Assalamikum,
As you know Seedrs (www.seedrs.com) you can invest into start-ups raising capital.
Before investing in any start-up, I want to understand if the company would be permissible to invest in the first place.
I understand stay away from the clear haram (Interest base company like loans, mortgages), alcohol, gambling etc…
How can I do my own research to see if a start-up would be permissible to invest into?
Also, for the research what tools, resources, website, tips and trick can help?
JazakaAllah Khairan
Ws,
Venture capital is, generally speaking, fine as it tends to be financed through equity and not debt. There are sometimes complications like preference shares to watch out for though. But largely speaking, as long as the business and how it makes money is okay, you should be okay.
Where it can get tricky is if you are investing via an ASA, SAFE or CLN - these are all forms of convertible finance which need careful sharia review. The problem with going with someone like Seedrs is that you won’t have that close contact with the startup, or an advocate to make sure it’s all above board.
I’m not sure if you’re aware, but we run our own angel syndicate here at IFG. We invest in high-quality startups which won’t be accessible on the likes of Seedrs. Feel free to join us as long as you meet the criteria - ifg.vc/investors - and you can learn more iA. As well as the higher quality deal flow, you also have the benefit of us doing the background sharia work as we personally invest in deals also.
We also do a lot on the education side with regular webinars for our syndicate members!
Mohsin
Assalamikum Mohsin,
JazakaAllah Khiran for your reply!
I was wanting Seedrs as side investments as you can invest little as a few hundred pounds.
When you say ASA, SAFE or CLN, what does that mean and what are they in a board sense?
IFG angel syndicate, i am member of and really love it Alhamduillah!
Thank you,
Mohammed
Great - glad to have you on-board!
Sure:
ASA: Advanced Subcription Agreement
SAFE: Simple Agreement for Future Equity (US version of ASA)
CLN: Convertible Loan Note
We would typically expect a Seedrs raise to note have any of those instruments (or at worst, an ASA). An ASA is usually sharia-compliant but sometimes may not be - depends on the terms around pricing etc.
Assalamikum Ibrahim,
JazakaAllah Khiran for the session for IFG syndicate yesterday afternoon, was really great to get more answers answered! I am looking forward to the end of this month investment you mention 
In regards to this topic.
Seedrs, if there any way I could check the terms or and ask Seedrs, to confirm?
and If I ask Seedrs;
What should I ask Seedrs?
And What should I look out for?
The reasoning behind this, i like the idea of side investment of few hundard pounds on the side myself, as if feel give me more a chance to research into companies, startup and understand startup investments itself. Also, as I come from IT Technical background and most startups are tech focused, I can understand which are hot tech and could have a chance, even-tho its come crowed platform like Seedrs.
Thank you
Mohammed
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You need to sign up to our angel investor course when it launches! https://courses.islamicfinanceguru.com/p/startup-investing
You should have a look at the legal docs for every deal that they send over, and understand from Seedrs what documents they will be signing on your behalf with the startup.
Ibrahim
Assalamikum Ibrahim,
Thats would be great the course! I am going to sign up.
I’ll read the all document thought as much as possible.
JazakaAllah Khiran and thank you for your advice! 
Mohammed
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