1
The Global Investment Crowdfunding Industry
Data, Insight & Trends
Jonathan Sandlund j@thecrowdcafe.com
Jonathan Sandlun...
2
thecrowdcafe.com research, data and analysis on
the global investment crowdfunding industry
localinvestors.org live, thi...
3
Intro to Investment Crowdfunding
The Mechanism
Jonathan Sandlund | @jsandlund
Wednesday, July 17, 13
4
Funded$
$
$
$
$
the mechanism
FAMILY FRIENDS
CUSTOMERS
INVESTORS
AFFINITIES
X =
Wednesday, July 17, 13
5
Funded$
$
$
$
$
the mechanism
FAMILY FRIENDS
CUSTOMERS
INVESTORS
AFFINITIES
X =
Wednesday, July 17, 13
6
Funded$
$
$ $
$
the mechanism
FAMILY FRIENDS
CUSTOMERS
INVESTORS
AFFINITIES
X =
Wednesday, July 17, 13
7
Funded
$
$
$
$
$
the mechanism
FAMILY FRIENDS
CUSTOMERS
INVESTORS
AFFINITIES
X =
Wednesday, July 17, 13
8
Not
Funded
$
$
$ $
$
the mechanism
FAMILY FRIENDS
CUSTOMERS
INVESTORS
AFFINITIES
X =
Wednesday, July 17, 13
9
reward vs. investment-based
~ $5,000
~$100,000
Average Fundraise
Wednesday, July 17, 13
10
Jonathan Sandlund | @jsandlund
The Legalities of Crowdfunding
Title II & Title III of the JOBS Act
Wednesday, July 17, ...
The JOBS Act
11
Title II Title III
‣ Lifts ban on general solicitation
and advertising on security
offerings to accredited...
Accredited Crowdfunding IMPACT
12
‣ Will bring dramatic efficiencies to our private capital
markets
• Efficiencies = (Interne...
Democratized Crowdfunding IMPACT
13
‣ Businesses
• Conversion of Social to Financial Capital
• New Era of Marketing
‣ Inve...
14
The U.S. Market
Jonathan Sandlund | @jsandlund
Wednesday, July 17, 13
platforms: market segmentation
15
Investment Crowdfunding Platforms
Niche/Affinity"Local" (SMBs)Startups
Wednesday, July 1...
16
Global Crowdfunding
What can we learn?
Jonathan Sandlund | @jsandlund
Wednesday, July 17, 13
Macro-Data: Selected Sample
17
Equity
180 Deals
$132 Million
Equity
58 Deals
~$15 Million
Debt
2,248 Deals
$194 Million
Eq...
18
289 Equity
Placements
2,248 Loans
$300+ Million in Crowdfunding
Transactions...
Wednesday, July 17, 13
19
Crowdfunding Models
Innovation, Diversity
Jonathan Sandlund | @jsandlund
Wednesday, July 17, 13
20
‣ A+ to C Risk Bands
Applied
‣ Offer 1, 3, 5 year loans
‣ £5,000 - £1,000,000
‣ Secondary market
‣ Crowdfunded two
$80,...
21
Discovery
Wednesday, July 17, 13
22
Splash Bathroom Accessories Limited
Wednesday, July 17, 13
23
Credit Score History
Wednesday, July 17, 13
24
Key Financials
Wednesday, July 17, 13
25
Questions & Answers
Wednesday, July 17, 13
26
$0!
$2,000,000!
$4,000,000!
$6,000,000!
$8,000,000!
$10,000,000!
$12,000,000!
$14,000,000!
Monthly Loan Originations Si...
27
‣ Launched 2010
‣ Sector Focus General (concentration: internet, food & drink)
‣ Lowest Raise $19,000 Highest Raise $2....
28
‣ Launched July 2012
‣ Sector Focus Internet
‣ Lowest Raise $15,200 Highest Raise 240,000
‣ Averages (median, n=24)
‣ R...
29
‣ Launched Mid-2012
‣ Sector Focus Consumer Products/Retail
‣ Lowest Raise $440,000 Highest Raise $2.4 Million
‣ Averag...
30
‣ Domain Expertise Founding team has deep experience investing in
consumer product and retail industries
‣ Curated Deal...
31
The Disruption
Jonathan Sandlund | @jsandlund
Wednesday, July 17, 13
32
Crowd
funding
Technical
Disruption
Entrance of the internet into
the private capital formation
process.
Cultural
Disrup...
A fundamentally more efficient
capital formation process
33
Technical
A Big Bank...
Source: http://www-core.nesta.org.uk/lib...
But it’s not just structural change
driving the disruption
34
Cultural
It’s cultural.
Wednesday, July 17, 13
35
Chicago Booth: Only 13% of Americans trust the
stock market
Distrust is pervasive
Chicago Booth Financial Trust Index
C...
Today little alternative to public markets
36
Tomorrow individuals empowered to invest in the
the companies, causes and pe...
A cultural shift
37
‣ Web 1.0 The Information Web
‣ Web 2.0 The Connected Web
‣ Web 3.0 The Meaningful Web
Cultural
Wednes...
38
Jonathan Sandlund
j@thecrowdcafe.com
@jsandlund
Thank You!
Wednesday, July 17, 13
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CrowdfundX NYC Presentation: Global Investment Crowdfunding

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Transcript of "CrowdfundX NYC Presentation: Global Investment Crowdfunding"

  1. 1. 1 The Global Investment Crowdfunding Industry Data, Insight & Trends Jonathan Sandlund j@thecrowdcafe.com Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  2. 2. 2 thecrowdcafe.com research, data and analysis on the global investment crowdfunding industry localinvestors.org live, think, invest local about me Jonathan Sandlund j@thecrowdcafe.com @jsandlund Wednesday, July 17, 13
  3. 3. 3 Intro to Investment Crowdfunding The Mechanism Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  4. 4. 4 Funded$ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, July 17, 13
  5. 5. 5 Funded$ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, July 17, 13
  6. 6. 6 Funded$ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, July 17, 13
  7. 7. 7 Funded $ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, July 17, 13
  8. 8. 8 Not Funded $ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, July 17, 13
  9. 9. 9 reward vs. investment-based ~ $5,000 ~$100,000 Average Fundraise Wednesday, July 17, 13
  10. 10. 10 Jonathan Sandlund | @jsandlund The Legalities of Crowdfunding Title II & Title III of the JOBS Act Wednesday, July 17, 13
  11. 11. The JOBS Act 11 Title II Title III ‣ Lifts ban on general solicitation and advertising on security offerings to accredited investors ‣ Provided issuer takes reasonable steps to verify accreditation ‣ Must file amended Form D ‣ Businesses Raise up to $1mm in 12-month period ‣ Investors tiered limits on investment amount ‣ Rule-making includes SEC and FINRA Crowdfunding for Accredited Investors Crowdfunding for Everyone Wednesday, July 17, 13
  12. 12. Accredited Crowdfunding IMPACT 12 ‣ Will bring dramatic efficiencies to our private capital markets • Efficiencies = (Internet) * (Private Sector Innovation) ‣ Geographically, socially indiscriminate ‣ Stands to motivate accredited capital off the sidelines and into private markets in an enormous way Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  13. 13. Democratized Crowdfunding IMPACT 13 ‣ Businesses • Conversion of Social to Financial Capital • New Era of Marketing ‣ Investors • Financial Empowerment • Trust • Meaningful Investment ‣ Society • Equal Opportunity Wednesday, July 17, 13
  14. 14. 14 The U.S. Market Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  15. 15. platforms: market segmentation 15 Investment Crowdfunding Platforms Niche/Affinity"Local" (SMBs)Startups Wednesday, July 17, 13
  16. 16. 16 Global Crowdfunding What can we learn? Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  17. 17. Macro-Data: Selected Sample 17 Equity 180 Deals $132 Million Equity 58 Deals ~$15 Million Debt 2,248 Deals $194 Million Equity 27 Deals $2.2 Million Equity 9 Deals $784,000 Equity 15 Deals $13 Million * Selected sample of platforms Wednesday, July 17, 13
  18. 18. 18 289 Equity Placements 2,248 Loans $300+ Million in Crowdfunding Transactions... Wednesday, July 17, 13
  19. 19. 19 Crowdfunding Models Innovation, Diversity Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  20. 20. 20 ‣ A+ to C Risk Bands Applied ‣ Offer 1, 3, 5 year loans ‣ £5,000 - £1,000,000 ‣ Secondary market ‣ Crowdfunded two $80,000 small business loans in under 29 minutes Debt 2,248 Deals $194 Million Wednesday, July 17, 13
  21. 21. 21 Discovery Wednesday, July 17, 13
  22. 22. 22 Splash Bathroom Accessories Limited Wednesday, July 17, 13
  23. 23. 23 Credit Score History Wednesday, July 17, 13
  24. 24. 24 Key Financials Wednesday, July 17, 13
  25. 25. 25 Questions & Answers Wednesday, July 17, 13
  26. 26. 26 $0! $2,000,000! $4,000,000! $6,000,000! $8,000,000! $10,000,000! $12,000,000! $14,000,000! Monthly Loan Originations Since Inception! August 2010 June 2013 Wednesday, July 17, 13
  27. 27. 27 ‣ Launched 2010 ‣ Sector Focus General (concentration: internet, food & drink) ‣ Lowest Raise $19,000 Highest Raise $2.3 million ‣ Averages (median, n= 48) ‣ Raise $124,800 ‣ Equity Offered 16% ‣ Post-Money Valuation $805,000 ‣ Number of Investors 52 ‣ Investment Size $2,712 (low: $331; high: $16k) Equity 58 Deals ~$15 Million Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  28. 28. 28 ‣ Launched July 2012 ‣ Sector Focus Internet ‣ Lowest Raise $15,200 Highest Raise 240,000 ‣ Averages (median, n=24) ‣ Raise $64,000 ‣ Equity Offered 10% ‣ Post-Money Valuation $520,000 ‣ Number of Investors 75 ‣ Investment Size $1,070 Equity 27 Deals $2.2 Million Jonathan Sandlund | @jsandlund Minimum Investment $16 Wednesday, July 17, 13
  29. 29. 29 ‣ Launched Mid-2012 ‣ Sector Focus Consumer Products/Retail ‣ Lowest Raise $440,000 Highest Raise $2.4 Million ‣ Averages (median, n=15) ‣ Number of Investors 15 ‣ Investment Size $59,333 Equity 15 Deals $13 Million Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  30. 30. 30 ‣ Domain Expertise Founding team has deep experience investing in consumer product and retail industries ‣ Curated Deal-Flow To date, less than 2% of applications accepted onto the platform ‣ 3 Weeks Time it took Melt to raise $1,000,000 Jonathan Sandlund | @jsandlund Equity 15 Deals $13 Million Wednesday, July 17, 13
  31. 31. 31 The Disruption Jonathan Sandlund | @jsandlund Wednesday, July 17, 13
  32. 32. 32 Crowd funding Technical Disruption Entrance of the internet into the private capital formation process. Cultural Disruption A desire to connect more meaningfully with the things we buy, the things we do, and the things we invest in. Two mega-trends colliding to drive a paradigm shift in early stage capital markets Investment Crowdfunding Wednesday, July 17, 13
  33. 33. A fundamentally more efficient capital formation process 33 Technical A Big Bank... Source: http://www-core.nesta.org.uk/library/images/NestaBanks.jpg Wednesday, July 17, 13
  34. 34. But it’s not just structural change driving the disruption 34 Cultural It’s cultural. Wednesday, July 17, 13
  35. 35. 35 Chicago Booth: Only 13% of Americans trust the stock market Distrust is pervasive Chicago Booth Financial Trust Index Cultural Wednesday, July 17, 13
  36. 36. Today little alternative to public markets 36 Tomorrow individuals empowered to invest in the the companies, causes and people they believe in Cultural Wednesday, July 17, 13
  37. 37. A cultural shift 37 ‣ Web 1.0 The Information Web ‣ Web 2.0 The Connected Web ‣ Web 3.0 The Meaningful Web Cultural Wednesday, July 17, 13
  38. 38. 38 Jonathan Sandlund j@thecrowdcafe.com @jsandlund Thank You! Wednesday, July 17, 13
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