The startup intends to open a marketplace for investors and will buy small stakes in businesses that raise money there.
Odin, a platform that helps fund managers and startups raise money from investors, has secured a $3 million seed round.
Nearly all of the 220 angel investors that took part in the deal were members of Odin’s own investment network. The business intends to use the funds to launch a marketplace where those seeking funding can discover investors.
What Odin does
Odin, a company founded in 2021, produces electronic legal and deal documentation that startups and fund managers submit to the investors they are raising money from.
Through the platform, investors can support startups with as little as $1,000. While that might sound like it could turn into a cap table nightmare, Odin bundles all investors into a single company — hence how it has also managed to have hundreds of investors in its round.
According to Patrick Ryan, cofounder of Odin, “in terms of things like corporate governance, you’re not running around trying to get approval for stuff that requires investor consent from 50 to 100 smaller cheque investors,” pooling angels is appealing for businesses.
After 18 months of beta testing, the platform was made publicly available last month. Anyone in Europe can use the platform to manage their rounds, even though the UK currently accounts for 70% of Odin’s business.
At the moment, Odin makes money by charging users of its platform for services like contract structuring and legal administration. A fixed fee of $2,500 is paid by founders. VCs and angel groups are charged a fixed fee of $2,000 plus 1.95% of the total amount raised, up to a maximum of $10,000.
An increase in investment platforms
Odin is just one of numerous platforms of this type that have appeared in Europe as angel investing has become more widespread. The UK’s Vauban, which was acquired by US-based Carta last year, and Germany’s Bunch (which also collected money from its own angel investors). Since not all angel investors are able to write $20k+ checks, which founders say is typically the minimum amount needed from investors at pre-seed and seed, investing in groups enables individuals to pool smaller sums in order to reach that level.
“The two main businesses doing this in the US are AngelList and Carta — and we’re trying to roll out something similar for Europe,” says Odin’s cofounder Patrick Ryan “However, we believe that the communication aspect is more crucial, particularly in Europe where the market is so fragmented.”
Users of Odin may email prospective investors directly from the platform to “keep track of who has invested and who hasn’t, who has signed legal documents, and who has committed to invest but hasn’t sent the money,” according to the company.
Equalising the (very unlevel) playing ground Odin believes that by making it simpler for angel investors to make investments of even £1000, they will see a greater diversity.
“A lot of deals [at pre-seed and seed] have a minimum ticket size of like £20k— and that increases at Series A,” claims Ryan. “People who are able to write those cheque sizes are more likely to be men.”
Since the platform’s launch, 32% of Odin’s angel investors have been female. In comparison, the average for the UK is 14%.
The startup also discovered that women are three times more likely than men to invest in other women, and that since the platform’s launch, women-led founding teams have raised 7% of the platform’s total funding. While not precisely comparable, just 1% of all capital was raised in 2022 by women-only teams in Europe.
In the next 12 months, Odin will attempt to put out a marketplace for people raising money to locate investors.
That would eventually be another source of money for the firm as Odin will charge a percentage of the earnings on an exit of investments through its marketplace. Imagine it as a distributed venture capital firm, advises Ryan.
By exposing groups of investors to transactions, the startup has already acquired interests in 50 businesses; but, up until now, the process has been handled manually by Odin introducing them via email. Upon the marketplace’s launch, those investment groups would become searchable on the platform.
The business also intends to focus more on facilitating post-investment collaboration between funders and investors, for instance by enabling them to send out notifications and updates.
Over the coming year, scaling in Europe is also planned, with France and Germany serving as significant markets. Ryan informs Sifted that after Europe, Odin will probably move into Asia, particularly Singapore.