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Grow VC Group: crowd investing and governance


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Description about Grow VC Group, crowd investing and p2p finance, and how to manage global de-centralized organization and keep people motivated. Also some points about business vs military strategy.

Description about Grow VC Group, crowd investing and p2p finance, and how to manage global de-centralized organization and keep people motivated. Also some points about business vs military strategy.

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  • 1. From startup crowdfunding to finance sector disruption Aalto University April 29, 2014 –Jouko Ahvenainen Grow VC Group ++ ++ @growvc ++ MARKETS – ASSETS – CROWD ++ Copyrights © Grow VC Group 2014
  • 2. Copyrights © Grow VC Group 2014 Jouko Ahvenainen ++ Corporates: Entrepreneur: Other Activities: Transatlantic Economic Council TOP 100 TOP 15
  • 3. Finance and Services Infrastructure Consulting & Professional Services Grow VC Group ++ Copyrights © Grow VC Group 2014 Hong Kong - London - New York - San Francisco - Sao Paolo The Grow VC Group is a worldwide pioneer and leader in the crowd investing, peer-to-peer and online investment market.
  • 4. Copyrights © Grow VC Group 2014 Market places in our portfolio ++
  • 5. Copyrights © Grow VC Group 2014 #1 market place infrastructure ++ Technical platform, services like investor background check, investment escrow accounts, due diligence services, credit check, transaction settlement, investor communications
  • 6. Finance to a new era ++ Copyrights © Grow VC Group 2014
  • 7. WE HAVE A DREAM: more equal opportunities, where entrepreneurs and private investors unite to accelerate innovation
  • 8. Copyrights © Grow VC Group 2014 Short history ++ •  We were probably the first equity crowdfunding service, launched the startup crowdfunding in 2009 –  The regulatory environment was very complex then, and it was the main reason not to start in the US. •  We have done a lot of pioneer work in the market and also work finance regulators e.g. in the US, UK, EU and Singapore •  With new innovations it is always difficult to predict the timing –  We decided that our model is to survive and adapt until the market really takes off •  Important strategic review in May 2012 à from startup crowdfunding only to Grow VC Group –  Grow VC Group is more like a holding company that have majority share in some key ecosystem and infrastructure companies and minority in vertical oriented crowdfunding or p2p market places typically with a partner that has strong competence in the vertical in question •  Crowdfunding concept has really grown from startups to all kind of securities and assets •  Also institutional investors are coming more interested, i.e. diversify their portfolio through automated co-investing and co-lending platforms, and e.g. avoid the costs of funds.
  • 9. Copyrights © Grow VC Group 2014 Internet has been a distribution channel ++
  • 10. Copyrights © Grow VC Group 2014 Disruption now – global virtual market places++
  • 11. Copyrights © Grow VC Group 2014 Go back to the idea of stock market ++
  • 12. Copyrights © Grow VC Group 2014 Create a new effective finance retail market ++ Crowd investing Market Place P2P Lending Companies / Assets Market Places Investors / resources
  • 13. Copyrights © Grow VC Group 2014 Three big things for finance ++ 1.  Crowdfunding and similar market places enable effective investment and lending models for all kind of investors, companies and assets 2.  Market places enable new co- investment and lending models, i.e. get many kind of investors and investment models to work together 3.  ‘Platforms’ can also ‘automate’ a fund, i.e. investors don’t always have to pay for fund management fees, when a platform with investment criteria and co-investing models can do the same (a kind of index fund)
  • 14. Copyrights © Grow VC Group 2014 New regulation is coming ++ Title  I  (Crea'on  of  EGCs;  “IPO  on  ramp”)   Largely  effec've  on  enforcement.     Title  II  (Amendments  to  General   Solicita'on/Adver'sing)   Effec've  since  September  2013.   Title  III  (Crowdfunding,  i.e.  investments   from  non-­‐accredited  investors)   The  SEC  collected  comments  by  January   2014,  now  SEC  processes  the  comments,   expected  to  be  effec've  in  6  to  9.   Title  IV  (Increasing  Reg  A  offerings  to  up  to   $50  million)   Not  yet  effec've,  date  unclear.   Title  V  (Increased  thresholds  for   registra'on  with  SEC)   Largely  effec've  on  enforcement.   Title  VI  (Increased  thresholds  for   registra'on  with  SEC  for  banks)   Largely  effec've  on  enforcement.     Read more:
  • 15. Copyrights © Grow VC Group 2014 Opportunity for traditional finance companies too ++ 1. Funding round or loan application • A company opens a funding round or apply a loan 2. Crowd investing or p2p lending • Crowd, i.e. ordinary people, can offer an investment or loan, and if enough money available, the company gets money 3. Co- investment or co-lending • A bank or investment company can join to a deal, i.e. make co-investment or participate the loan
  • 16. §" § " §" §" §" More about new finance models ++
  • 17. Group Governance and Management ++ Copyrights © Grow VC Group 2014
  • 18. §  Majority and minority shares" -  Over 50% - clear control; under 50% - board and strategic decisions" §  Grow VC Group Management" -  Strategic targets and decisions, e.g. new businesses" -  Monthly entity review: sales, revenue, costs, strategic targets, issues" §  Each entity has its own management " -  Group representative in the board (Chairman position in the key companies)" §  Some decisions require Group and entities to make a decision together" -  For example, at the moment we discuss a case to offer the p2p platform, business and investment instrument planning and Group investment in one new p2p lending service in Asia" Grow VC Group Governance ++
  • 19. §  Very entrepreneur type people – many team members have had their own companies" §  Very de-centralized organization" -  Key locations London, New York, San Francisco, and Hong Kong" -  Some resources in Helsinki" -  Team members in e.g. Germany, Italy, Brazil, Zimbabwe, India" -  Software development also e.g. in Vietnam, Ukraine, Pakistan, Thailand" §  Online project management tools" §  Regular calls" §  Very self-driven people" Management ++
  • 20. New Strategies – in business and military •  Guerilla and terrorist organizations are fighting with small and self-organized cells, rapid attacks to a strategic target, and leave the enemy to wonder, how and where to respond •  How someone can build an IED for a few hundred dollars and use it to destroy millions of dollars military vehicles and fighters who have got top training and equipment •  Generally they mean that resources are not used to any other goal than the creation of value for the end customer •  A lean startup gets a product beta version to the market as soon as possible, and then based on the feedback and results develop it further •  Big organizations often like to build expensive systems and always expand •  Often you actually need more competent people and versatile technology and tools Then they can better adapted to different kind of situations and needs, and they can also surprise the competitor (or enemy) •
  • 21. Some visions ++ §  We cannot have one optimal model for all people" §  Many people respect independent and self-driven roles, but they are not easy" §  Crowdsourcing and crowdfunding also have influence on organizations à old centralized sourcing and funding structures are not the only way to operate" §  Agile organization, operations and teams" §  Global organizations, capability to work in different cultures, versatile competence and flexible attitude" §  You must be genuinely in main market and respect their culture and how the market work" -  No old-fashion export attitude, no teaching, and no arrogance"
  • 22. Jouko Ahvenainen +1 646 363 6664 (US) +44 7889 833 165 (UK) Grow VC Group ++ ++ @growvc ++ Slideshare: Grow VC MARKETS ASSETS CROWD