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GrowVC Transatlantic Economic Council 2012 12-03
 

GrowVC Transatlantic Economic Council 2012 12-03

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Grow VC recommendation summary for Transatlantic Economic Council meeting about SME funding.

Grow VC recommendation summary for Transatlantic Economic Council meeting about SME funding.

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    GrowVC Transatlantic Economic Council 2012 12-03 GrowVC Transatlantic Economic Council 2012 12-03 Presentation Transcript

    • Grow VC Group ++ www.growvcgroup.com ++ @growvcgroup ++Transatlantic SME FinanceWhite House Conference Center, Washington DCDecember 3, 2012 / Jouko Ahvenainen Copyrights © Grow VC Group 2012
    • Develop SME Finance ++ Copyrights © Grow VC Group 2012
    • Summary of the JOBS Act ++§  The  Purpose:  The  JOBS  Act  is  intended  to  encourage  a  wide  range  of  companies  to  raise   capital  §  The  JOBS  Act  includes  provisions  that:   1.  Increase  the  number  of  shareholders  a  company  with  assets  in  excess  of  $10  million   may  have  before  being  required  to  register  with  the  SEC  from  500  shareholders  of   record  to  500  “unaccredited"  shareholders  or  2,000  total  shareholders.   2.  Create  a  new  exempLon  whereby  a  company  may  raise  up  to  $1  million  during  any   12  month  period  by  selling  securiLes  through  “crowdfunding,”  (i.e.  raising  a  small   amount  of  money  from  a  large  number  of  unaccredited  investors  via  a  website  (or  a   “funding  portal”)).   3.  Create  a  new  category  of  issuer  called  an  “emerging  growth  company”  with   reduced  disclosure  requirements  and  greater  regulatory  flexibility  for  a  5  year   period  aRer  an  IPO/registraLon.       4.  LiR  the  current  ban  on  “general  solicitaLon”  and  “general  adverLsing”  in  specific   kinds  of  private  placements.   5.  Raise  the  limit  for  securiLes  offerings  exempted  under  RegulaLon  A  from  $5  million   to  $50  million.   Copyrights © Grow VC Group 2012
    • Effec/ve  Dates  of  the  JOBS  Act  Title  I  (CreaLon  of  EGCs;  “IPO  on  ramp”)   Largely  effecLve  on  enforcement    Title  II  (Amendments  to  General   The  SEC  had  been  schedule  to  propose  SolicitaLon/AdverLsing)   new  rules  by  4  July  but  did  not  do  so  unLl   29  August.  Final  rules  not  likely  before  end   of  1st  quarter  2013.  Title  III  (Crowdfunding)   The  SEC  is  required  to  adopt  new  rules  by   31  December  but  most  expect  these   changes  to  be  implement  in  mid/late  2013  Title  IV  (Increasing  Reg  A  offerings  to  up  to   Not  yet  effecLve,  date  unclear.  $50  million)  Title  V  (Increased  thresholds  for   Largely  effecLve  on  enforcement.  registraLon  with  SEC)  Title  VI  (Increased  thresholds  for   Largely  effecLve  on  enforcement.  registraLon  with  SEC  for  banks)     Copyrights © Grow VC Group 2012
    • New Solutions Are Needed ++Funding type Problem Solution candidateNon High Bank or credit card lending Peer-to-peer lending modelsGrowth doesn’t work properly and instrumentsCompaniesSeed How to build the first product Angels, crowdfunding, new p2p lending modelsSeries A VC’s pick only a few companies Other funding models like lending and crowdfunding for non-VC casesSeries B to C No many investors in this area New market place models: crowd-based funds, syndicate market places and instrumentsExit of investors The market is not liquid, i.e. very Market places for differentbefore Exit long-term investments, decrease phases investment willingnessIPO Big step Easier transition thru different market places Copyrights © Grow VC Group 2012
    • Regulation ++ For example, Grow VC Group, activities: ü  Crowdfunding Regulatory Intermediary Association (CFIRA) ü  Crowdfunding Professional Association (CFPA) ü  National Crowdfunding Association (NLCFA) ü  Cooperation governmental investors, e.g. Singapore Investment Company, ü  European Crowdfunding Network (ECN) ü  US Delegation in Transatlantic Economic Forum ü  Cooperation with Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) Conclusion ü  Important to find common solutions and guidelines in order to get the market work better and make it easier for investors and companies6 Copyrights © Grow VC Group 2012
    • Conclusions ++•  Crowdfunding brings more money to SME, but also creates more effective and democratic funding markets from seed phase to IPO •  US JOBS Act is not only early phase (<$1M) seed funding regulation, but allows market private investments generally and make IPO easier •  Already now first market places for later phases and other asset class too•  Open transparent market places offer more opportunities to entrepreneurs, but also make them immediately more market oriented•  Crowdfunding is not only an isolated model, there are already now models how it works with angels and VC’s, and how e.g. VC’s can also utilize it to leverage their own investments and also raise capital to funds•  Any market place need critical mass, similar regulation and policies help the market to work better•  The market will be a combination of different phases, industries (e.g. IT or life science) and geographical areas market places that can also work together7 Copyrights © Grow VC Group 2012
    • About Grow VC Group ++ Copyrights © Grow VC Group 2012
    • Over 17,500 investors Over 4,500 startups Users from 200 countries Almost $35 Million investment money 10% monthly growth Dozens of investments, millions of money Over 400 3rd party crowdfunding network on the platform The most global market place for equity Copyrights © Grow VC Group 2012
    • Grow VC Group ++Finance and Services Infrastucture Portfolio Samples: Copyrights © Grow VC Group 2012
    • Services and Solutions for all Crowdfunding Ecosystem Needs ++ Turn key solution to start crowdfunding for any assets, equity or lending, www.crowdvalley.com Consulting and investment bank services for crowdfunding ecosystem, www.growadvisors.com Crowdfunding co-investment fund, works with many crowdfunding services, www.mutualseedfund.com The leading global market place to invest money or work into early phase startups, www.growvc.com UX & development services to create web and mobile applications that convey experiences www.changelab23.com Copyrights © Grow VC Group 2012
    • Jouko Ahvenainen jouko@growvc.com +44 7889 833 165 (UK) +1 646 363 6664 (US) Grow VC Group ++www.growvcgroup.com ++ @growvcgroup ++