Enabling small investors to get in at the seed funding
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News Talk Breakfast with Keira Kelly and Shane Coleman. In association with AIR. Weekday mornings at 7 on News Talk. Ever wonder why the big venture capitalists get all the financial upside of a startup while retail investors have to wait until after the flotation? Well, my next guest has created a platform which he says will enable small investors to get in at the seed funding stage and benefit if the company takes off. Of course, they will also lose their shirt if that startup disappears, which alas, many of them do. Scott Ashmore is the co-founder of Shuttle. Good morning, Scott. Good morning. Thanks for having me, Joe. Tell us a little bit more about how Shuttle does it.
Yeah, so we have a platform. And like you mentioned there, we help ambitious professionals to get access to invest, co-invest alongside top venture capital funds. So it's a very simple platform.
Why do retail investors miss out on early startup funding?
You can come on, you can sign up. You pay €250 annually to access the platform, and then you have a quarterly investment amount. So that could be €250, anywhere up to whatever you'd like. And we help you resource two investment opportunities every quarter for you. And that would be alongside top venture capital firms, could be Irish, could be European. And we'll help you co-invest alongside those venture capital firms equally into those opportunities that we source. And to help you really kind of build that diversified portfolio, because like you said, some of them can go to zero. So what's really important in private markets is that you're able to diversify into a large amount of opportunities to give yourself that exposure to possibly one asset or one opportunity that goes on to become something like Stripe or Intercom.
Yeah. Explain to me, though, how you get access at the seed funding stage. Is it through these venture capital funds which are getting access?
Exactly. So we've built relationships with a lot of venture capital funds. We're regulated by the central bank and that was a lengthy process. So that gave us a lot of time to build relationships with some of European's top VCs. So we have great relations with them. We'll source small allocations in larger funding rounds. So for example, a company, a startup might be raising 2 million. The venture capital firm will be leading the round and they'll be investing a million. And we'll come in and we'll say, hey, we'll take a 50,000 to 100,000 euro allocation in that round. And we'll help our customers get exposure to that round. Okay. And do you have to pay a fee to the venture capitalists?
How does Shuttle enable small investors to participate in seed funding?
No, we don't pay a fee to the venture capitalists. So on our platform, Airworks, obviously I mentioned that 250 euro fee, and then we take a 10% performance fee on the back end, but we don't pay any fees to the venture capital firm. So you get 10% of the profit or 10% of the entire investment? 10% only on the profits. So only after the money has been returned to the investors and their initial investment, then we'll take a 10% on the top.
Okay. And do you tell your subscribers to invest when a specific opportunity arises? Let's say you come across a company that you think has especially good growth potential. Do you kind of send out a note to all your subscribers and say, listen, I would get in here with a couple of thousand if you have it?
Yeah, well, we don't tell people whether they should or shouldn't invest. We'll put all the information together. We'll create all the documents that give investors a holistic view of the opportunity. We'll send that out to all the investors on our platform. And then it's up to them to make the final decision whether they would like to invest or not. But we just give them all the information they need to make an informed decision.
Now, your platform is not for those on the average salary, though. It's for those with the thousands to spare.
Yeah, so it is, this is, I mean, it's no secret, this is a high-risk, high-reward asset class, and it's something you shouldn't be putting all of your eggs into. So, yeah, probably on the people working within tech earning, you know, anywhere from 75k upwards per year, that's who we'd be targeting.
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