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Social based funding
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Social based funding

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  • 1. Social-based Funding November 2013 High-level Overview This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside Radical Ideas | Practical Implementation the client organization without prior written approval from SystemicLogic.
  • 2. Categories of social financial activity Personal Financial Management Crowdfunding Open Innovation Crowdfactoring Peer2Peer Crowdinvesting Crowdlending Crowd Funding PFM Open Innovation The Crowdfunding market is changing at an exponential rate. Our research aims to capture the key competitors and models that are enabling this social phenomenon at a particular static point in time. We expect these landscapes to be constantly changing. Page 2 Radical Ideas | Practical Implementation
  • 3. Thecrowdcafe: Crowdinvesting ecosystems “Crowdinvesting is not a platform play, but an ecosystem play. The value of the actual platform—the technology that connects businesses with investors and facilitates an online transaction between the two—is becoming more commoditized by the day as Platform-as-a-Service providers proliferate, enabling anyone to launch a crowdinvesting platform. And in some instances, one that is fully broker-dealer compliant out of the box. It’s not the technology that will differentiate, and ultimately decide the success of, platforms—it’s their ecosystems. These ecosystems will consist of value added products and services; delivered to both businesses and investors; both pre and post-funding. A leading example of a service is curation. It delivers value to investors by reducing noise in the marketplace and improving the quality of deals they see.” Page 3 Radical Ideas | Practical Implementation
  • 4. Disruptive technology and crowdfunding “In May 2013, Google announced an investment of $125 million in the peer-to-peer crowdfunding firm Lending Club. In the same month, Google Ventures (the venture capital arm of Google), together with Union Square Ventures and other VCs, invested $7.5 million in Series A funding for CircleUp, a crowdfunding platform that allows small businesses to sell equity to accredited investors. Does Google’s investments in crowdfunding mark the beginning of an era in which tech giants provide financial services” Page 4 Radical Ideas | Practical Implementation
  • 5. Tracking the development of Crowdfunding UK band Marillion is funded by US fans to tour ($60 000) Spring Street Brewery launches the first Internet IPO US intensifies lobbying of congress to pass CrowdFundin bill Australian Small Scale Offerings Board (ASSOB) allows general public to invest 2003 SEC issues a ArtistShare is the first release allowing successful platform companies to post for fans to pre-fund their public offerings albums of popular online bands Regulation Funding circle launches in the UK The Term “Crowdfunding” is coined Direct IPO platform lets the general public invest directly in small public offerings 1996 Pledgie and Sellaband Start 2006 IndiGoGo is launched for films 2007 Grameen Bank founder Muhammad Yunus awarded Nobel Prize 2008 Congress passes JOBS ACT RocketHub is launched 2009 Kickstarter is launched Regulation exemption for people investing within a 200 mile radius of the company 2010 2011 2012 Patrick McHenry authors Crowdfunding Bill in the House of Representatives Platforms Event Page 5 Radical Ideas | Practical Implementation 2013
  • 6. The development of various Crowdfunding platforms Est. Total Funding Size in ($ Million) 2003: First Donation based platforms (Artistshare) 2004: Crowdinvesting platforms are launched (Secondmarket) 2005: First P2P Microlender (Zopa; Kiva.org) 2006: Crowdinvesting platform (ASSOB) 2008: Rewards based platforms (indiegogo) 2003 2004 2005 2006 2008 2010: B2B crowdlending (Funding Circle) 2009 2010 Congress passes JOBS ACT (USA) 2011 2012 Major Pioneers in the various types of funding platforms Page 6 Radical Ideas | Practical Implementation 2013
  • 7. Crowdfunding and Corporate banking trends UK band Marillion is funded by US fans to tour ($60 000) Funding circle launches in the UK The Term “Crowdfunding” is coined Australian Small Scale Offerings Board (ASSOB) allows general public to invest Spring Street Brewery launches the first Internet IPO Direct IPO platform lets the general public invest directly in small public offerings 1996 Pledgie and Sellaband Start 2003 2006 ArtistShare is the first SEC issues a release successful platform for allowing companies to fans to pre-fund post their public albums of popular offerings online bands US intensifies lobbying of congress to pass CrowdFunding bill IndiGoGo is launched for films 2007 2008 Grameen Bank founder Muhammad Yunus awarded Nobel Prize Value added service (Prepaid airtime) 2009 FX Trading (FIX API, Electronic, FX Trading) Mobile capability (mBanking, USSD,) Treasury solution (Islamic online treasury (OLT)) Online banking (Secured, web based portal, balances, transactions, transfer) Page 7 2009 2010 2011 Patrick McHenry authors Crowdfunding Bill in the House of Representatives Regulation exemption for people investing within a 200 mile radius of the company 2012 2013 Estimated Crowdfunding market of $5.1b Value added service (Track, reporting) Fund hedging (Global Operating Platform) Tax services (Automated workflow, application, collection platform) 2008 Congress passes JOBS ACT RocketHub is launched Kickstarter is launched Website look & feel (Banking 2.0, redesign, calculators) Remittance service (Online, money transfer) Crowdfunding market of $2.8b Mobile capability (Trade Advisor, payment, app) Payment capability (Payroll, integrated payment processing, contactless corporate card , commercial cards) 2010 Educational website (Women, start and grow businesses) 2011 2012 FX Trading (Integrated, online, trading, platform) Treasury solution (Mobile, treasury management) 2013 FX Trading App Online banking (Enhanced, secure, online platform, FX) Radical Ideas | Practical Implementation
  • 8. The rapid emergence and growth of Crowdfunding platforms Platform Market Share & Growth Year on Year Growth in Funding Volumes (2012) Estimated African Share is $0.1m Grew 85% to $1.4bn. Grew 30% to $116m. Grew 111% to $1.2bn. 2013 est. Total $5.1bn Page 8 (Crowdinvesting is expected to Exceed $1bn in 2013) How are banks taking to Crowdfunding? •FNB Private Clients sponsor Angel Hub •Santander teams up with Funding Circle in the UK •BBVA has two crowdfunding platforms, BBVA 'Sum' and 'BBVA Friends & Family‘ •ABN AMRO launched a crowdfunding pilot, Seeds.nl •Volksbank Bühl has developed a micro community based crowdfunding platform in Germany •Belfius in Belgium has partnered with Angel.me •Holvi has announced a partnership with new crowdfunding site Mesenaatti What are Traditional alternative investors saying? Angel Investors Will Embrace Equity Crowdfunding, online platforms provide an improved company and investor experience. The average angel investor reviews 2,000 business plans annually while choosing to invest in just 3-5 ventures per year Venture Capitalist Firms Where VCs will interface with crowdfunding sites is by investing in the best crowdfunding platforms on a more focused level Private Equity Firms Many private equity firms are already strong advocates of equity crowdfunding sites and see the platform as an opportunity to diversify Radical Ideas | Practical Implementation
  • 9. BBVA Research Releases Report, Addresses Crowdfunding July 2013 “Crowdfunding is a disruptive innovation that commercial banks cannot ignore. Perhaps, for the first time in history, business and individuals have access to an unprecedented source of capital created from the small contributions of millions of individuals around the world. This is good news for individuals and entrepreneurs, who may never have to worry about not being able to access traditional lending sources or using more expensive funding solutions to finance their projects. It is also good news for small investors seeking a higher return than conventional investment products. For banks, crowdfunding poses a challenge. From here on, they will face a new competitor with lower operating costs, a different approach to risk management and a simpler product offering. To what extent crowdfunding platforms will displace commercial banks in the retail and small business segments remains to be seen. However, banks should be prepared for this trend and make it work to their advantage. “ Page 9 Radical Ideas | Practical Implementation
  • 10. How are the traditional banks and lenders reacting • "There are people in SA looking at Crowdfunding," JSE head of strategy and policy Siobhan Cleary • “The country desperately needs to get more small businesses up and running, and South African banks and venture capitalists are slow to dole out the rands. The country’s financial infrastructure is solid, and by leveraging this technology, massive opportunities could be created” Felicity Duncan Moneyweb • The UK government has committed to award £100 million to alternative lenders such as online peer-to-peer finance companies in a bid to help boost funding to entrepreneurs • “Lending and equity-based crowdfunding are disruptive technologies for the banking industry with the potential to displace banks as the primary source of funding for personal and small business loans.” and “Crowdfunding platforms could naturally evolve to become the primary source of financial services for young generations.” BBVA Research, US Economic Outlook 2Q-2013 • Peter Renton, founder of Lend Academy: “We know there is also interest in the sector (Crowdfunding) from Barclays, Citi and Deutsche Bank.” • James Watt Founder of BrewDog "We never consider a bank or an investment group when we need funds for more growth plans.“BrewDog is Fastest-growing food and drink company in the UK for three years Page 10 Radical Ideas | Practical Implementation
  • 11. Communities naturally move to crowd based lending and funding Local Farming Community •Pool together large amounts of resource •Loans are provided between farmers •Three party agreements between Co-Ops and farmers •Risk is spread across a wider group of individuals •Banks are largely excluded Farmer B Farmer A Co-op, Agri Business Local “social” communities (BrewDog) •The community can own part of BrewDog •Investors are entitled to “Epic discounts” •Membership is grated with an Equity punk card •They have been able to raise more than ₤1m in less than a month •Currently running Equity for punks 3 •BrewDog is Fastest-growing food and drink company in the UK for three years Page 11 Radical Ideas | Practical Implementation
  • 12. Further the agriculture value chain consists of several key activities that will benefit from crowdfunding activity Crowdfund finance to farmers and facilitate international development organizations Allow local communities to provide additional services around the primary farming activity Crowdfund information sharing and research Finance Supplies R&D Inputs Production Crowdfund various utilities that are used in the production process Facilitate long term lease and loan agreements Page 12 End users can invest in their local farmers and receive an income Collection/ Processing Distribution Wholesale/ Traders Retailing End User Crowdfunding provides an avenue for either intermediation or disintermediation Give development institutions the ability to facility distribution of produce Radical Ideas | Practical Implementation
  • 13. What are the future trends in Crowdfunding? Page 13 Radical Ideas | Practical Implementation
  • 14. Crowdfunding Platform Figures Radical Ideas | Practical Implementation
  • 15. World wide growth in Crowdfunding based on… Number of platforms worldwide Funding volume millions Revenue in US$ Revenue and fees millions • Over 40% of surveyed platform charge a transaction fee based on a percentage commission of funds paidout • Commission ranges from 2% to 25% • Additional revenue generated includes a fixed fee per campaign/ project and registration or listing fees • 63% surveyed used PayPal services • Over 45% companies require investors to deposit monies in escrow accounts Page 15 Source: Crowdfunding Industry Report – May 2012 Crowdsourcing LLC Radical Ideas | Practical Implementation
  • 16. World wide funding figures 2012 Image courtesy of statista.com Page 16 Radical Ideas | Practical Implementation
  • 17. Sources of financing for startups Page 17 Radical Ideas | Practical Implementation
  • 18. Funds raised through crowdfunding Funds Raised through Crowdfunding Platforms in 2012 by Type Page 18 Funds Raised through Crowdfunding Platforms in 2012 by Region Radical Ideas | Practical Implementation
  • 19. Recipients of the funds Crowdfunding recipients by size, 2011 Crowd-funding revenue by size of recipient, 2011 Start-ups and small business: Less than $10 million in company annual revenue Small enterprises: $10 million - $100 million in revenue Medium enterprises: $100 million - $1 billion in revenue Large enterprises: More than $1 billion in revenue Page 19 Source: Crowdsourcing LLC Radical Ideas | Practical Implementation
  • 20. Period and funding Average campaign timeframes Paid-out funds: reward & donations based Weeks Revenue by industry recipients, 2011 Page 20 Source: Crowdfunding Industry Report – May 2012 Crowdsourcing LLC Paid-out funds: equity based Radical Ideas | Practical Implementation
  • 21. Peer to Peer (P2P) Lending Radical Ideas | Practical Implementation
  • 22. Overview of P2P lending • Also called Social Banking, where the lending transaction is facilitated directly between individual lender and borrower via a web platform • The type of loan can be secured or unsecured • The facilitator’s service provision includes – Connecting the borrower with potential lender(s) – Conducting credit checks on both parties, FICA and affordability checks in the case of borrowers – Providing the platform where borrowers may list the requested loan amount and reasons thereof – Matching borrowers with appropriate lenders and facilitating the contract terms – May also provide second market listing where investors may sell their investment to other investors Page 22 Radical Ideas | Practical Implementation
  • 23. Overview of P2P lending • There are two rate models that may be used, namely – Pre-set rate model: where the interest rate is based on borrower’s credit scoring – Auction model: where investors bid on the listed loan request • There are different types of lending, including – Direct lending: transacting parties comprise a lender and a borrower – Pooled lending: where a single investment of capital is split amongst multiple borrowers; where the source of investment is multiple lenders; or a combination of multiple lenders and borrowers Page 23 Radical Ideas | Practical Implementation
  • 24. Overview of P2P lending • The facilitators and service providers do not need a banking license as they are not deposit taking institutions, nor are they raising capital for lending purposes • There is minimal risk for the facilitator and service provider because the terms of contract are negotiated between the lender and borrower, bound by the Credit Regulator • Facilitators generate revenue by charging borrowers a fixed transaction fee, and lenders a service fee • Benefits to this model includes – Provides an alternative lending source for borrowers and investment mechanism for lenders/ investors from traditional financial institutions – The return to lenders and rate to borrowers is better because there is no margin charged, only a fee by the facilitators Page 24 Radical Ideas | Practical Implementation
  • 25. Key thoughts • Headquarters: San Francisco, California • Re-launched: 2009 • Rate model: Pre-set interest rate based on credit scoring • Revenue: Loan origination Prosper Overview • One of the most well-known P2P lenders in the market • Leverages the power of the community to facilitates lending transactions between lenders and borrowers through their web platform • Prosper administers the lending process including payments, collection and interest back to investors fee & investors annual service fee • Changed its business model in December 2010 from auction-style model to pre-set • Loan type: Unsecured & • Also provides a second market offering for Note Trading, in cooperation with CoFolio secured personal loan • Funding volume to date: rates on loans based on borrowers credit-risk Investing $300 million • ROI: 10.56% (2012) • Loan types: – Debt consolidation – Home improvement – Short-term bridge loans – Auto & vehicle loans – Baby & adoption loans – Engagement ring loans – Wedding loans – Green loans – Military loans Page 25 Radical Ideas | Practical Implementation
  • 26. Key thoughts • Headquarters: San Francisco, California • Launched: 2007 • Rate model: Pre-set interest rate based on credit scoring • Revenue: Loan origination fee & investors annual service fee • Loan type: Unsecured & secured personal loan LendingClub Overview • Allows registered members to directly invest in and borrow from each other • Its primary aim is to offer better rates to borrowers and better returns to investors • Individuals and institutions may be lenders • Works with various partners to administer the process, including collection agencies • Also provides a second market offering for Note Trading to investors through Foliofn, where investors may sell their loan investment to other investors • Platform also allows investors to build a portfolio of Notes based on their investment criteria • Funding volume to date: $737,679,250 • Interest paid to investors to date: $63,283,021 • Loan types: – Consolidate debt – Payoff credit card – Car and vehicle – Home improvement – Business loans – Special events – Green loans – Pool loans Page 26 Radical Ideas | Practical Implementation
  • 27. Key thoughts • Headquarters: Johannesburg, South Africa • Launched: 2012 • Founders: Sean Emery & Hannes van der Merwe • Rate model: Auction model where investors bid on listed loans • Revenue: Loan origination fee & investors annual service fee • Loan type: Unsecured & secured personal loan RainFin Overview • RainFin connects South African individual borrowers with potential lenders through their online platform • It aims to offer lower interest rates to borrowers and better interest rates to lenders • Inspired by stokvel model which is an off-line model of the peer-to-peer lending model • Individual lender may invest from R100 to R500,000 • RainFin uses the auction business model where investors bid on the listed loan • Borrowers specify the loan amount, the rate they would be willing to pay and the loan duration they prefer • RainFin screens all borrowers through affordability, FICA and credit worthiness checks Page 27 Radical Ideas | Practical Implementation
  • 28. Key thoughts • Headquarters: London, England, UK • Launched: 2005 • Number of employees: 28 • Rate model: Interest rate based on credit scoring • Revenue: Borrowers fee & 1% annual lenders fee • Loan type: Unsecured • Turnover: 2011 – £2.2 million • Profit: 2011 – £26,143 • Funding volume to date: Zopa Overview • Zopa was founded in the UK and was the first P2P company in the world • Zopa stands for ‘zone of possible agreements’; a negotiating term identifying the bounds within which agreement can be reached between two parties • Borrowers are charged a borrowing fee on the loan approved, which is added to the loan amount • Lenders are charged a 1% annual lender fee on the amount they lend • Lenders and borrowers are anonymous, unlike crowdfunding platforms such as Kickstarter • Only individuals may lend money • To reduce any risk, lenders only lend small chunks to individual borrowers. The amount lent to any one borrower is automatically set to £10, meaning a loanbook of £2000 will be split across 200 borrowers. Approximately £185 million Page 28 Radical Ideas | Practical Implementation
  • 29. Key thoughts • Headquarters: California, United States • Founded: 2012 • Rate model: Pre-set interest rate based on borrower’s financial history • Revenue: Loan origination fee (including late and unsuccessful payment fees) & investors annual service fee • Loan type: Unsecured personal loan • ROI: 9%-10% • Loan types: Daric Overview • Daric received an investment injection for its operations from Goldcrest Investments in early 2012 • Will approaches their lending offering from a user experience perspective • Offers different maximum loan amounts to individuals and businesses where the company will look at the borrowers’ “positives” such as their income and cash flow statements as well as their ability to repay the acquired loan-which creates the borrower’s “good financial history” • Borrowers are able to load their bank account(s) to their online profiles and upon receiving the loan- the funds are then automatically deposited in the borrowers account • Loans are broken down into different parts “grades” to easily place borrowers: their financial history and the amount borrowing affect their placements and Annual Percentage Rate (APR) that is to be repaid – Consolidate debt – For general purchases Page 29 Radical Ideas | Practical Implementation
  • 30. Crowdfunding Radical Ideas | Practical Implementation
  • 31. Overview of our Crowdfunding model • The Crowdfunding market is changing at an exponential rate. Our research aims to capture the key competitors and models that are enabling this social phenomenon at a particular static point in time. We expect these landscapes to be constantly changing • The following model looks only at the various funding options available to individuals looking to crowdsource funds for business or project purposes, not p2p lending • This approach is used for raising capital for new projects and businesses by soliciting contributions from the public, through an online Crowdfunding Platform • Based on three models – Receivable/ Crowdfactoring – Equity/ Crowdinvesting – Debt/ Crowdlending • The funding is then further split by the target market that the funds are intended for: – Startups or projects – Small Micro and Medium sized organisations (SMMEs) – Niche industries Receivable Startups SMMEs Niche industries Debt Page 31 Equity Radical Ideas | Practical Implementation
  • 32. Geographic spread of evaluated Crowd Funding Platforms 1 14 14 3 26 12 1 1 8 Page 32 1 Radical Ideas | Practical Implementation
  • 33. Geographic spread of African Crowdfunding platforms reviewed 1 8 Page 33 6 2 Radical Ideas | Practical Implementation
  • 34. Crowdfunding Platform Positions Startups SMMEs Niche Recievable Crowdfactoring Debt Crowdlending Equity Crowdinvesting Radical Ideas | Practical Implementation
  • 35. Crowd funding options in the new economy Level of Capita Investment Required Crowdinvesting Crowdlending Crowdfactoring Project / Idea Development Business Development Pre-Listing / Advanced Support Post Public Offering Radical Ideas | Practical Implementation
  • 36. Level of Community Interaction Relative positions of key players Level of Business Support Radical Ideas | Practical Implementation
  • 37. Crowdfunding options in the new economy Level of Capita Investment Required Crowdinvesting Crowdlending Crowdfactoring Project / Idea Development Business Development Pre-Listing / Post Public Advanced Support Ideas | Practical Implementation Offering Radical
  • 38. South African funding platform user experience comparison Registration process The registration process failed when the site failed to send me a confirmation email but the process is very detailed with questions around previous investment activity. Long registration process with multiple setting around who can view which information on your investment profile. No investment screen questions. An “Error Loading Feed Data” messages keeps appearing. No communication on confirmation email being sent and once I followed the confirmation email I still couldn't log in. No Registration process, simply log in with a social network account, either Google plus or facebook. Very easy but with no investment screening. 1 3 5 After initial registration we have reviewed the site again which is now “Under review”. The site is setup to mimic that of facebook with a very similar profile management concept and you can ‘friend’ other investors. 8 out of 27 projects have been fully funded with others showing little or no funding. 1 6 1 No real logical flow to the website and investment opportunities can only be viewed once someone is registered. Investments were listed but no detail is provided without clicking through. 1 6 8 Projects in total on the platform with no view as to any success stories. Very limited funding activity is visible on the platform. 5 10 Bad Page 38 Site experience Good Radical Ideas | Practical Implementation
  • 39. South African funding platform user experience comparison Registration process Registration is only available to entrepreneurs and not at all for investors. AngelHub makes use of various other funding platforms such as gust to identify opportunities. There is no registration process, cant really be considered a Crowdfunding option but has a variety of services that are aimed at providing investment opportunities Corculture already has a defined list of investors which doesn’t really make it a crowd based platform but entrepreneurs can register and apply for funding. 1 2 1 2 Only informational site, and even the information is very high level with no real depth as to what the opportunities are. Informational site, complex, difficult to navigate and no clear direction. Informational site that has no investment opportunities listed. Merely used as a way to make people aware of their offering. 10 Bad Page 39 Site experience Good Radical Ideas | Practical Implementation 3 2 2
  • 40. Investment / Crowdfunding Radical Ideas | Practical Implementation
  • 41. Key thoughts • Headquarters: Venice, California, US • Launched: 2011 • Classification: Equity/ Crowdinvesting & Recievable Crowdfactoring • Target: SMMEs • Field of expertise: Creating multiple networks of investors and service providers • Notable: A nuanced understanding of the diverse disciplines within the online investment market including Entrepreneur Ecosystem Development, Early Stage Finance, Securities Law, and Online Services Crowdfunder.com Differentiator • Online and offline accelerator for local entrepreneurial ecosystems that connects businesses to top entrepreneurs and investors in similar areas through online challenges & live pitch events. The approach looks to get service providers involved in the “Ecosystem” of services Overview • Emphasis is placed on the local community and the relevance of a specific project to that community • They are driven by the need to create globally connected local entrepreneurial ecosystems that serve as the foundation for development and innovation • There is a concept called CROWDFUNDx which is a powerful online + offline accelerator for local entrepreneurial ecosystems. Through a proven process, CROWDFUNDx opens up access to capital for local startups and small businesses through a free and open online-to-offline community engagement model, powered by Crowdfunder’s global social network Page 41 Radical Ideas | Practical Implementation
  • 42. Key thoughts • Headquarters: Johannesburg, South Africa • Launched: 2011 • Classification: Equity/ Corculture Differentiator • Entrepreneurs in search of funding need to complete an online application form that is available on Corculture’s website. The company will assess the application and if the idea is compelling enough, it will be approved for listing on their website Crowdinvesting • Target: SMMEs • Field of expertise: A team of high net work individuals with business experience have the opportunity to advice new companies and invest in their potential future • Notable: They only have about 20 investors who range from angel investors who are willing to invest R500 000 to individual investors with deep pockets, amongst them wealthy SA businessmen, with the capacity to invest R50m Overview • Corculture charges 5% of the value of the deal (the amount of money that was successfully raised for the entrepreneur • Corculture is privileged to have a group of private investment funders who rank amongst some of the wealthiest individuals in South Africa • They facilitate entrepreneurs at various business stages to become investor-ready • The website doesn’t play a role other than an introduction and general information, opportunities are not listed, NDAs need to be signed by all parties for a deal to commence Page 42 Radical Ideas | Practical Implementation
  • 43. Key thoughts • Headquarters: Johannesburg, South Africa • Launched: 2008 • Classification: Equity/ Crowdinvesting • Target: SMMEs • Field of expertise: Identifting opportunities for investors who are looking to ‘Buy’ BEE points • Notable: They have positioned Enterprise development as the key pillar in the BEE scorecard and assist companies to make better investment decisions Edge Growth Differentiator • Enterprise Development is growing small and medium sized businesses by providing finance and support services that would assist them in becoming more competitive and overcoming the constraints to growth that they face Overview • Edge Growth has worked with clients in a variety of industries and projects; ranging from ED strategy and programme design, enterprise development opportunity assessments to training consultants on how to select good businesses to invest in. Below is a summary of a number of our clients • The website is used purely as an informational tool with no opportunities explicitly listed on the website, this is in contradiction to traditional funding platforms Page 43 Radical Ideas | Practical Implementation
  • 44. Key thoughts • Headquarters: New York, USA • Launched: 2004 • Classification: Equity/ Crowdinvesting • Target: Startups • Field of expertise: Leverage the world's most complete investor database to find appropriate investors for your business according to location, industry interest and other relevant criteria Gust Differentiator • Gust enables skilled entrepreneurs to collaborate with the smartest investors by virtually supporting all aspects of the investment relationship, from initial pitch to successful exit Overview • Gust is endorsed by the world's leading business angel and venture capital associations, and powers over 1,000 investment organizations in 65 countries • Company profile presents all the information investors need to know in a professional way and facilitates the way in which entrepreneurs can reach many different investors • Entrepreneurs are guided throughout the process to ensure they manage each aspect of a successful venture • Notable: More than 160,000 start-ups have already used the platform to connect and collaborate with over 40,000 individual accredited investors • Over 1,800 startups funded in the last 12 months Page 44 Radical Ideas | Practical Implementation
  • 45. Key thoughts • Headquarters: Cape Town, South Africa • Launched: 2011 • Classification: Equity/ Crowdinvesting • Target: Startups • Field of expertise: The focus is on the investor and how they can improve their portfolio through well qualified opportunities • Notable: Investment Size: R1m-R10m AngelHub Differentiator • AngelHub is a Business Angel Investment Group that pools funding, expertise & networks from a diverse range of early-stage Angel Investors for investment in highgrowth South African ventures to accelerate growth & create value • AngelHub Use Gust and other platforms to identify opportunities beyond startups approaching them Overview • The website used by AngelHub does not facilitate an online investing experience but rather facilitates the meeting of investors and “NDA” type, private sharing of investment opportunities • Investors can form an angel group, which are individual angels joining with other angels to invest collectively in entrepreneurial firms • Investment Length: 3-7 years • Geography: Johannesburg and Cape Town (initially) • Investment Stage: Early- stage or expansion phases Page 45 Radical Ideas | Practical Implementation
  • 46. Key thoughts • Headquarters: United States of America, New York city • Launched: July, 2012 • Classification: Equity/ Crowdinvesting • Target: Startups/ SMMEs • Field of expertise: First Line's focus is implementation of earlystage public strategies for a diverse range of hi-tech companies internationally IPO Village Differentiator • IPOvillage.com is dedicated to crowdfunding initial public offerings (IPOs) Overview • Given the monumental advances in online social media networking capabilities, lucrative pre-IPO investment opportunities can now be made directly available to the general public • IPO Village's debut IPO will be on behalf of a First Line Capital portfolio company • First Line's portfolio companies are all publicly traded. Therefore, public offerings provide shareholders with liquidity and a clear exit strategy • Notable: Founded in 1995, First Line Capital is a boutique investment banking firm Page 46 Radical Ideas | Practical Implementation
  • 47. Key thoughts • Headquarters: Australia, ROBINA • Launched: March, 2006 • Classification: Equity/ Crowdinvesting • Target: Startups/ SMMEs • Field of expertise: Multiple support models • Notable: $120,015,443 raised to date. Over 200 companies have been assisted. Listings have gone on to worldwide stock exchanges like the AIMS London Stock Exchange, Frankfurt, Toronto and the Australian ASX ASSOB Differentiator • ASSOB has a large, diverse and committed community of stakeholders who work together to support Funders in every possible way • Overview • ASSOB assists small and medium sized business to sell equity (shares/stocks) in their business to friends, family, fans and followers of the business in a compliant and proven manner • Businesses profiled on the platform usually raise between $600,000 and $1.2 million for each raising. some companies have achieved several raisings • ASSOB is an interactive platform that connects quality private, unlisted and pre-IPO companies with investors and supporters of a company who want to engage financially Page 47 Radical Ideas | Practical Implementation
  • 48. Key thoughts • Headquarters: United States of America, Miami, FL • Launched: November, 2011 • Classification: Equity/ Crowdinvesting • Target: Startups/ SMMEs • Field of expertise: Multiple support models • Notable: Named the #1 Equity Based Crowdfunding Platform by Worth Magazine EarlyShares Differentiator • EarlyShares has a Crowdfunding support services including access to an ‘expert’ lounge, resources and ‘university’ which is a free service designed to help investors and business owners take full advantage of social based funding Overview • EarlyShares securely connects high-potential entrepreneurs seeking funding with investors looking for quality investments in early-stage companies, with minimum investment amounts as low as $100 • In addition to allowing new ideas to get funded, the EarlyShares platform allows existing busi • Businesses can provide investors with ongoing status updates, newsletters and reports; and businesses can receive investor feedback and support thanks to the EarlyShares communication portal Page 48 Radical Ideas | Practical Implementation
  • 49. Key thoughts • Headquarters: United States of America • Launched: January 2010 • Classification: Equity/ Crowdinvesting • Target: Niche • Field of expertise: mobile apps, Facebook apps, social apps, websites, social networking, social media, healthcare and medical technology, high tech sciences, and energy and solar technology • Notable: Companies can Startup Valley Differentiator • StartupValley is a crowdfunding portal that allows technology startups and businesses to register and pitch their company or product to the crowd • The Platform has a strong portfolio management component with the ability to ‘follow’ companies Overview • StartupValley is an equity-based crowdfunding portal that allows tech startups and business to raise early-stage capital in exchange for equity ownership in their company • Businesses can post their company, pitch their product, and raise funds for the development of their next big tech idea • All investors and non-accredited investors will be given a related equity ownership in the company for their investment amount, as determined by the owners of the business. upload a comprehensive pitch with supporting documents • Various regulatory concerns have seen little activity on the platform Page 49 Radical Ideas | Practical Implementation
  • 50. Key thoughts AngelList • Headquarters: South Differentiator • Launched: January 2010 • Classification: Equity/ Trending is based on indications of interest from candidates, investors and customers. In other words, when a lot of high-quality candidates, investors or customers say they want to meet your startup, in a short period of time, you “trend”. This improves your chance of success on the platform Beach - San Francisco, California Crowdinvesting • Target: Startups • Field of expertise: Investment and startup recruiting • Notable: Over 1500 Overview • AngelList's Invest Online feature lets accredited investors put small amounts of money into startups • Startups still cannot publicly announce that they are raising money; only accredited investors can see which companies are raising money online startups have used AngelList to raise money. And startups that have raised money on AngelList have gone on to raise over $1.6 billion in subsequent rounds Page 50 Radical Ideas | Practical Implementation
  • 51. Key thoughts • Headquarters: California, United States of America • Launched: August, 2012 • Classification: Equity/ Crowdinvesting • Target: Niche • Field of expertise: Highly specialised in Healthcare Healthfundr Differentiator Healthfundr allows accredited investors to easily get to know and invest in early- to growth-stage, health and medtech companies Overview • The companies listed on Healthfundr have undergone a rigorous screening and due diligence process • Healthfundr lets investors easily explore and get to know the most promising companies. Once an investor knows the business, they do everything else to complete the investment, including arranging meetings and providing additional information Page 51 Radical Ideas | Practical Implementation
  • 52. Key thoughts • Headquarters: United Kingdom, Exeter • Launched: January, 2010 • Classification: Equity/ Crowdinvesting • Target: Startups/ SMMEs • Field of expertise: Equity based financing and capital access • Notable: ₤8,708,000 total CrowdCube Differentiator Business owners often relish the help and support of an extended community of stakeholders and investors can offer their services to new businesses Overview • CrowdCube aims to give entrepreneurs the opportunity to take control of raising funding from their own network of friends, family, customers and strangers • It is a new way to fund start-ups and business expansion by crowdfunding for equity, giving entrepreneurs a platform to connect with ordinary people and raise venture capital amount successfully funded 36,157 Registered investors Page 52 Radical Ideas | Practical Implementation
  • 53. Key thoughts FundersClub • Headquarters: San Differentiator • Classification: Equity/ FundersClub startups benefit from the experience, advice, and connections of a vast army of high-net-worth, highly-connected, and highly-experienced professionals with a vested financial and personal interest in helping the companies succeed • Target: Startups • Field of expertise: Active Overview Francisco, California Crowdinvesting members of FundersClub include top employees at corporations such as Amazon, Apple, AT&T, Bank of America, CNN, Dell, eBay, Electronic Arts, Facebook, Goldman Sachs, Google, Groupon, Intel, Intuit, LinkedIn, Logitech, McKinsey & Company, Microsoft, Pixar • FundersClub is a new type of venture capital platform, built around a unique online marketplace that allows accredited investors to become equity holders in FundersClub • The platform combines industry-standard venture funds, with an easy-to-use webplatform that allows members to browse and screen fund investment opportunities, view investment profiles and sign legal documents • Notable: Over $5,011,221 invested by FundersClub. • Over $41,090,213 invested in FundersClub companies Page 53 Radical Ideas | Practical Implementation
  • 54. Key thoughts • Headquarters: Stellenbosch, South Africa • Launched: November, 2012 Crowdinvest Differentiator Potential investors can view, share, LIKE, or invest Overview • Classification: Equity/ • People come together and invest modest amounts in a specific high value investment • Target: Startups/ SMMEs • Field of expertise: They • The crowdinvest business model is similar to the successful “stokvels” or cooperatives Crowdinvesting will validate the various opportunities and allow individuals to invest from as little as R1 across various fields opportunity that have been around for decades • We are the first crowd sourced investment platform in the world offering investment opportunities in a range of different sectors: Business, Property, Fixed assets and Creative & Media • Businesses, such as a new e-commerce start-up • Creative projects like the new clothing range of an upcoming clothing designer • Property for example a tenanted office building or • Fixed assets like a 1965 Aston Martin DB5 • Notable: Crowdinvest is the first crowd sourced investing platform in South Africa Page 54 Radical Ideas | Practical Implementation
  • 55. Key thoughts EquityNet • Headquarters: United Differentiator • Launched: December, EquityNet's patented business plan software and Enterprise Analyzer™ technology enables entrepreneurs to analyse and optimise their business plan before they engage investors via the EquityNet funding network States of America, Fayetteville, Arkansas 2005 • Classification: Equity/ Crowdinvesting • Target: Startups/ SMMEs • Field of expertise: Various partnership with key service providers alows equitynet to offer a variety of additional services EquityNet is the only patented crowdfunding platform in the world Overview • Angel investors and business supporters use EquityNet's advanced technology to efficiently screen and analyse businesses to fund and support entrepreneurs • Investors get a standardised view of analysing opportunities with free access • Entrepreneurs select from 3 paid models with varying levels of assistance in developing the business plan from EquityNet, Basic, Plus and Premium • Notable: 12,000 individual investors with $207,460,600 in funds raised Page 55 Radical Ideas | Practical Implementation
  • 56. Key thoughts • Headquarters: London, United Kingdom • Launched: January, 2010 • Classification: Equity/ Crowdinvesting • Target: Startups • Field of expertise: Equity based financing and capital access • Notable: Access capital from a wide range of investors. • Benefit from a seamless fundraising process. Seedrs Differentiator The Seed Enterprise Investment Scheme (SEIS) provides massive tax reliefs to individual investors who purchase new shares in very early-stage companies. Borrowers have access to mentors Overview • Seedrs is an online platform for investing seed capital • Investors invest money in startups in exchange for a portion of their equity, meaning that you buy shares in the business • If a business you've invested in succeeds, the shares you own will become worth more than you paid for • If you like a startup you see, you can invest between £10 and the full amount the business is seeking • Connect with a strong network • Access to Mentors Page 56 Radical Ideas | Practical Implementation
  • 57. Key thoughts • Headquarters: California, United States of America RealtyMogul Differentiator Crowdfunding for real estate • Launched: August, 2012 • Classification: Equity/ Overview • Target: Niche • Field of expertise: Real • Insider access to pre-vetted real estate investments • Pool money with like-minded investors to make investments that are otherwise difficult Crowdinvesting estate and property investing • Notable: Each real estate • Realty Mogul is a marketplace for accredited investors to pool money online and make direct investments into local real estate to access • Real estate companies are provided with vetted investors investment is tied to a real estate company that deals with the hassles Page 57 Radical Ideas | Practical Implementation
  • 58. Key thoughts • Headquarters: United States of America, Columbus, Ohio • Launched: 2012/05/22 • Employees: 20 • Classification: Recievable/ Crowdfactoring & Equity/ Crowdinvesting • Target: Startups • Field of expertise: – Entrepreneurs – Start-up businesses • Notable: Fundable is an excellent option for businesses of all sizes from a successful goal of $3000 for an organic skincare line to a successful goal of $900,000 for a mobile app, this is a crowdfunding site created by entrepreneurs for entrepreneurs Fundable Differentiator The company will also enable startups to offer either rewards of equity in return for investments Overview • Fundable makes use of a Crowdfunding platform that connects entrepreneurs and commercial start-up businesses with potential funders • The business owner must reach or exceed its funding target set in order to receive funds pledged by funders • Aims to assist business owner raise money to build products or reach business goals • Funders may also provide personal assistance to the business instead of cash Page 58 Radical Ideas | Practical Implementation
  • 59. Key thoughts • Headquarters: USA • Launched: 2009 • Employee composition: Management team, and advisory members • Fees: US$50 per month to list on CoFolio platform Cofolio Differentiator • Cofolio aims to connect small business owners looking for expansion capital with local investors, allowing anyone to build their own community portfolio Overview • Business owner creates a Cofolio profile including reason for funding, amount requested, and other general information • Classification: Equity/ • Business opportunity is marketed to local community investors and once requested • Target: SMMEs • Field of expertise: • Makes use of a equity or debt model for investors Crowdinvesting funds have been raised, Cofolio approved lawyers finalise the prospectus terms – Small to medium sized enterprises – Start-up businesses • Notable: Cofolio allows your business to raise any amount of capital, although our recommended funding range is from $250,000 – $1,000,000 Page 59 Radical Ideas | Practical Implementation
  • 60. Key thoughts • Headquarters: San Bruno, CA • Launched: 2009 • Classification: Equity/ Crowdinvesting • Target: Startups/ SMMEs • Registered users: Total of 77 000 buyers, bulletin boards and brokers • Fees: US$34 pm for Sharespost Overview • Sharespost is an online platform that connects investors; from buyers, sellers and brokers with late-stage venture-backed companies and their shareholders • Sharespost provides the information, tools and assistance investors need to close transactions • To a degree, Sharespost offers the services of a traditional exchange, for private companies • The online platform also facilitates transactions between shareholders and potential investors, i.e. secondary transactions investors and companies listing on the platform • Investor type: Must be “Accredited or sophisticated“ investor under US SEC Regulations • Field of expertise: – Companies with a valuation of more than US$100 million – Companies with US$10 million or more – In business for 5 years or more – Only vested shares with pre-public companies can be traded – To trade, shares must be Page held for at60 least a year Radical Ideas | Practical Implementation
  • 61. Key thoughts • Headquarters: New York, United States • Launched: 2004 • Classification: Equity/ Crowdinvesting • Target: Startups/ SMMEs • Number of projects: Secondmarket has bought together more than 100 000 individuals and institutions and completed billions of dollars in alternative investment transactions Secondmarket Overview • Similarly to Sharespost, Secondmarket works with companies, buyer and sellers to create markets for alternative assets • Users can create investment identities and build their own investor network • Secondmarket also offers bank stock, fixed income and bankruptcy claims services • Secondmarket is a registered broker-dealer and member of FINRA, MSRB and SIPC and a registered alternative trading system (ATS) for private company stock • Field of expertise: Marketplace Illiquid Assets Financial Services Hedge Fund Venture Capital Private Equity Auction-Rate Securities Bankruptcy Claims Private Company Stock Private Community Bank Stock • Restricted Securities • Block Trades. CDO • • • • • • • • • • Page 61 Radical Ideas | Practical Implementation
  • 62. Key thoughts • Headquarters: Netherlands, Utrecht • Launched: 2011 • Classification: Equity/ Crowdinvesting • Target: Startups/ SMMEs • Incentive: The equity the borrower stands off will come with advice from the investors SymBid Differentiator • Profit from the knowledge of the crowd, use all the tools you need to create and present ideas, interact with all social networks to also activate your own crowd Overview • Symbid enables entrepreneurs to receive equity financing from large groups of people • Symbid will offer a collaborative online environment where believers and entrepreneurs can interact with each other. This crowdsourcing element will enable participating companies to connect with members and tap their knowledge • Symbid offers a Affiliate Program for partners who send users to the Symbid system • Field of expertise: Symbid looks to shape ideas with the help of crowd input and develop sustainable businesses • Notable: First equity-based crowdfunding platform Page 62 Radical Ideas | Practical Implementation
  • 63. Key thoughts Investors Network • Headquarters: South Differentiator • Classification: Equity/ Access to free advice and Legal agreements, a toolbox of key entrepreneurial resources., a 'Help Section' where members can ask for advice, sections to search for entrepreneurial opportunities and strategic alliances • Target: Startups/ SMMEs • Incentive: The equity the Invsestment opportunities can only be viewed once the investor has been approved Africa Crowdinvesting borrower stands off will come with advice from the investors • Field of expertise: Created to support and develop creative and uniquely South African Ideas Overview • The business provides both face-to-face networking meetings in Johannesburg, Cape Town, Durban, Bloemfontein and Port Elizabeth as well as on-line networking • Entrepreneurs seeking funding and growth, Investors seeking opportunities and Business Professionals seeking visibility facilities • Registration is free for investors but is subject to approval • Notable: Priority invites to Networking events Page 63 Radical Ideas | Practical Implementation
  • 64. Debt / Crowdlending Radical Ideas | Practical Implementation
  • 65. Key thoughts • Headquarters: United States of America • Launched: January, 2008 • Classification: Debt/ Crowdlending • Target: Startups/ Projects • Field of expertise: Social media and analytics. Stats show our system generates over 300% more social media exposure compared with regular Facebook sharing FundRazr Differentiator • advanced social media technology helps our customers’ campaigns rise above the noise on Facebook and Twitter. Overview • Campaigns are seen by more potential contributors and, as a result, raise more money • FundRazr can be used to fund just about any type of project or cause, examples include funding medical expenses, memorials, accident recovery, pet care, natural disaster relief, charitable causes or entrepreneurial projects • Anyone can use FundRazr to Crowdfund Anything. Anywhere. • Notable: raised over $21,000,000 for over 36,000 campaigns in 18 different countries Page 65 Radical Ideas | Practical Implementation
  • 66. Key thoughts • Headquarters: United States of America, Denver, Colorado • Launched: November, 2012 • Classification: Debt/ Crowdlending • Target: SMMEs • Field of expertise: Quantifying and qualifying investment opportunities P2Bi Differentiator Reimagining business lending to give companies better cash flow and access to cash for day to day operational requirements Overview • The business (our client) sells its invoices to P2Binvestor • P2Binvestor (P2Bi) purchases the invoices, puts them up on our website and manages underwriting and collections • The debtor receives goods and services from our client and is responsible to pay P2Binvestor • The investor buys into a portfolio of client invoices Page 66 Radical Ideas | Practical Implementation
  • 67. Key thoughts • Headquarters: London, United Kingdom • Launched: February 2011 • Classification: Debt/ Crowdlending • Target: SMMEs • Field of expertise: MarketInvoice is a revolutionary new way for SMEs to access the capital locked in their long-dated invoices MarketInvoice Differentiator The advance will be paid into your bank account within 24 hours Overview • Apply to MarketInvoice to raise finance against the invoices of one or more of your large end customers • Professional investors advance you cash. A wide range of funders means sellers always get a good deal, and that invoices are sold quickly • When your customer pays your invoice, you refund the advance plus fees, with any remainder forwarded to you • Notable: £50,981,500 advances so far Page 67 Radical Ideas | Practical Implementation
  • 68. Key thoughts • Headquarters: Cincinnati, Ohio, United States of America • Launched: August, 2011 • Classification: Debt/ Crowdlending • Target: Niche • Field of expertise: SoMoLend automates, speeds and simplifies the steps for loan application, review, funding progress reporting, communications between borrower and lenders, and payments. We utilize best practices to help our borrowers develop and market their campaigns SoMoLend Differentiator SoMoLends technology platform uses a GPS location tracking system (think foursquare) so that investors can view a map of business borrowers in their community Overview • SoMoLend is a Web-based lending platform that uses patent-pending technology to connect small business borrowers with individual and organizational investors (lenders), executed within a hyper-localizedgeographic scope • SoMoLend's user-friendly technology allows small business borrowers to obtain loans from friends, family, customers, community supporters and interested organizations as well as from Facebook, Twitter, and LinkedIn connections • Notable: Typically with 15 or fewer employees who need commercial loans ranging from $100 to $1 million Page 68 Radical Ideas | Practical Implementation
  • 69. Key thoughts • Headquarters: US • Launched: September 2012 • Classification: Crowdfunding/ Debt & Recievable/ Crowdfactoring • Target: SMMEs • Incentive: Investors receive a return on their investment for a set period of time Bolstr Differentiator Attorneys can sign up as service providers on bolstr Overview • Bolstr was founded to provide Small Businesses with a simple fundraising tool that enables them to transform their network and community into a team of investors, and supporters • Bolstr democratizes, and simplifies the process of raising money through a private offering • Field of expertise: Small Businesses can effectively leverage their network and community to raise the money needed to operate and expand Page 69 Radical Ideas | Practical Implementation
  • 70. Key thoughts • Headquarters: California, United States of America Mosaic Differentiator Mosaic connects investors to solar projects in need of financing • Launched: April, 2011 • Classification: Overview • Target: Niche • Field of expertise: • As the project earns revenue, investors are paid back with interest • The fundamentals of solar makes it an attractive component of a diversified investment Crowdfunding/ Debt Investing in renewable energy, specifically solar energy • Each investment you make is represented by a Mosaic Note. The note is a written promise to pay a specific sum of money over a fixed term portfolio: reliable technology, predictable energy output, and stable cash flows • Notable: Over $2.1 million has been invested through Mosaic and investors have received 100% on-time repayments Page 70 Radical Ideas | Practical Implementation
  • 71. Key thoughts SunFunder • Headquarters: San Differentiator • Employee composition: Investors earn back their principal investment plus intrest-based "Impact Points" to reinvest in another project of their choice Francisco, CA Management team, and advisory members Overview • Revenue: A percentage of • SunFunder uses its platform to connect investors who want to invest in solar energy • Classification: Debt/ • Relies on a partnership model with solar energy business around the world that provide funds raised Crowdlending • Target: Niche • Incentive: Capital repayments and ImpactPoints the equivalent of US$1 projects with companies that require affordable capital solar energy solutions to communities • Funding target set has to be reached before the company can receive the funding • The funding is in the form of a loan and investors receive capital repayments over the lifespan of the finance period • Field of expertise: – Solar energy companies Page 71 Radical Ideas | Practical Implementation
  • 72. Key thoughts • Headquarters: Serling, Virginia, USA • Launched: 2009/10/01 • Classification: Crowdfunding/ Debt products • Target: Startups & SMMEs • Incentive:The average Zidisha borrower pays less than 10% in annual interest and fees • Field of expertise: Zidisha's lending model breaks new ground by using person-to-person lending to dramatically lower the costs of microfinance for lowincome entrepreneurs in developing countries Zidisha Differentiator • It is the world's first direct peer-to-peer microlending service to link borrowers and lenders without intermediaries Overview • Zidisha is a non-profit peer-to-peer microfinance internet platform that allows people to lend • Members can fund loans for as little as a dollar, which the borrowers then use to develop business activities • Lender participants have the opportunity to bid to finance all or a portion of the loan at a proposed interest rate • Zidisha facilitates for the direct communication between its members (innovative in this space) • Loans Raised: $1,080,414 Page 72 Radical Ideas | Practical Implementation
  • 73. Key thoughts • Headquarters: England, UK • Launched: January 2011 • Classification: Crowdfunding/ Debt products • Target: SMMEs • Incentive: The Average interest rate earned by Lenders: 10.79% • Field of expertise: Intended to meet the needs of anyone managing an investment portfolio (including individuals, pension fund managers and companies with cash deposits), ThinCats provides direct access to the low risk market sector traditionally occupied by high street banks ThinCats Differentiator • Unique in the way that they always require security and carefully select a small number of relatively large deals. They have a list of Sponsors who work for the borrower in helping to prepare the loan case Overview • Lending members take part in an on-line auction to join a lending syndicate for each loan. At the end of the auction those lenders offering the best interest rates are selected to make up the lending syndicate and get the interest rate they have asked for • The Borrower is then offered a loan at the weighted average of the accepted bids plus 1.5% to cover operating, deal management and monitoring costs • The minimum loan is £1,000 and the maximum is the whole loan. So far the most common bid has been £5,000 but bids of £50,000 are not uncommon • Loans Raised: 126 loans totalling £25.085m Page 73 Radical Ideas | Practical Implementation
  • 74. Key thoughts • Headquarters: London • Employee composition: Management team, and advisory members • Classification: Debt/ Crowdlending & Equity/ Crowdinvesting • Target: Niche • Incentive: Cash based on project revenue; receive early investor bonus • Field of expertise: – Renewable energy companies/ projects • Notable: Its first project, launched in July 2012, raised £1.4m to fund a community-scale wind turbine Abundance Generation Differentiator provides retail investors with the opportunity to invest their money directly into renewable energy projects in the UK and get a regular cash return based on the energy produced Overview • Abundance aims to link communities with individuals with Renewable Energy projects • Companies or project owners offer debentures to potential investors • Abundance then assists in structuring the debentures and to market and distribute them to registered interested investors • The debentures, structured over a 20-25 year term, offer investors long-term, low risk and predictable investment opportunity • Abundance platform also offers debenture holders the opportunity to sell their debentures to other interested investors Page 74 Radical Ideas | Practical Implementation
  • 75. Key thoughts Funding Circle • Headquarters: United Differentiator • Launched: August 2010 • Classification: Directly connects people who want to invest money with vetted, established businesses who want to borrow money. Accessing you money back is as simple as selling your loans onto other investors. On average it takes just 30 mins to sell a loan Kingdom, London Crowdfunding/ Debt products • Target: SMMEs • Incentive: Funding Circle investors are earning 6.2%* average net return (after fees and bad debt) Overview • Funding Circle is an online marketplace where people can lend directly to small businesses in the UK, eliminating the high cost and complexity of banks • At Funding Circle, people get higher, more stable returns for the long term, and businesses get lower cost finance to expand and develop. It is a simple idea and an easy to use website, whose creators hope will make a big impact • Field of expertise: Funding Circle is backed by Index Ventures, Union Square Ventures and a series of prominent Angel investors including Alan Morgan • 2012 Business Moneyfacts awards for Best Alternative Funding Provider • Loans funded to date: £107,629,660 Page 75 Radical Ideas | Practical Implementation
  • 76. Key thoughts • Headquarters: Leeds, England, UK • Launched: 2011 • Classification: Crowdfunding/ Debt products • Target: SMMEs • Incentive: Offer to lend at an average return of between 7 and 15.5 per cent gross • Field of expertise: They offer a Crowdfunding – Adviser Survey Rebuilding Society Differentiator They have opportunities for “Introducers” for individuals who refer a business to them and they complete a loan, Introducers receive an introducer fee of 1.5% of the loan Users earn Trust Points for positive behaviour in the community. The higher the score, the more valuable the user is to the community. Overview • One of the first 6 platforms globally that has gained market traction for Peer to business lending • Investors can subscribe to parts of the loan after assessing the business's information, committing an amount of their choice, with an interest rate of their choice • The platform also operates a 'second hand' loan market, where lenders buy and sell active loans • First Loan: Feb 2013 Page 76 Radical Ideas | Practical Implementation
  • 77. Key thoughts • Headquarters: Shanghai, China • Launched: 2012 • Classification: Crowdfunding/ Debt products • Target: SMMEs • Incentive: rates varying SinoLending Differentiator • Lenders have the option to use an automated tool to lend to a pool of borrowers to achieve diversification very easily Overview • SinoLending enables borrowers to create loan listings on its website by supplying details about themselves and the loans that they would like to request • SinoLending focuses on small-and-medium enterprises (SMEs) from 9.49% to 23.99% • Field of expertise: SinoLending understands east Asian people's unique preference for savings and against consumptio Page 77 Radical Ideas | Practical Implementation
  • 78. Key thoughts • Headquarters: Stockport, United Kingdom • Launched: 1999 • Rate model: Pre-set interest rate based on credit scoring • Revenue: Loan origination fee & investors annual service fee, charges on assets assetz CAPITAL Overview • Has two divisions namely assetz SME Capital and assetz Development Capital that offers loans strictly to SME businesses and property development projects respectively • Both divisions share the same systems, however assetz Development Capital has different lending structures causing the two divisions to be separated • The assetz group consists of popular UK property and financial services companies that together have 55 000 (2013) registered private investors • Both lenders and investors are independently reviewed by Grant Thornton where also the lenders monies are managed by Grant Thornton LLP as they are trustees • Loan type: Unsecured and secured personal loan • Funding volume to date: £ 8 978 585 • ROI: 11.8% (2013) • Loan types: – Debt consolidation – Home improvement – Short-term bridge loans – Auto & vehicle loans – Baby & adoption loans – Engagement ring loans – Wedding loans – Green loans – Military loans Page 78 Radical Ideas | Practical Implementation
  • 79. Key thoughts • Headquarters: Tallinn, Estonia • Re-launched: 2008 • Rate model: Pre-set interest rate based on credit scoring • Revenue: Loan origination fee, service based fees i.e. on Ise Pankur account , borrowing, debt collection and resale fees Ise Pankur Overview • Offers lending opportunities for individuals and business to borrow from each other where they are able facilitate the transactions between the users in stable economies i.e. Central, Western and Eastern Europe • In 2010 the company introduced stricter risk management policies to enable their borrowers to earn higher annual returns on their investments • A larger portion of the company’s investors are male with a fairly equal number of female and male borrowers • Loan type: Unsecured personal loan • Funding volume to date: £ 13855404.01 • ROI: 19% (2013) • Loan types: – Debt consolidation – Home improvements and mortgage loans – Start up capital and business expansion – Student loans – Travel loans – Car and vehicle – Other Page 79 consumer loans Radical Ideas | Practical Implementation
  • 80. Key thoughts • Headquarters: London, UK • Re-launched: Unknown • Rate model: Interest rate based on the lowest auction offered • Revenue: Loan origination fee i.e. application, listing and completion fees with no additional fees charged • Loan type: Unsecured personal loan but sometime carrying personal guarantees YouAngel.com Overview • YouAngel.com offers loans to established and credit-worthy businesses such as limited companies, limited liability partnerships, sole traders or other partnerships • They are able to distinguish themselves with their discussion board/forum offering titled Angel Talk discussion forums where businesses with successful loan applications are given the opportunity to submit various reports to potential lenders • Casual users of the Angel Talk discussion forums are not permitted to contribute to these discussions however there are few limitations on the subject matters the lenders can talk about creating a “dragon” atmosphere • In cases where the borrower defaults on payment due, the lender is able to subscribe to a discretionary compensation fund: were the contributions are made by the borrower to compensate the lender • Funding volume to date: Unknown • ROI: ranging from 6%10.5% • Loan types: – Business loans – Business credits Page 80 Radical Ideas | Practical Implementation
  • 81. Key thoughts • Headquarters: Lincoln, UK • Re-launched: Unknown • Rate model: Pre-set interest rate based on credit scoring • Revenue: Loan origination fee • Loan type: Secured business loans • Funding volume to date: Unknown Squirrl.com Overview • Is an online marketplace that brings together lenders called savers to lend to established suppliers, they are called savers-because the saver has direct say on where their funds will go to which supplier and for the fact that they don’t pay any investor service fees • Has a management administration division that looks after Squirrl.com’s business administration, development and security trust work as well as an advisory board division that advises on internal developments and “liaises with the lender community to act in their best interests when conflict of any description arises between lenders and Squirrl.com” • They offer loans to unspecified business borrowers across the UK, were they require the loans to be secured by offering a portfolio contracts as security • ROI: Not specified • Loan types: – Business loans Page 81 Radical Ideas | Practical Implementation
  • 82. Key thoughts • Headquarters: Sittingbourne, UK • Re-launched: Unknown • Rate model: Pre-set interest rate based on credit scoring • Revenue: Loan origination fee • Loan type: Secured Funding Secured Overview • Offers only large secured loan amounts that are to be more or equal to £25,000 to businesses where the interested borrower (the business) will be given direct access to a Funding Secured member to obtain advisory support • The loan amounts are secured by fixed assets with equalling values: collecting collateral in the same way as the banks will do • Borrowers are able to pitch for loans with the desired interest rate, payment length and level of security business loans • Funding volume to date: Unknown • ROI: x < 6% • Loan types: – Business loans Page 82 Radical Ideas | Practical Implementation
  • 83. Receivable / Crowdfactoring Radical Ideas | Practical Implementation
  • 84. Key thoughts • Headquarters: Nairobi, Kenya • Launched: 2011 • Classification: Recievable/ Crowdfactoring • Target: Startups/ Projects • Notable: powers donationbased funding for a wide variety of creative projects • Field of expertise: – Funds can be raised for any type of initiative with emphasis on social development and opportunity creation M-Changa Differentiator The entire model is SMS driven and all traditional activities can be performed using simple basic command key words vie SMS Overview • Once the five minute set-up is completed, M-Changa will invite everyone on your list to contribute to your fundraiser; it tracks their responses and, of course, their contributions. You can withdraw the funds any time • Your fundraiser can run indefinitely so long as a payment or withdrawal is completed once every 14 days. After 14 days your fundraiser will be suspended and you will stop receiving updates. Page 84 Radical Ideas | Practical Implementation
  • 85. Key thoughts RocketHub • Headquarters: United Differentiator • Launched: 2010 • Classification: Recievable/ RocketHub have concepts called FuelPad and LaunchPad programs that help campaign owners and potential promotion and marketing partners connect and collaborate for the success of a campaign. States of America, New York Crowdfactoring • Target: Startups/ Projects • Notable: powers donationbased funding for a wide variety of creative projects • Field of expertise: – International access – Unique, simple crowdfunding education curriculum and tools – Most diverse community art, science, business, and social good Overview • Fuelers and creatives have the chance to unlock badges whenever they complete a task. These badges are designed in such a way that one's deeds and accomplishments for the community are highly recognized. These badges serve as their motivation to do more and create better projects • The site has been designed to work on an open community based concept Page 85 Radical Ideas | Practical Implementation
  • 86. Key thoughts • Headquarters: San Francisco, California • Launched: 2008 • Classification: Recievable/ Crowdfactoring • Target: Startups/ Projects • Notable: IndieGoGo campaigns receive all the money they have been pledged, whether the initial funding goal was reached or not • Field of expertise: – Assist projects and startups to gain exposure and provide additional support based on the amount of effort the individual puts in Indiegogo Differentiator IndieGoGo is available internationally, while Kickstarter requires a U.S.bank account. Non Profit companies can register for reduced fees Overview • Indiegogo helps you spread the word about your campaign with their unique algorithm called the gogofactor • You keep 100% ownership of your campaign and you don't owe us a cent until you raise money • Manage contributions with a dashboard and stay on top of sending off your perks with our dashboard. Track who has claimed perks and how to get in touch with contributors to ensure they receive perks on time • merit-based algorithm that tracks the level of activity of each campaign based on how much you share, update, and attract funding Page 86 Radical Ideas | Practical Implementation
  • 87. Key thoughts CrowdFunder • Headquarters: United Differentiator • Launched: January, 2010 • Classification: Recievable/ They are able to create specific campaigns around a pre defined communities. An example is CrowdfundCornwall Campaign which highlights opportunities from cornwall only Kingdom, Exeter Crowdfactoring • Target: Startups/ Projects • Notable: Various tips and guidelines are provided from both an idea, reward and PR perspective. • Extra effort is provided to Overview • In return for funding a project you’ll get a reward from the project owner. This could be anything from a ‘big thank you’ to a one off tailored reward just for you, both the project owner and backer win • The ‘crowd’ decides what’s good, what’s not, what they want to fund and what they don’t. If the crowd doesn’t back the project it won’t happen. the various initiatives Page 87 Radical Ideas | Practical Implementation
  • 88. Key thoughts • Headquarters: South Africa • Launched: 2013 • Classification: Recievable/ Crowdfactoring • Target: Startups • Notable: There has not been much activity on the platform and the concept has not been well supported by the community FundFind Differentiator It is required by borrowers to engage the people who need your product or solution Overview • FundFind is a new way to fund projects, startups, and innovations in South Africa using the proven method of rewards-based crowdfunding • Define who the project will target most and what they will get for funding the initiative • For each group the borrower will identify, briefly describe how they can help them and offer their product tailored to the funders needs as an incentive Page 88 Radical Ideas | Practical Implementation
  • 89. Key thoughts • Headquarters: United States of America • Launched: January 2010 • Classification: Recievable/ Crowdfactoring • Target: Startups • Field of expertise: Investment and startup recruiting • Notable: Donald trump is FundAnything Differentiator There is no cost involved in setting up a project and there are no restrictions as to what you can raise funds for Overview • FundAnything is a fast, easy way to raise money online • Individuals or groups can create campaigns that highlight their personal stories or causes and explain in detail what they are trying to achieve by raising money • You can use FundAnything to raise money for a business idea, tuition, medical emergency, volunteer project, or a celebration involved and gives advice/ makes recommendations on specific projects Page 89 Radical Ideas | Practical Implementation
  • 90. Key thoughts • Headquarters: Manhattan, New York, United States • Launched: 2008 • Classification: Recievable/ Crowdfactoring • Target: Startups • Notable: Kickstater has had more than 20 000 projects that were successfully funded • Field of expertise: – – – – – – – – – – – – – Art Comics Dance Design Fashion Film & Video Food Games Music Photography Publishing Technology Theatre Kickstarter Differentiator It works on the belief that a good idea, communicated well, can spread fast and wide and a large group of people can be a tremendous source of funding and support Overview • Kickstarter is a funding platform for creative projects including everything from traditional forms of art to contemporary forms • Kickstarter aims to let creative people of all kinds raise money for their projects by connecting directly with fans, who receive exclusive access and rewards in exchange for their patronage • Kickstarter also works as a publishing platform where projects creators can communicate with the people that are supporting them Page 90 Radical Ideas | Practical Implementation
  • 91. Key thoughts AppsFunder • Headquarters: Differentiator • Launched: 2010 • Classification: Recievable/ Backers make money from the sales on Android Market and iTunes when the app is published. You are also offered the opportunity to pitch your app idea at the expert pannel Netherlands, Ghent Crowdfactoring • Target: Startups/ Projects • Incentive: Rewards, cash incentive • Number of projects: – AppsFunder funded 20 projects with a total amount of US$21 925 – Has funders who funded a total of US$24 945 Overview • AppsFunder is an online platform for technology start-ups to raise funding through collecting pre-orders for products or services they want to developed • AppsFunder is dedicated to realizing mobile applications for developers • Application developers keep 100% ownership of their apps • AppsFunder is a crowdfunding-site 100% focused on the mobile app - business. Developers can receive pledges for developing new apps for Android, Apple iOS • Field of expertise: – Apple-based mobile applications – Andriod-based mobile applications Page 91 Radical Ideas | Practical Implementation
  • 92. Key thoughts • Headquarters: Cambridge, United States • Launched: 2010 • Employees: 50 – 100 • Registered users: 180 000+ • Classification: Recievable/ Crowdfactoring • Target: Niche/ SMMEs • Incentive: 30% of the total revenue generated by direct sales of the product on Quirky.com, as well as 10% of revenue from indirect sales Quirky Differentiator The world influences their business in real-time, and they share their revenue directly with the people who helped them make successful decisions Overview • An industrial design company that uses a crowdsourcing platform to solicit ideas for new products • Ideas are voted, and commented on by participants and company employees, and chosen ideas are designed, manufactured and marketed by Quirky • The ideator/ inventor are charged an upfront fee for submitting an idea, and implemented ideas share up 30% of profits made • Funders: Ben Kaufman • Fees: US$10 per idea submission • Field of expertise: – Industrial designs and products Page 92 Radical Ideas | Practical Implementation
  • 93. Key thoughts Start Me • Headquarters: South Differentiator • Launched: 2011 • Classification: Recievable/ Investors buy an online currency called “Investment Credit” R1 = 1 Investment credit. These credits can then be distributed amongst projects the investor is interested in supporting Africa Crowdfactoring or Equity • Target: Startups/ Projects • Incentive: Various rewards are promised to investors based on the amount they are willing to provide • Field of expertise: Overview • By attracting lots of investors who invest smaller amounts of money into a person, company, product or idea you can bypass the traditional ways of raising venture finance • It is a new way to fund entrepreneurs, artists, schools and community projects in South Africa by crowdfunding for equity or other incentives, giving those looking for funding a platform to connect with ordinary people and raise start-up finance Created to support and develop creative and uniquely South African Ideas • Notable: Created by the same group of South African Entrepreneurs behind the South African Investors Network www.investorsnetwork.co.za Page 93 Radical Ideas | Practical Implementation
  • 94. Key thoughts • Headquarters: France • Launched: 2011 • Classification: Recievable/ Crowdfactoring • Target: Startups/ Projects • Incentive: Various rewards are promised to investors based on the amount they are willing to provide Kiss Kiss Bank Bank Differentiator Dedicated to creativity and innovation projects only Overview • Projects are run on the All or Nothing model • If clients reach or outreach their objectives, they will receive the amount they’ve collected. However if the goal is not reached by the end of the campaign, the contributors will be automatically refunded • Strong emphasis is placed on mobilizing a community of followers around the initiative • Field of expertise: The initiative looks to identify creative and alternative projects to fund • Notable: Kisskissbankbank is the European leader of this kind of platform (Crowdsourcing.org) Page 94 Radical Ideas | Practical Implementation
  • 95. Key thoughts • Headquarters: Louisiana, United States • Launched: 2010 • Classification: Recievable/ Crowdfactoring • Target: Startups and small businesses/ Projects • Notable: One of the first companies to provide an online peer-to-business lending platform • Revenue: Loan origination fee • Loan type: Unsecured and Rebirth Financial Differentiator Dedicated to providing loans and services to small businesses based on different level packages/ options Overview • One of the first companies in America to introduce social lending between individuals and institutions peer-to-business lending • Offers solutions i.e. lending opportunities, tools and support strictly for small businesses: borrowers can choose their level of engagement for example a seasoned borrower with less engagement requirements will opt for a silver option, whereas those with increased engagement requirements then they would be better suited for the gold or platinum options • With regards to receivables factoring: the account receivables should be greater then the requested loan secured personal loans • ROI: 8%-10% • Loan types: – Small Business Administration (SBA)loans – Merchant cash advance – Receivables factoring – Fixed Asset Loan – Crowdfunding Page 95 Radical Ideas | Practical Implementation
  • 96. About Us SystemicLogic is a global consulting and research business that operates from a number of centres around the world. Our purpose is to solve complex business problems through skilled and talented people that implement state-of-the-art globally developed intellectual property. Our clients rely on us to provide relevant and practical solutions to their problems. United Kingdom, London South Africa, Johannesburg The Old Church 48 Verulam Road St Albans HertsAL3 4DH London Tel: +44 207 8144 7160 Fax: +44 207 903 5333 Email: info@systemiclogic.net 222 Grosvenor Road Bryanston Tel: +27 10 590 3033 Fax: +27 11 706 3161 Email: info@systemiclogic.net Australia, Melbourne Level 9 440 Collins Street Melbourne Tel: +61 3 9607 1326 Fax: +61 3 9607 1327 E-mail: info@systemiclogic.com.au Uganda, Kampala 254 Albert Cook Road Rubaga Kampala Tel: +256 705 707 Email: jeff.smukasa@systemiclogic.net China, Beijing Tel: +86 136 7132 2954 Email: info@systemiclogic.net United States, New York 590 Madison Avenue 18th Floor Suite 1800 New York Tel: +1 212 753 0503 Email: ryan@systemiclogic.net Radical Ideas | Practical Implementation

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