Why is the presence of a Co-Investor necessary?
A Co-Investor is a person, or a group of persons like Business Angels (or Venture capital), who invests a substantial amount in the financing stage of the company.
At Spreds, we believe that the sources of financing of a company should be well balanced, this is why we opted for a co-investment model. All campaigns on Spreds are financed by both a community of investors and what we call “professional investors” who bring one or more large tickets.
The community of investors benefit from the same conditions as the professional investor (business angels, venture capital funds, …) , ensuring fairness. Entrepreneurs can benefit from a new expertise and potentially gain a board member.
If the campaign has raised its minimum financing amount on our platform, each entrepreneur has 6 months to find his or her co-investor(s) that will have to invest a minimum of 25% of the maximum financing amount (if the campaign is part of one of our Tracers, the minimum co-investment amount will be €50,000). If they fail to find the necessary amount among their co-investors, the campaign is cancelled.
Spreds has set three criteria to validate a professional investor as a Co-Investor :
- Criterion no. 1 : The Co-Investor is independent relative to the entrepreneurs (there is no close family link with the entrepreneurs) ;
- Criterion no. 2 : The Co-Investor has the qualities of an investor or possesses expertise in a strategic domain of the company being financed ;
- Criterion no. 3 : The Co-Investor has done his analytical work, his Due Diligence, and he has negotiated the terms of the investment (evaluation, clauses of the shareholders agreement, amount of interest, duration of the loan, etc.).