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SyndicateRoom is the newest example of a new style of early stage investment vehicles. In essence, SyndicateRoom uses partnerships in UK Business Angels networks to identify potential investments, which are then pitched to SyndicateRoom customers: other angels who aren't part of the network and who would obtain the same upside as investing Business Angels.
The value prop for the former angels is that they can get their investments funded more quickly; the upside for the latter is that they get easy access to the deal flow. Very interesting idea.
Most crowd-investing platforms are company-led. An entrepreneur sets up a business plan for a new venture and pitches the idea online to a crowd of potential investors with money to put to work. SyndicateRoom is investor-led. Before any business is pitched to the wider crowd, professional angel investors, including some of the biggest names in a once obscure market segment suddenly popularized in the UK by the BBC television programme Dragon’s Den, first vet the business concept and the valuation. Only once a recognized angel investor has approved a business plan and invested enough to meet a good proportion of its target funding requirement does a company then have the chance to progress on to the SyndicateRoom platform for crowd investors to subscribe.
