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Crowdfunding in Europe!Paul HigginsCo-founder, Crowd ValleyMay 25th, 2013Gründer- und UnternehmerforumBerlin

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Overview!• Grow VC Group – innovating investing• Crowdfunding in connected ecosystems• Crowdfunding in Europe today• Where crowdfunding is going next@paulhigginz @crowdvalley

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Background – Grow VC!• Global marketplace for startup funding• Founded 2009• “Everyone Funding Startups”– 2012 - $35M raised– 5,000+ startups– 190+ countries– Several raised rounds, first exits@paulhigginz @crowdvalley

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Cintep (Australia): First $100,000 from equity crowdfunding!@paulhigginz @crowdvalley

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Regulatory activities!• US Delegation in Transatlantic Economic Forum• Cooperation with Singapore Government Investment Company, UKTI, etc.• Crowdfunding Regulatory Intermediary Association (CFIRA)• Crowdfunding Professional Association (CFPA)• National Crowdfunding Association (NLCFA)• European Crowdfunding Network (ECN)• Cooperation with Securities and Exchange Commission (SEC) and FinancialIndustry Regulatory Authority (FINRA)@paulhigginz @crowdvalley

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Title II• Online Solicitation of AccreditedInvestors• This part opens possibility market, selland trade private securities in marketplaces• This part can have more importantinfluence on later funding phases thanthe early phase crowdfundingTitle III• Crowdfunding with non-accreditedinvestorsH.R. 3606: Jumpstart Our Business Startups (JOBS Act)!@paulhigginz @crowdvalley

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Grow VC Group!• Launched spin-off Crowd Valley in 2012 to provide crowdfundinginfrastructure:– Configurable platform– Shared business networks– Back Office financial services• Spun out other companies providing various services to support new onlinefunding marketplaces– Grow Advisors– ChangeLab23– Mutual Seed Fund• Developed a portfolio through global incubation services– 6 portfolio companies to date@paulhigginz @crowdvalley

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Finance andServicesInfrastructure InvestmentPortfolio@paulhigginz @crowdvalley

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Crowdfunding platforms can provide…!• Validation of an idea• Relationships with new potential customers• Matchmaking between investors and entrepreneurs• Efficient access to capital• Standardised documentation, e.g. Shareholder Purchase Agreements• Access to talent@paulhigginz @crowdvalley

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Equity crowdfunding has now provided over $200m"!0 20 40 60 80 100 120 140 160 180 200 Funds raised / $m Australian Small Business Offerings Board Grow VC CircleUp CrowdCube Seedrs Symid Data from www.thecrowdcafe.com@paulhigginz @crowdvalley

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Where crowdfunding is today!Source: crowdsourcing.org@paulhigginz @crowdvalley

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Crowdfunding must be part of existing ecosystems!• Crowdfunding does not happen in a vacuum• “Invest in Lines, not Dots” – venture capitalist, Mark Suster:Images from bothsidesofthetable.com/2010/11/15/invest-in-lines-not-dots@paulhigginz @crowdvalley

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Building an entrepreneurial ecosystem in your city!UniversitiesIncubatorsAcceleratorsGovernment programsInvestor pitch eventsAngel networksFunding platforms@paulhigginz @crowdvalley

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A ’typical’ startup path!UniversitiesIncubatorsAcceleratorsGovernment programsInvestor pitch eventsAngel networksFunding platforms@paulhigginz @crowdvalley

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The investor’s viewpoint!@paulhigginz @crowdvalley

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Finding your natural constituency!Source: crowdsourcing.org@paulhigginz @crowdvalley

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Crowdfunding in Europe today!• New regulations in Italy– The CONSOB regulation implements Law n. 221, the so-called DecreeGrowth– Currently only available to “innovative startups”, which have auniversity researcher in their team and an institutional investor tosubscribe to at least 5% of the capital required• Many platforms around Europe with various funding models, some alreadyauthorised by financial regulators– CrowdCube (UK)– Seedrs (UK)– Companisto (Germany)– Symbid (Netherlands)– Siamosoci (Italy)– Etc.@paulhigginz @crowdvalley

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Equity crowdfunding success in consumer internet!0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Propor%on of all successful equity fundraises in Europe by sector Data from www.thecrowdcafe.com@paulhigginz @crowdvalley

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Rewards crowdfunding success in music, film, theatre!0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Propor%on of all successful Kickstarter fundraises by sector Data from www.kickstarter.com@paulhigginz @crowdvalley

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Median equity crowdfunding raise for 11% equity!0 2 4 6 8 10 12 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 Number of equity fundraises in Europe Amount of equity given to crowdfunding investors / % 11%Data from www.thecrowdcafe.com@paulhigginz @crowdvalley

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0 50 100 150 200 250 300 350 400 450 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 No. of Investors Funds raised through crowdfunding for equity in Europe / $ Average raise of $111,000 from 80 investors (in 46 days)!80$111kData from www.thecrowdcafe.com@paulhigginz @crowdvalley

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Equity crowdfunding goes beyond startups!• Expanding a mezzanine fund for Oil & Gas investments in Rio de Janeiro• Providing liquidity for existing shareholders in high-tech companies inAuckland• Doctors financing R&D for new medical device companies in Sydney• Alumni supporting their university’s entrepreneurship in San Francisco• Offering investment opportunities in real estate in London• Connecting traders of precious stones with professional investors in NewYork@paulhigginz @crowdvalley

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Crowd Valley: Your Crowdfunding Network!@paulhigginz @crowdvalley

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Crowd Valley: Your Logos, Branding, Rules!@paulhigginz @crowdvalley

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Crowd Valley: Your Look & Feel!@paulhigginz @crowdvalley

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Where crowdfunding is going next…!• Powerful and informative provider of data• Efficient marketplaces in diverse sectors• Integration with the rest of the ecosystem– Universities– Incubators– Angel investors– VCs– Institutional funds• Co-investment models– Active– Passive@paulhigginz @crowdvalley

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Crowdfunding in Europe!Paul Higgins@paulhigginz @crowdvalleypaul@crowdvalley.com