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November 28, 2013

Seedrs begins to sprout

Its meta-funding shows the noise around crowdfunding has refused to abate.

By Cbr Rolling Blog

Seedrs followed in the footsteps of rival Crowdcube this week by raising investment via its own platform.

The equity crowdfunding site raised £750,000 in one morning, from just 220 investors, with one backer fronting a staggering £100,000.

The firm parted with 12.66% equity to get the cash, and said the money will be used as working capital as it grows to become profitable.

The firm also used the opportunity to announce plans to open up to entrepreneurs and investors across the European Union, meaning citizens of any of EU country can invest or use the site to crowdfund.

It’s interesting because it shows there is still great appetite for the financing model despite new regulations proposed by the Financial Conduct Authority (FCA) which are expected to kick in early next year.

The regulations are aimed at minimising risk and exposure to inexperienced investors, but received some backlash which suggested it would make crowdfunding the folly of the rich.

Seedrs co-founder Carlos Silva spoke to CBR back in August, when he told us about plans to expand Europe-wide, with offices across the EU to open in the first few months of 2014.

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It’s clear that despite the cautionary note sounded by the FCA, the hubbub around crowdfunding has failed to subside.

Perhaps more traditional methods of funding (we’re looking at you, banks) need to be encouraged to loosen their purse strings if the FCA hopes to temper people’s excitement about new, more adventurous and risky mediums.

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