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TheCrowdCafe: Global Crowdinvesting Industry Presentation
 

TheCrowdCafe: Global Crowdinvesting Industry Presentation

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Presentation on the global crowdinvesting industry given to the NYESN Meetup in NYC.

Presentation on the global crowdinvesting industry given to the NYESN Meetup in NYC.

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    TheCrowdCafe: Global Crowdinvesting Industry Presentation  TheCrowdCafe: Global Crowdinvesting Industry Presentation Presentation Transcript

    • 1 The Global Investment Crowdfunding Industry Data, Insight & Trends Jonathan Sandlund Jonathan Sandlund | @jsandlund @jsandlund Wednesday, August 28, 13
    • 2 thecrowdcafe.com research, data and analysis on the global crowdinvesting industry localinvestors.org live, think, invest local about me Jonathan Sandlund j@thecrowdcafe.com @jsandlund Wednesday, August 28, 13
    • 3 Thank you! Leading law firm serving the security crowdfunding industry: Portals; Crowdpreneurs; The Crowd. thecrowdcafe.com/NYESN Download Wednesday, August 28, 13
    • 4 Intro to Investment Crowdfunding The Mechanism Jonathan Sandlund | @jsandlund Wednesday, August 28, 13
    • 5 Funded$ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, August 28, 13
    • 6 Funded$ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, August 28, 13
    • 7 Funded$ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, August 28, 13
    • 8 Funded$ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, August 28, 13
    • 9 Funded $ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, August 28, 13
    • 10 Not Funded $ $ $ $ $ the mechanism FAMILY FRIENDS CUSTOMERS INVESTORS AFFINITIES X = Wednesday, August 28, 13
    • 11 reward vs. investment-based ~ $5,000 ~$160,000 Median Fundraise ~$775,000 Wednesday, August 28, 13
    • 12 Jonathan Sandlund | @jsandlund The Legalities of Crowdfunding Title II & Title III of the JOBS Act Wednesday, August 28, 13
    • The JOBS Act 13 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, August 28, 13
    • Accredited Crowdfunding IMPACT 14 ‣ Brings 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, August 28, 13
    • Democratized Crowdfunding IMPACT 15 ‣ Businesses • Conversion of Social to Financial Capital • New Era of Marketing ‣ Investors • Financial Empowerment • Trust • Meaningful Investment ‣ Society • Equal Opportunity Wednesday, August 28, 13
    • 16 The U.S. Market Jonathan Sandlund | @jsandlund Wednesday, August 28, 13
    • platforms: market segmentation 17 Investment Crowdfunding Platforms Niche/Affinity"Local" (SMBs)Startups Wednesday, August 28, 13
    • 18 Global Crowdfunding What can we learn? Jonathan Sandlund | @jsandlund Wednesday, August 28, 13
    • 19 Wednesday, August 28, 13
    • Macro-Data: Selected Sample 20 Equity 180 Deals $132 Million Equity 59 Deals ~$16 Million Debt 2,573 Deals $227 Million Equity 28 Deals $2.6 Million Equity 11 Deals $954k Equity 16 Deals $15 Million * Selected sample of platforms Wednesday, August 28, 13
    • 21 304 Equity Placements 2,573 Loans $300+ Million in Crowdfunding Transactions... Wednesday, August 28, 13
    • 22 Crowdfunding Models Innovation, Diversity Jonathan Sandlund | @jsandlund Wednesday, August 28, 13
    • 23 ‣ 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 2,573 Deals $227 Million Wednesday, August 28, 13
    • 24 Discovery Wednesday, August 28, 13
    • 25 Splash Bathroom Accessories Limited Wednesday, August 28, 13
    • 26 Credit Score History Wednesday, August 28, 13
    • 27 Key Financials Wednesday, August 28, 13
    • 28 Questions & Answers Wednesday, August 28, 13
    • 29 $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, August 28, 13
    • 30 ‣ 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 59 Deals ~$16 Million Jonathan Sandlund | @jsandlund Wednesday, August 28, 13
    • 31 ‣ 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 28 Deals $2.5 Million Jonathan Sandlund | @jsandlund Minimum Investment $16 Wednesday, August 28, 13
    • 32 ‣ Launched Mid-2012 ‣ Sector Focus Consumer Products/Retail ‣ Lowest Raise $440,000 Highest Raise $2.4 Million ‣ Averages (median, n=16) ‣ Raise ‣ Number of Investors 15 ‣ Investment Size $59,333 Equity 16 Deals $15 Million Jonathan Sandlund | @jsandlund Wednesday, August 28, 13
    • 33 ‣ 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 16 Deals $15 Million Wednesday, August 28, 13
    • 34 The Disruption Jonathan Sandlund | @jsandlund Wednesday, August 28, 13
    • 35 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. Driving a paradigm shift in early stage capital markets Investment Crowdfunding Wednesday, August 28, 13
    • Summed up... 36 The first major change in security law in 70+ years. Allows the internet to enter the fundraising process. Processes moved online, efficiencies realized, and incumbents with traditional cost structures obsoleted What it means... Technical Wednesday, August 28, 13
    • This is what it looks like... 37 Technical Wednesday, August 28, 13
    • Nearly all categories disrupted by the internet... 38 Except fundraising. Technical Wednesday, August 28, 13
    • A fundamentally more efficient capital formation process 39 Technical A Big Bank... Source: http://www-core.nesta.org.uk/library/images/NestaBanks.jpg Wednesday, August 28, 13
    • But it’s not just structural change driving the disruption 40 Cultural It’s cultural. Wednesday, August 28, 13
    • 41 Chicago Booth: Only 13% of Americans trust the stock market Distrust is pervasive Chicago Booth Financial Trust Index Cultural Wednesday, August 28, 13
    • Today little alternative to public markets 42 Tomorrow individuals empowered to invest in the the companies, causes and people they believe in Cultural Wednesday, August 28, 13
    • A cultural shift 43 ‣ Web 1.0 The Information Web ‣ Web 2.0 The Connected Web ‣ Web 3.0 The Meaningful Web Cultural Wednesday, August 28, 13
    • 44 Jonathan Sandlund j@thecrowdcafe.com @jsandlund Thank You! thecrowdcafe.com/NYESN Download Wednesday, August 28, 13