TheCrowdCafe | Investment Crowdfunding Presentation
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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. ...

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 TheCrowdCafe | Investment Crowdfunding Presentation Presentation Transcript

  • The Global Investment Crowdfunding Industry Data, Insight & Trends April 5th, 2013 Jonathan Sandlund j@thecrowdcafe.comJonathan Sandlund | @jsandlund 1
  • 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
  • Our sponsor: Thank you! Leading law firm serving the security crowdfunding industry: Portals. Crowdpreneurs; The Crowd 3
  • Intro to Investment Crowdfunding The MechanismJonathan Sandlund | @jsandlund 4
  • 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
  • the mechanism $ INVESTORS $ CUSTOMERS AFFINITIES X $ = Funded FAMILY FRIENDS $ $Jonathan Sandlund | @jsandlund 6
  • the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 7
  • the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 8
  • the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ $ = Funded FAMILY FRIENDS $Jonathan Sandlund | @jsandlund 9
  • the mechanism INVESTORS $ $ CUSTOMERS AFFINITIES X $ = Funded FAMILY FRIENDS $ $Jonathan Sandlund | @jsandlund 10
  • the mechanism INVESTORS $ $ Not CUSTOMERS AFFINITIES X $ = FAMILY FRIENDS $ $ FundedJonathan Sandlund | @jsandlund 11
  • The Legalities of Crowdfunding Title II & Title III of the JOBS ActJonathan Sandlund | @jsandlund 12
  • 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
  • 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
  • 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
  • Democratized Crowdfunding IMPACT ‣ Businesses • Conversion of Social to Financial Capital • New Era of Marketing ‣ Investors • Financial Empowerment • Trust • Meaningful Investment ‣ Society • Equal Opportunity 16
  • The U.S. MarketJonathan Sandlund | @jsandlund 17
  • platforms: market segmentation Investment Crowdfunding Platforms Startups "Local" (SMBs) Niche/Affinity 18
  • Global Crowdfunding What can we learn?Jonathan Sandlund | @jsandlund 19
  • 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
  • $290+ Million in Crowdfunding Transactions... 1 Eq uity25 cem entsPla 1,751 Loans 21
  • Crowdfunding Models Innovation, DiversityJonathan Sandlund | @jsandlund 22
  • 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
  • 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 ~$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
  • 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
  • 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
  • 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
  • To SummarizeJonathan Sandlund | @jsandlund 33
  • 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
  • Thank You!Jonathan Sandlundj@thecrowdcafe.com@jsandlund Jonathan Sandlund 35