The Global Investment Crowdfunding Industry  Data, Insight & Trends  April 5th, 2013                                 Jonat...
about me thecrowdcafe.com leading provider of research, data and analysis on the global investment crowdfunding industry l...
Our sponsor: Thank you!         Leading law firm serving the security           crowdfunding industry: Portals.            ...
Intro to Investment Crowdfunding  The MechanismJonathan Sandlund | @jsandlund                                     4
reward vs. investment-based     Reward-Based                 Investment-Based‣ Receive no financial return   ‣ Securities o...
the mechanism                                                 $          INVESTORS                  $   CUSTOMERS AFFINITI...
the mechanism          INVESTORS                              $                                     $   CUSTOMERS AFFINITI...
the mechanism          INVESTORS                  $       $   CUSTOMERS AFFINITIES                                 X      ...
the mechanism          INVESTORS                      $       $   CUSTOMERS AFFINITIES                                 X  ...
the mechanism          INVESTORS                              $                                         $   CUSTOMERS AFFI...
the mechanism          INVESTORS                              $                                     $                   No...
The Legalities of Crowdfunding                          Title II & Title III of the JOBS ActJonathan Sandlund | @jsandlund...
The JOBS Act   ‣ Signed into law by President     Obama on April 5th, 2012   ‣ Passed the House 390-23; Passed     the Sen...
The JOBS Act             Title II                             Title III‣ Lifts ban on general solicitation   ‣ Businesses ...
Accredited Crowdfunding IMPACT     ‣ Will bring dramatic efficiencies to our private capital       markets          •     Ef...
Democratized Crowdfunding IMPACT ‣ Businesses  •   Conversion of Social to Financial Capital  •   New Era of Marketing ‣ I...
The U.S. MarketJonathan Sandlund | @jsandlund                                 17
platforms: market segmentation        Investment Crowdfunding Platforms  Startups        "Local" (SMBs)   Niche/Affinity  ...
Global Crowdfunding  What can we learn?Jonathan Sandlund | @jsandlund                                 19
Macro-Data: Selected Data        Equity                                                 Debt          Equity       180 Dea...
$290+ Million in Crowdfunding           Transactions...   1 Eq uity25    cem entsPla       1,751               Loans      ...
Crowdfunding Models  Innovation, DiversityJonathan Sandlund | @jsandlund                                 22
Debt                                      1,751 Deals                                      $144 Million    ‣     A+ to C R...
DiscoveryJonathan Sandlund | @jsandlund                                             24
Splash Bathroom Accessories LimitedJonathan Sandlund | @jsandlund                                                25
Credit Score HistoryJonathan Sandlund | @jsandlund                                 26
Key FinancialsJonathan Sandlund | @jsandlund                                 27
Questions & AnswersJonathan Sandlund | @jsandlund                                 28
Equity                                                                     34 Deals                                       ...
Equity                                                        17 Deals                                                    ...
Equity                                                         11 Deals                                                   ...
Equity                                                            11 Deals                                                ...
To SummarizeJonathan Sandlund | @jsandlund                                 33
Summary     ‣ Data          •        Zero Fraud          •        Young Market, Traditional S-Curve     ‣ Crowdfunding Pla...
Thank You!Jonathan Sandlundj@thecrowdcafe.com@jsandlund                     Jonathan Sandlund                             ...
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TheCrowdCafe | Investment Crowdfunding Presentation

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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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TheCrowdCafe | Investment Crowdfunding Presentation

  1. 1. The Global Investment Crowdfunding Industry Data, Insight & Trends April 5th, 2013 Jonathan Sandlund j@thecrowdcafe.comJonathan Sandlund | @jsandlund 1
  2. 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. 3. Our sponsor: Thank you! Leading law firm serving the security crowdfunding industry: Portals. Crowdpreneurs; The Crowd 3
  4. 4. Intro to Investment Crowdfunding The MechanismJonathan Sandlund | @jsandlund 4
  5. 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. 6. the mechanism $ INVESTORS $ CUSTOMERS AFFINITIES X $ = Funded FAMILY FRIENDS $ $Jonathan Sandlund | @jsandlund 6
  7. 7. the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 7
  8. 8. the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 8
  9. 9. the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 9
  10. 10. the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ = Funded FAMILY FRIENDS $ $Jonathan Sandlund | @jsandlund 10
  11. 11. the mechanism INVESTORS $ $ Not CUSTOMERS AFFINITIES X $ = FAMILY FRIENDS $ $ FundedJonathan Sandlund | @jsandlund 11
  12. 12. The Legalities of Crowdfunding Title II & Title III of the JOBS ActJonathan Sandlund | @jsandlund 12
  13. 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. 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. 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. 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. 17. The U.S. MarketJonathan Sandlund | @jsandlund 17
  18. 18. platforms: market segmentation Investment Crowdfunding Platforms Startups "Local" (SMBs) Niche/Affinity 18
  19. 19. Global Crowdfunding What can we learn?Jonathan Sandlund | @jsandlund 19
  20. 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. 21. $290+ Million in Crowdfunding Transactions... 1 Eq uity25 cem entsPla 1,751 Loans 21
  22. 22. Crowdfunding Models Innovation, DiversityJonathan Sandlund | @jsandlund 22
  23. 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. 24. DiscoveryJonathan Sandlund | @jsandlund 24
  25. 25. Splash Bathroom Accessories LimitedJonathan Sandlund | @jsandlund 25
  26. 26. Credit Score HistoryJonathan Sandlund | @jsandlund 26
  27. 27. Key FinancialsJonathan Sandlund | @jsandlund 27
  28. 28. Questions & AnswersJonathan Sandlund | @jsandlund 28
  29. 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. 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. 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. 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. 33. To SummarizeJonathan Sandlund | @jsandlund 33
  34. 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. 35. Thank You!Jonathan Sandlundj@thecrowdcafe.com@jsandlund Jonathan Sandlund 35
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