In a move that suggests crowdfunding platforms will continue morphing into fund managers, as Beauhurst’s Head of Research Pedro Madeira told thisisOliver* | *Crowdfunders a while ago, platform Seedrs has announced the company is about to launch a passive fund which will let clients back up to 100 start-ups via a computer algorithm.
The Sunday Times reports:
Investors in the fund, which will be launched next month, cannot pick the start-ups they back.
The fund, named The Seedrs EIS 100 Fund, will include ventures which will qualify for the Enterprise Investment Scheme (EIS) tax break.
The main aim of the project, it can be inferred, is to reach a better investor protection through a two-fold strategy based on machine learning and on greater diversification of the portfolio.
The company states on an ad hoc landing page that:
The fund will look to invest into certain eligible campaigns on the Seedrs platform. Once a business has reached certain milestones, the fund will automatically deploy a fixed percentage of the funding round target into the campaign.
Whilst it has been defined by The Sunday Times as a shift from the traditional crowdfunding concept, this is not the first experiment of its genre as a passive fund Twenty8 had been already launched by the Cambridge-based platform SyndicateRoom.
Meanwhile, criticism mounts within the investing community.