Seedrs, a London-based crowdfunding investment firm, announced a plan Monday to allow a broad range of U.S. investors to make equity investments in startups and small businesses.
Seedrs provided £4.5 million (equal to about $7 million) to British and European peer-to-peer lending and crowdfunding platforms in 2014, according to the London-based publication Tech City News.
Through the new U.S. platform, general investors will have the opportunity to capitalize on startup firms – something that has so far been limited to wealthy investors and financial institutions, the company said. In the U.K. and Europe, investors made equity investments of as little as 10€ or £10 (equal to about $11 to $15.50) using the platform, the company added.
Seedrs announced the launch will take place in early 2016 and focus on Junction Investments, a California-based crowdfunding platform Seedrs purchased in late 2014. The Securities and Exchange Commission made the launch possible on Oct. 30 by approving regulations flowing from Title III of the 2012 Jump Our Business Startups Act.
According to the SEC, the new rules allow businesses to fund up to $1 million every 12 months from crowdsourcing. Investors must qualify to make the investments and may face restrictions. Those with an annual income or net assets of less than $100,000 can invest the greater of $2,000 or 5% of their annual income; those making more than $100,000 per year or with more than $100,000 in net assets can invest up to 10% of their annual income but not more than $100,000, the agency said.
Seedrs CEO and Co-Founder Jeff Lynn (pictured) praised the SEC's action and coming launch.
"I have had the privilege of being involved in the law making process for U.S. crowdfunding ever since the JOBS Act was introduced in 2011, and I am very pleased to see that the SEC has finally adopted rules implementing Title III," Lynn said in a prepared statement. "We believe this heralds the emergence of equity crowdfunding as a vibrant form of finance in the United States – just as it has become in the U.K. and Europe – and Seedrs is perfectly positioned to take advantage of the sector's growth. The beta testing we are announcing today will be our first foray into the market, and we look forward to growing our presence there significantly in 2016."
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