Seedrs: Nicola Horlick delivers big boost for crowdfunding

Nicola Horlick's new film venture has raised all the money it wanted in less than a day - all via the Seedrs crowdfunding platform.

Crowdfunding has been all the rage for the last year or so. There are several forms of crowdfunding, but for me, the most interesting is equity crowdfunding. This is where small businesses can raise cash from private investors via a crowdfunding website.

Equity crowdfunding in the UK has received a big boost from Nicola Horlick this week. The former City ‘superwoman’ – famous for having a large family as well as working in a top fund management job – has launched a new fund management business that will invest in film production.

The new company is called Glentham Capital and it hopes to raise $100 million for film investment.

Glentham needed to raise £150,000 to get the ball rolling – essentially to pay the salary of Glentham’s CEO – so Horlick decided to raise cash via the Seedrs crowdfunding platform. (Read more about Seedrs in Earn 22% a year on a £10 investment.)

And the astonishing thing is that Glentham raised the required £150,000 in just 22 hours! The company is now fully invested and it’s too late for other folk to get involved.

No business has ever raised so much money so quickly on the Seedrs platform. In fact I’ve been keeping an eye on Seedrs for the last year and I’ve seen many businesses attempt to raise cash and never get to their funding target.

Moreover, the 27 other businesses that have reached their funding target have normally taken far longer than 22 hours. So this is an important milestone for both Seedrs and the whole crowdfunding sector in the UK.

Horlick has said that she decided to use Seedrs because she liked the platform’s nominee structure. This means that Seedrs acts on behalf of all the small shareholders and handles issues such as voting. That makes life simpler for Glentham because it means that the company only has to deal with Seedrs rather than managing a relationship with more than a hundred small shareholders.

It will be interesting to see how Glentham performs as an investment for its new shareholders. These new shareholders are getting 10% of the business in return for their combined investment of £150,000. That values the company at £1.5 million and it’s really hard to know whether that’s a reasonable valuation or not.

Remember, the £150,000 won’t be invested directly in films. This money is to get the company up and running – it will then raise further cash from investors which will then go into films.

The positive case for Glentham is that it has the backing of Nicola Horlick and is investing in a growth industry. On the other hand, the film industry is inherently risky and many films flop completely. In truth, any investment on a crowdfunding platform is inherently risky as the chances of a young business failing are high.

Given that high level of risk, you should only invest small amounts in any businesses via Seedrs. (You can invest as little as £10.) The best approach is probably to build a portfolio of at least ten small stakes and hope that one or two prove to be big hits.

> Check out Seedrs.

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