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:


#12

The Seedrs EIS100 Fund is live

  • 2% fee taken up front which “For a limited time, we will be waiving our platform fee on any investments” - it’s not clear how long it will be waived for.
  • The fund will invest in each company individually, which on one hand means you can sell on the secondary market, but on the other hand it means you have to claim 100 times if you want EIS relief

From what I can tell, it’s basically the same as Auto Invest, except you have less control.

There’s a fair amount of information in their documents.


#13

It isn’t a fund. It’s a glorified managed accounts structure.

Pass


#14

I agree it’s not great. Seems like a headache, you’d have to send off 100 EIS claims if you want the relief, plus dealing with poor exits.

It’s basically Seedrs Autoinvest, except you get less control, and since you have to pledge up front you also pay 2% for lost opportunities, like Marcus savings :upside_down_face:


#15

Good evening all and thank you for a discussion about the EIS100 Fund. As many of you have eluded to this is single investment decision to build a diversified portfolio of early stage equity.

Many of the topics raised here have been raised on Seedrs by investors and on the Fund’s discussion forum, we welcome many more questions as you think of them.

@saf thank you for pointing to the Portfolio Update. Industry data and our own points to diversification being a key driver of positive outcomes in the asset class. In the absence of any true beta, the EIS100 Fund has been designed as curated beta. Like many institutional investors, Seedrs rejects 95% of the deals we see and the majority of deals are co-investments with institutional investors.

I appreciate your comparison to Auto-Invest. Our plan is to ensure all investors have the appropriate tools to meet individual needs. To date we have been successful in helping the self-directed investor (many Freetrade users) originate and invest in deals to build their portfolios. As our deal flow continues to grow, Auto-Invest provides investors the options to help refine the deals that meet their personal investment preferences. These we’d view as active and quasi-active approaches. We also have a long tail of investors, or advisors of investors, who don’t have the time or inclination to view each deal - they have expressed interest in the asset class and investor demand for this solution has helped drive the build of the EIS100 Fund.

Regarding other Fund campaigns, please do get in touch with our team. We are working to provide more investment opportunities that meet investors needs and keen to hear more feedback on your interest in the Seedcamp round and others like Fuel, Pi Labs or Collider.

We can only address two users in first post - (@Dave +_rarther +_freetrade_cal) As above the Fund has been created based on investors needs, and as you’ll all know not all investors needs or views are the same. The Fund deployment logic certainly isn’t small print, investors and entrepreneurs have full visibility on the investment criteria. The deployment logic and algorithm to allow the Fund to invest and maintain a fixed % in all eligible campaigns sound straight-forward but required a lot of build. There is deliberately no discretion after the Fund begins deployment as a passive Fund needs to deploy passively and dispassionately. What we do no from our own data is many investors who build portfolios have had a good run on Seedrs, there are also plenty who have not. As with VCs the spread between top and bottom quartile performance is huge. This volatility drops considerably as portfolio sizes increase.

Seedrs Secondary Market is the piece that truly differentiates the platform and the experience for investors in the Fund. Whereby individuals circumstances are unique, the option for liquidity and investor exits is something that has not existed in other EIS Funds to date.

We welcome investor feedback on this and are willing to answer all question posted on the Fund Campaign. The Fund logic is a new investment solution for investors who aren’t actively seeking to build their portfolios or want a tool to help diversify their early stage equity portfolio. The underlying investors will receive the same benefits as other Seedrs investors from investing through the Seedrs platform, the investee companies will have the same benefits of capital from the Fund and other investors as well as the ongoing benefits of being a Seedrs Alumni company.

In addition to bring your thoughts and discussions to the Fund campaign, questions can also be sent to EIS100@seedrs.com.


(Alex Sherwood) #16

Seedrs are hosting a webinar about the EIS 100 fund on Thursday 14th from 1:00pm - 1:30pm.

https://register.gotowebinar.com/register/7980049082916448525

Please join me in a live discussion on the benefits the EIS100 Fund could bring to your portfolio.

The discussion will be followed by a Q&A session where you can ask your questions directly.

I’d be curious to hear the feedback from anyone who dials in..