The document summarizes a presentation given by Jouko Ahvenainen on Transatlantic SME Finance at the White House Conference Center in Washington DC on December 3, 2012. The presentation discusses crowdfunding and the JOBS Act, which aims to encourage companies to raise capital through new exemptions and provisions. It also covers emerging solutions for different funding stages, the need for regulation, and conclusions about crowdfunding creating more effective funding markets.

1. Grow VC Group ++
www.growvcgroup.com ++
@growvcgroup ++
Transatlantic SME Finance
White House Conference Center, Washington DC
December 3, 2012 / Jouko Ahvenainen
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2. Develop SME Finance ++
Copyrights © Grow VC Group 2012

3. Summary of the JOBS Act ++
§ The
Purpose:
The
JOBS
Act
is
intended
to
encourage
a
wide
range
of
companies
to
raise
capital
§ The
JOBS
Act
includes
provisions
that:
1. Increase
the
number
of
shareholders
a
company
with
assets
in
excess
of
$10
million
may
have
before
being
required
to
register
with
the
SEC
from
500
shareholders
of
record
to
500
“unaccredited"
shareholders
or
2,000
total
shareholders.
2. Create
a
new
exempLon
whereby
a
company
may
raise
up
to
$1
million
during
any
12
month
period
by
selling
securiLes
through
“crowdfunding,”
(i.e.
raising
a
small
amount
of
money
from
a
large
number
of
unaccredited
investors
via
a
website
(or
a
“funding
portal”)).
3. Create
a
new
category
of
issuer
called
an
“emerging
growth
company”
with
reduced
disclosure
requirements
and
greater
regulatory
flexibility
for
a
5
year
period
aRer
an
IPO/registraLon.
4. LiR
the
current
ban
on
“general
solicitaLon”
and
“general
adverLsing”
in
specific
kinds
of
private
placements.
5. Raise
the
limit
for
securiLes
offerings
exempted
under
RegulaLon
A
from
$5
million
to
$50
million.
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4. Effec/ve
Dates
of
the
JOBS
Act
Title
I
(CreaLon
of
EGCs;
“IPO
on
ramp”)
Largely
effecLve
on
enforcement
Title
II
(Amendments
to
General
The
SEC
had
been
schedule
to
propose
SolicitaLon/AdverLsing)
new
rules
by
4
July
but
did
not
do
so
unLl
29
August.
Final
rules
not
likely
before
end
of
1st
quarter
2013.
Title
III
(Crowdfunding)
The
SEC
is
required
to
adopt
new
rules
by
31
December
but
most
expect
these
changes
to
be
implement
in
mid/late
2013
Title
IV
(Increasing
Reg
A
offerings
to
up
to
Not
yet
effecLve,
date
unclear.
$50
million)
Title
V
(Increased
thresholds
for
Largely
effecLve
on
enforcement.
registraLon
with
SEC)
Title
VI
(Increased
thresholds
for
Largely
effecLve
on
enforcement.
registraLon
with
SEC
for
banks)
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5. New Solutions Are Needed ++
Funding type Problem Solution candidate
Non High Bank or credit card lending Peer-to-peer lending models
Growth doesn’t work properly and instruments
Companies
Seed How to build the first product Angels, crowdfunding, new p2p
lending models
Series A VC’s pick only a few companies Other funding models like
lending and crowdfunding for
non-VC cases
Series B to C No many investors in this area New market place models:
crowd-based funds, syndicate
market places and instruments
Exit of investors The market is not liquid, i.e. very Market places for different
before Exit long-term investments, decrease phases
investment willingness
IPO Big step Easier transition thru different
market places
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6. Regulation ++
For example, Grow VC Group, activities:
ü Crowdfunding Regulatory Intermediary Association (CFIRA)
ü Crowdfunding Professional Association (CFPA)
ü National Crowdfunding Association (NLCFA)
ü Cooperation governmental investors, e.g. Singapore Investment
Company,
ü European Crowdfunding Network (ECN)
ü US Delegation in Transatlantic Economic Forum
ü Cooperation with Securities and Exchange Commission (SEC)
and Financial Industry Regulatory Authority (FINRA)
Conclusion
ü Important to find common solutions and guidelines in order to
get the market work better and make it easier for investors
and companies
6
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7. Conclusions ++
• Crowdfunding brings more money to SME, but also creates more
effective and democratic funding markets from seed phase to IPO
• US JOBS Act is not only early phase (<$1M) seed funding regulation, but
allows market private investments generally and make IPO easier
• Already now first market places for later phases and other asset class too
• Open transparent market places offer more opportunities to
entrepreneurs, but also make them immediately more market
oriented
• Crowdfunding is not only an isolated model, there are already now
models how it works with angels and VC’s, and how e.g. VC’s can also
utilize it to leverage their own investments and also raise capital to
funds
• Any market place need critical mass, similar regulation and policies
help the market to work better
• The market will be a combination of different phases, industries (e.g.
IT or life science) and geographical areas market places that can also
work together
7
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8. About Grow VC Group ++
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9. Over 17,500 investors Over 4,500 startups
Users from 200 countries
Almost $35 Million investment money
10% monthly growth
Dozens of investments, millions of money
Over 400 3rd party crowdfunding
network on the platform
The most global market place for equity
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10. Grow VC Group ++
Finance and Services Infrastucture Portfolio
Samples:
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11. Services and Solutions for all Crowdfunding Ecosystem Needs ++
Turn key solution to start crowdfunding for any
assets, equity or lending, www.crowdvalley.com
Consulting and investment bank services for
crowdfunding ecosystem, www.growadvisors.com
Crowdfunding co-investment fund, works with many
crowdfunding services, www.mutualseedfund.com
The leading global market place to invest money
or work into early phase startups, www.growvc.com
UX & development services to create web and mobile
applications that convey experiences www.changelab23.com
Copyrights © Grow VC Group 2012

12. Jouko Ahvenainen
jouko@growvc.com
+44 7889 833 165 (UK)
+1 646 363 6664 (US)
Grow VC Group ++
www.growvcgroup.com ++
@growvcgroup ++