thecrowdcafe | investment crowdfunding presentation
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The Global Investment Crowdfunding IndustryData, Insight & Trends
April 5th, 2013
Jonathan Sandlund j@thecrowdcafe.com
Jonathan Sandlund | @jsandlund
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thecrowdcafe.com leading provider of research, data and analysis on the global investment crowdfunding industry
localinvestors.org live local. think local. invest local.
about me
Jonathan Sandlundj@thecrowdcafe.com@jsandlund
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Our sponsor: Thank you!
Leading law firm serving the security crowdfunding industry: Portals.
Crowdpreneurs; The Crowd
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Intro to Investment CrowdfundingThe Mechanism
Jonathan Sandlund | @jsandlund
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reward vs. investment-based Reward-Based Investment-Based
‣ Receive no financial return
‣ Legal today
‣ Perks or rewards in return for pledges
‣ Securities offered in return for crowds’ investment
‣ Equity
‣ Debt
‣ Revenue share
‣ Blend
‣ The JOBS Act
‣ Title II vs Title III
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Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
Jonathan Sandlund | @jsandlund
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Funded$$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
Jonathan Sandlund | @jsandlund
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Funded$$
$ $
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
Jonathan Sandlund | @jsandlund
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Funded$ $
$ $
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
Jonathan Sandlund | @jsandlund
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Funded$
$
$
$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
Jonathan Sandlund | @jsandlund
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Not Funded
$
$
$ $
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
Jonathan Sandlund | @jsandlund
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The Legalities of CrowdfundingTitle II & Title III of the JOBS Act
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The JOBS Act
‣ Signed into law by President Obama on April 5th, 2012
‣ Passed the House 390-23; Passed the Senate 73-26
‣ 270 day rule-making period given to the SEC & FINRA (Dec. 31, 2012)
‣ SEC missed Dec. 31st deadline
‣ Title II & Title III delayed
Jonathan Sandlund | @jsandlund
The JOBS Act
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Title II Title III
‣ Lifts ban on general solicitation and advertising on security offerings to accredited investors
‣ Broker-Dealer License/Affiliation
‣ Provided issuer takes reasonable steps to verify accreditation
‣ Businesses Raise up to $1mm in 12-month period from both accredited and non-accredited investors
‣ Investors tiered limits on investment amount
‣ Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Accredited Crowdfunding IMPACT
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‣ Will bring dramatic efficiencies to our private capital markets • Efficiencies = (Internet) * (Private Sector Innovation)
‣ Geographically, socially indiscriminate
‣ Stands to motivate accredited capital off the sidelines and into private companies in an enormous way
Jonathan Sandlund | @jsandlund
Democratized Crowdfunding IMPACT
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‣ Businesses • Conversion of Social to Financial Capital • New Era of Marketing
‣ Investors • Financial Empowerment• Trust • Meaningful Investment
‣ Society • Equal Opportunity
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The U.S. Market
Jonathan Sandlund | @jsandlund
platforms: market segmentation
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Investment Crowdfunding Platforms
Niche/Affinity"Local" (SMBs)Startups
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Global CrowdfundingWhat can we learn?
Jonathan Sandlund | @jsandlund
Macro-Data: Selected Data
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Equity180 Deals
$132 Million
Equity34 Deals
~$7 Million
Debt1,751 Deals$144 Million
Equity17 Deals
$1.3 Million
Equity9 Deals
$784,000
Equity11 Deals
$9.7 Million* Selected sample of platforms; data is a selected sample
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251 Equity
Placements
1,751 Loans
$290+ Million in Crowdfunding Transactions...
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Crowdfunding ModelsInnovation, Diversity
Jonathan Sandlund | @jsandlund
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‣ A+ to C Risk Bands Applied
‣ Offer 1, 3, 5 year loans
‣ £5,000 - £500,000
‣ Auction model: investors bid
‣ Secondary market
‣ Crowdfunded two $80,000 small business loans in under 29 minutes
Debt1,751 Deals$144 Million
Jonathan Sandlund | @jsandlund
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Discovery
Jonathan Sandlund | @jsandlund
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Splash Bathroom Accessories Limited
Jonathan Sandlund | @jsandlund
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Credit Score History
Jonathan Sandlund | @jsandlund
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Key Financials
Jonathan Sandlund | @jsandlund
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Questions & Answers
Jonathan Sandlund | @jsandlund
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‣ Launched 2010
‣ Sector Focus General (concentration: internet, food & drink)
‣ Lowest Raise $19,000 Highest Raise $1.6 million
‣ Averages (median, n= 34)
‣ Raise $97,000
‣ Equity Offered 15%
‣ Post-Money Valuation $633,000
‣ Number of Investors 51
‣ Investment Size $2,468 (low: $331; high: $11k)
Equity34 Deals
~$7 Million
Jonathan Sandlund | @jsandlund
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‣ Launched July 2012
‣ Sector Focus Internet
‣ Lowest Raise $15,200 Highest Raise 240,000
‣ Averages (median, n=17)
‣ Raise $64,000
‣ Equity Offered 10%
‣ Post-Money Valuation $560,000
‣ Number of Investors 69
‣ Investment Size $1,127
Equity17 Deals
$1.3 Million
Jonathan Sandlund | @jsandlund
Minimum Investment $16
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‣ Launched Mid-2012
‣ Sector Focus Consumer Products/Retail
‣ Lowest Raise $500,000 Highest Raise $2.4 Million
‣ Averages (median, n=4)
‣ Number of Investors 20
‣ Investment Size $39,667
Equity11 Deals
$9.7 Million
Jonathan Sandlund | @jsandlund
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‣ Domain Expertise Founding team has deep experience investing in consumer product and retail industries
‣ Curated Deal-Flow To date, less than 2% of applications have been approved
‣ 3 Weeks Time it took Melt to raise $1,000,000
Jonathan Sandlund | @jsandlund
Equity11 Deals
$9.7 Million
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To Summarize
Jonathan Sandlund | @jsandlund
Summary
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‣ Data • Zero Fraud
• Young Market, Traditional S-Curve
‣ Crowdfunding Platforms • Colorfully Diverse
- Debt, Equity, Rev-Share, Blend
• Empowering Businesses & Investors
‣ Value • Businesses, Investors, Communities
Jonathan Sandlund | @jsandlund
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Jonathan Sandlundj@thecrowdcafe.com@jsandlund
Thank You!
Jonathan Sandlund
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