TheCrowdCafe | Investment Crowdfunding Presentation

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Check out thecrowdcafe.com for research and data on the investment crowdfunding industry. …

Check out thecrowdcafe.com for research and data on the investment crowdfunding industry.

Presentation delivered at the Silicon Valley Crowdfund Conference on April 5, 2013

Twitter: @jsandlund
LinkedIn: www.linkedin.com/in/jsandlund

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  • 1. The Global Investment Crowdfunding Industry Data, Insight & Trends April 5th, 2013 Jonathan Sandlund j@thecrowdcafe.comJonathan Sandlund | @jsandlund 1
  • 2. about me thecrowdcafe.com leading provider of research, data and analysis on the global investment crowdfunding industry localinvestors.org live local. think local. invest local. Jonathan Sandlund j@thecrowdcafe.com @jsandlund 2
  • 3. Our sponsor: Thank you! Leading law firm serving the security crowdfunding industry: Portals. Crowdpreneurs; The Crowd 3
  • 4. Intro to Investment Crowdfunding The MechanismJonathan Sandlund | @jsandlund 4
  • 5. reward vs. investment-based Reward-Based Investment-Based‣ Receive no financial return ‣ Securities offered in return for crowds’ investment‣ Legal today ‣ Equity‣ Perks or rewards in return for pledges ‣ Debt ‣ Revenue share ‣ Blend ‣ The JOBS Act ‣ Title II vs Title III 5
  • 6. the mechanism $ INVESTORS $ CUSTOMERS AFFINITIES X $ = Funded FAMILY FRIENDS $ $Jonathan Sandlund | @jsandlund 6
  • 7. the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 7
  • 8. the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 8
  • 9. the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 9
  • 10. the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ = Funded FAMILY FRIENDS $ $Jonathan Sandlund | @jsandlund 10
  • 11. the mechanism INVESTORS $ $ Not CUSTOMERS AFFINITIES X $ = FAMILY FRIENDS $ $ FundedJonathan Sandlund | @jsandlund 11
  • 12. The Legalities of Crowdfunding Title II & Title III of the JOBS ActJonathan Sandlund | @jsandlund 12
  • 13. The JOBS Act ‣ Signed into law by President Obama on April 5th, 2012 ‣ Passed the House 390-23; Passed the Senate 73-26 ‣ 270 day rule-making period given to the SEC & FINRA (Dec. 31,   2012) ‣ SEC missed Dec. 31st deadline ‣ Title II & Title III delayedJonathan Sandlund | @jsandlund 13
  • 14. The JOBS Act Title II Title III‣ Lifts ban on general solicitation ‣ Businesses Raise up to $1mm and advertising on security in 12-month period from both offerings to accredited accredited and non-accredited investors investors‣ Broker-Dealer License/Affiliation ‣ Investors tiered limits on investment amount‣ Provided issuer takes reasonable steps to verify accreditation ‣ Rule-making includes SEC and FINRA Crowdfunding for Crowdfunding for Accredited Investors Everyone 14
  • 15. Accredited Crowdfunding IMPACT ‣ 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 companies in an enormous wayJonathan Sandlund | @jsandlund 15
  • 16. Democratized Crowdfunding IMPACT ‣ Businesses • Conversion of Social to Financial Capital • New Era of Marketing ‣ Investors • Financial Empowerment • Trust • Meaningful Investment ‣ Society • Equal Opportunity 16
  • 17. The U.S. MarketJonathan Sandlund | @jsandlund 17
  • 18. platforms: market segmentation Investment Crowdfunding Platforms Startups "Local" (SMBs) Niche/Affinity 18
  • 19. Global Crowdfunding What can we learn?Jonathan Sandlund | @jsandlund 19
  • 20. Macro-Data: Selected Data Equity Debt Equity 180 Deals 1,751 Deals 34 Deals $132 Million $144 Million ~$7 Million Equity Equity Equity 9 Deals 17 Deals 11 Deals $784,000 $1.3 Million $9.7 Million* Selected sample of platforms; data is a selected sample 20
  • 21. $290+ Million in Crowdfunding Transactions... 1 Eq uity25 cem entsPla 1,751 Loans 21
  • 22. Crowdfunding Models Innovation, DiversityJonathan Sandlund | @jsandlund 22
  • 23. Debt 1,751 Deals $144 Million ‣ A+ to C Risk Bands Applied ‣ Offer 1, 3, 5 year loans ‣ £5,000 - £500,000 ‣ Auction model: investors bid ‣ Secondary market ‣ Crowdfunded two $80,000 small business loans in under 29 minutesJonathan Sandlund | @jsandlund 23
  • 24. DiscoveryJonathan Sandlund | @jsandlund 24
  • 25. Splash Bathroom Accessories LimitedJonathan Sandlund | @jsandlund 25
  • 26. Credit Score HistoryJonathan Sandlund | @jsandlund 26
  • 27. Key FinancialsJonathan Sandlund | @jsandlund 27
  • 28. Questions & AnswersJonathan Sandlund | @jsandlund 28
  • 29. Equity 34 Deals ~$7 Million ‣ Launched 2010 ‣ Sector Focus General (concentration: internet, food & drink) ‣ Lowest Raise $19,000 Highest Raise $1.6 million ‣ Averages (median, n= 34) ‣ Raise $97,000 ‣ Equity Offered 15% ‣ Post-Money Valuation $633,000 ‣ Number of Investors 51 ‣ Investment Size $2,468 (low: $331; high: $11k)Jonathan Sandlund | @jsandlund 29
  • 30. Equity 17 Deals $1.3 Million ‣ Launched July 2012 ‣ Sector Focus Internet ‣ Lowest Raise $15,200 Highest Raise 240,000 ‣ Averages (median, n=17) ‣ Raise $64,000 ‣ Equity Offered 10% ‣ Post-Money Valuation $560,000 ‣ Number of Investors 69 Minimum Investment ‣ Investment Size $1,127 $16Jonathan Sandlund | @jsandlund 30
  • 31. Equity 11 Deals $9.7 Million ‣ Launched Mid-2012 ‣ Sector Focus Consumer Products/Retail ‣ Lowest Raise $500,000 Highest Raise $2.4 Million ‣ Averages (median, n=4) ‣ Number of Investors 20 ‣ Investment Size $39,667Jonathan Sandlund | @jsandlund 31
  • 32. Equity 11 Deals $9.7 Million ‣ Domain Expertise Founding team has deep experience investing in consumer product and retail industries ‣ Curated Deal-Flow To date, less than 2% of applications have been approved ‣ 3 Weeks Time it took Melt to raise $1,000,000Jonathan Sandlund | @jsandlund 32
  • 33. To SummarizeJonathan Sandlund | @jsandlund 33
  • 34. Summary ‣ Data • Zero Fraud • Young Market, Traditional S-Curve ‣ Crowdfunding Platforms • Colorfully Diverse - Debt, Equity, Rev-Share, Blend • Empowering Businesses & Investors ‣ Value • Businesses, Investors, CommunitiesJonathan Sandlund | @jsandlund 34
  • 35. Thank You!Jonathan Sandlundj@thecrowdcafe.com@jsandlund Jonathan Sandlund 35