Crowdfunding as an asset class - Markus Lampinen, GrowVC and CrowdValley

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Markus talked about trends in modern finance, the emergence and background for crowdfunding, and the manifestation of macro trends such as the demand for democracy and efficiency in the world of …

Markus talked about trends in modern finance, the emergence and background for crowdfunding, and the manifestation of macro trends such as the demand for democracy and efficiency in the world of finance. The discussion also touched on current trends and a future outlook on crowd driven investment models.

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  • Ipod shuffle storyIn a mass media society, the basic units are the large collective ‘masses’. In contrast, a network society is based on individuals who form voluntary connections with other individuals regardless of location. In a network society, the network becomes a basic unit of organization at all levels (individuals, groups and organizations). Online social networks, media networks and technology networks act as the catalysts for a networked society.

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  • 1. Crowdfunding – Asset Classes and Crowd Driven Models Markus Lampinen October 27, 2012 CrowdFuture
  • 2. Background – Grow VC Marketplace for startup funding Founded 2009 “Everyone Funding Startups” – 2011 - $25M – 4000+ startups – 190+ countries – Several raised rounds, first exits Big idea? To democratize startup funding
  • 3. The Network Society: Networkscause a comprehensiverestructuring of society atlarge, they are breaking oldmodels of organization.
  • 4. Crowdfunding is .. Small money, large crowd No gatekeepers, anyone can invest
  • 5. WhyCrowdfunding? Same access to information Efficient and effective framework via direct participation New customer audiences Access to new asset classes .. no one is as smart as everyone?
  • 6. Securities Crowdfunding Equity investments Interest bearing loans Other models One model DOES NOT fit all cases
  • 7. Who benefits? VC‟s and Angels get – More liquidity – More information – More validation and filtering by „the crowd‟ Ordinary people – Get more equal opportunities and access Entrepreneurs – Engaged investors and validation
  • 8. Summary: Grow VC Group  Grow VC Groups pioneers funding models for companies globally  The Group focuses especially to offer crowd based marketplace and community technology, and investment products that can work with or be used by 3rdparties  Crowd Valley offers platform and back office functions for crowdfunding services – Already over 400 customer platforms in the network – #1 equity crowdfundingplatform in the world  Mutual Seed Fund offers a crowdfunding co-investment service  Grow Advisors, ChangeLab23 and Grow Global Program offer services to build startups globally8
  • 9. Grow VC Group – growvcgroup.comFinance and Services Portfolio Infrastructure Samples:
  • 10. Over 16,500 investors Over 4,300 startups Users from 200 countries Almost $35 Million investment money 10% monthly growth Dozens of investments, millions of money Over 400 3rd party crowdfunding networks on the platform The most global market place for equity 10
  • 11. Equity Investments Are Just The StartUS statistics (Bureau of Economic Analysis, Feb 2010) The “professional investor” numbers – VC Market: $12.4B – Angel Investor market: $23B • 100 – 300K active angels • Only a few hundred in Silicon Valley The “ordinary people” market – “Informal investor market”: $162B – Household savings: $8000B+ and rising..
  • 12. Crowdfunding is bigger than fundingthe next Facebook or Google
  • 13. Trust networkschallenge outmodedmodels of control
  • 14. Trust and Micro loans
  • 15. People invest in.. What they know and trust Who they know and trust What does it mean for crowdfunding?
  • 16. A new language:Read & write, participatory, conversational:markets are conversations, marketing is aconversation, business is a social science!
  • 17. Connected Ecosystem is Needed
  • 18. Connected Local Ecosystems• One BIG Kickstarter?• There is a reason the financial market is de-centralized with specialized brokers, marketplaces and exchanges• Local operators like incubators, angel networks, brokers add credibility and transparency• Who do you trust?29.10.2012 www.growvcgroup.com 19
  • 19. Crowdfunding Ecosystem It‟s important to build the framework for crowdfunding together with other investment models – Get other investors and money to participate – Help manage investments – Continuity for next funding rounds Investors can also offer other value There can be co-investment models, passive or active It is important to build co-operation with business angels, VC‟s, incubators and others in the ecosystem 20 www.growvcgroup.com
  • 20. Crowdfunding is Diverse Crowdfunding is not only for non-accredited investors or for equity investments Crowdfunding for institutional investors, high net worth individuals, accredited investors… Crowdfunding for equity, loans, real estate, specific properties or assets...
  • 21. Case: Oil & Gas Oil and Gas properties in the US Crowdfunding for institutional investors, possibility to allow “normal people” to participate in the future Co-investments with mezzanine fund Typical deal $8M - $20M
  • 22. Case: Real Estate Real estate is a known asset class, suffers from high entry costs and low liquidity Crowdfunding for accredited investors, possibility to allow “normal people” to participate in the future More efficiency and transparency in the process
  • 23. Case: Grassroots Ecosystem Joint effort between university incubator, angel network and early stage fund Direct participation via crowdfunding to allow grassroots to reinforce itself Benchmarking “entrepreneurial ecosystem”
  • 24. WE HAVE A DREAM:moreequal opportunities, wherecompanies and investorsunite to accelerate innovation
  • 25. Future• Crowdfunding is here to stay, equity crowdfunding is just starting to grow• Crowdfunding does not replace other models or solution for needs, it needs to work with the entire ecosystem• A working, connected ecosystem is needed: It‟s crucial to build an ecosystem where different stakeholders and investment models work together, including crowdfunding• Crowdfunding is not only for startup funding, it will have an impact on the whole finance sector and make it more effective 26 www.growvcgroup.com
  • 26. Thank You Markus Lampinen CEO / Crowd Valley Inc +1 646 801 4054 (US) markus@crowdvalley.com 845 Third Avenue, New York29.10.2012 www.growvcgroup.com 27