about Future Ad Labs, please see their campaign.