Seedrs to launch secondary market in a bid to boost liquidity
Startups 100-featured equity crowdfunding site will launch secondary market in early summer, encouraging more investment into early-stage companies
Seedrs, the Startups 100-featured equity crowdfunding site, is set to launch a secondary market early this summer in a bid to improve liquidity for its investors and encourage more investment in early-stage companies.
Slated for a Beta launch next month, the secondary market will allow existing backers of a Seedrs company to sell their shares to other investors and realise early returns, while having the opportunity to increase their stake.
At first, the market will be open for just one week every month, with Seedrs’ Valuation Policy deciding the price of shares. Depending on how it behaves, the trading window may be expanded and the opportunity to negotiate or bid could be introduced.
It’s hoped the secondary market will make equity crowdfunding a more attractive option for investors and make it easier for early-stage companies to secure funding via the platform.
As shares in each company are held by Seedrs on behalf of its investors rather than individually, this makes it easier for the market to be rolled out and reduces the burden of ongoing paperwork and the risk of double trading.
Jeff Lynn, co-founder of Seedrs, commented: “The potential opportunities that a secondary market brings for buyers, sellers and entrepreneurs alike makes this development incredibly exciting.
“Perhaps most importantly, we believe this will help businesses who are raising capital through Seedrs: with the prospect of secondary sales now available, we expect more investors are likely to want to back the great businesses we work with.”