Seedrs EIS 100 Fund


#1

A unique opportunity aiming to build a portfolio of investments in 100 EIS companies in 12 months or less.

Unsure how they’ll find 100 credible investment opportunities but may be a good way to diversify, guess we’ll know more when it launches.


#2

Diversity is a key attribute but 100 names does seem a lot for what should be a pretty uncorrelated group of investments (lots of holdings in different companies that do not relate to each other spreads risk well. 100 companies in the same industry in the same country does not). Syndicate Room have been offering this for a year or so with their Twenty8 fund. Anybody want to guess how many names they target? Perhaps a more realistic ambition to find 28 good names in 1 year. Its still a lot. May be some sector concentrations given they do quite a lot of life sciences? It is early days but I think the pooled funds are a good idea for people without the time or inclination to select investments directly (I think that’s half the fun). Super long term though.


#3

I guess 20-30 is enough to add diversity. Suppose the other way would be if you could cheaply invest in everything on every crowdfunding platform - an index tracker for alt finance.


#4

Twenty8 is exclusive with their minimum investment amount, looking at their current stats the average invested amount is around £20k per/investor. They picked 28 investments based on research by NESTA and Intelligent Partnership which claim early-stage portfolios need at least 28 investment to have a 95% chance of securing at least one 10x investment. Having said that their current portfolio is interesting and it might work out. Interestingly they also have a Growth Fund including over 100 companies but that was done over many years.

Seedrs time frame for the 100 companies is very ambitious. They want 100 companies in 12 months or less. Seedrs Autumn Portfolio 2018 Update shows 168 SEIS & EIS completed deals in 2017, so it is possible you will end up investing in every EIS pitch on Seedrs. Worth checking out their latest update report, it even show stats including & excluding Revolut. I would like to see a serious early stage (S)EIS fund which is selective and does more due diligence but I do not see this happening anytime soon. Of course investing in all of the pitches on Seedrs could work.

Finally Seedcamp raised a private invite only fund on Seedrs earlier on in the year. It would be good to see Seedrs land funds like Seedcamp, like they have done with Ignite100, and Collider accelerators.


#5

Personally I wouldn’t touch this with a bargepole :worried:

There’s so much fluff in crowdfunding that I’d be terrified to leave the decision making to someone who’s determined to make a new investment every 3 days.


(Calum McWhir) #6

The question is - who is that someone? The small print references a ‘proprietary algorithm’, but at the same time claims Seedrs have no discretion. What is a fund without a fund manager? :thinking:


(Dave Smith) #7

Yeah, I’m with you, even if there are a couple of 10X investments in there the chances are that most will fail and wipe out your profits.

I think the best approach to crowdfunding is to be very selective and just get a few that you can imagine actually being a successful company in 10 years time


#8

I have questions.

We know (spiva data etc) that for publicly-listed markets that the average [1] index-tracking investor will have better long-term results than the average active investor, after transaction and fund fees are considered. So does the same thing happen in different asset types like crowdequity? Are your results better if you diversify a bit, or indeed a lot by buying a fund that reflects the entire whole market?

Or is there something fundamentally different about crowdequity that allows active selection to be much more effective? (Like, there are fewer competent investors in crowdequity so the market isn’t efficient and it’s easier to have an edge. Or that publicly-listed companies have passed a quality threshold, and the volatility or failure rate is lower or something.)

I am trying to work it out. If index-tracking averages better returns for average investors on publicly-listed markets, then it’s appealing to think it would also for crowdequity.

[1] Obviously the average investor does not exist. And I mean obviously when it’s you and me picking stocks, well, our performance will be better than the average because we have an edge on the market, amirite?!)


#9

I should add: and I guess that neither of these funds are actually “tracking” the entire crowdequity market.


(Dave Smith) #10

I believe there’s a lot of overvalued rubbish in the crowdfunding market with no chance of making good returns, which I why I think a more targeted approach is better.

Freetrade is a great example of a company I decided did have a good chance of making a decent return, Because the valuation was very reasonable and it was a product I wanted to use as soon as I saw it.


#11

Yes according to the stats in Seedrs’ Portfolio update. Unless you get a Revolut in which case having one can be better than diversifying. But Revolut is a unicorn, there’s not many of them about. Normally it’s compared to winning the lotto, don’t know if the odds are the same though :slightly_smiling_face: