ecia conference - crowdfunding panel - 5th june 2013
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The future of
crowdfunding in
Europe for CCIs:
from project to
equity
crowdfunding?
17:00h 18:00h
The future of crowdfunding in Europe for CCIs: from
project to equity crowdfunding?
Crowdfunding arrived some years ago and at this point is strongly established as an
alternative available source of finance for entrepreneurs and companies. From a
European point of view, we wonder how is this tool evolving and which are the new
trends. Moreover than financing contents, is crowdfunding useful for financing
companies? Are the new platforms a good tool for investors? What are the
advantatges? We take a look at some of the most interesting initiatives that are
recently taking place around Europe in this field.
Moderator: Ramon Saltor, CEO, The Crowd Angel
� Marija Popovic, Head of European Project Department, European Design Center -
10’
� Liam Collins, Policy Advisor, NESTA - 5’
Liam Collins is a Policy Advisor working on Innovation and Economic Growth at UK
Innovation Foundation Nesta. His work focuses on access to finance for young and
growing businesses most recently examining the potential for crowdfunding and peer-
to-peer lending. His reports include The Venture Crowd, which examined the potential
and challenges for equity crowdfunding, Crowding In which articulated the breadth of
areas crowdfunding is having an impact and Banking on Each Other which is the first
piece of research examining the potential of peer-to-peer lending to small and
medium-sized enterprises.
� Benoit Vandevivere, ECN Member & Policy Advisor and CEO of Secured Assets and
AAA Group - 5’
Entrepreneur involved for over 15 years in the Internet, IT and Telecom industry, he
has hold senior executive at startups as well as larger multi billion Euros companies. He
is also Advisor on Policymaking at the European Crowdfunding Network, Europe's
largest Crowdfunding organization. He is CEO and co-founder of AAA Group and
Secured Assets. Secured Assets is an asset-based financial vehicle for Crowdlending.
He lived and worked in Asia, United States and Europe and has signed business deals
all over the World, from Africa to Asia, from Europe to America (North and South) with
Fortune 500 companies.
He has been involved in the internet wave back in 1995 working with the founding
team of AOL Europe (now part of AOL time Warner). -
He holds Master degrees in Business Administration, in Computer Science from Paris
Dauphine, Post-grade studies in corporate governance, High Tech Management, Sales
Management and Marketing from Harvard University
Master and Post-degree titles in International Business Law (Such as insolvency
administrator and Expert Witness in IT).
He speaks Spanish, English, French and understands Catalan, Italian.
Benoit is a frequent speaker at government-backed initiatives including European
Union, Austria, USA, Singapore, France around entrepreneurship policymaking.
Recently he spoke to the NYSE Euronext HQs in Paris on SMB financing, Federal
Chamber of Commerce of Austria, European Commission HQs in Brussels regarding the
Crowdfunding and its policymaking.
� Carlos Silva, President & Chief Operating Officer, Seedrs - 5’
� Ramon Saltor, CEO, The Crowd Angel - 5’
Moderator: Ramon Saltor, CEO, The Crowd Angel
The future of crowdfunding in Europe for CCIs:
From project to equity crowdfunding
Barcelona, June 5th, 2013
Ramon Saltor, [email protected]
1997 – MARILLION, $60,000
2001 – ARTITSHARE, 1ª plataforma para música
2009 – BARACK OBAMA, $137M
2011 – EL COSMONAUTA, €300.000
2012 – KICKSTARTER - 17 projects, $1M+ - $319M in total funding - FEB: Elevation Dock 1st campaign $1M - MAR: Pebble Technology 1st campaign
$1M+ ($3M) - MAY: 1st campaign $10M
Crowdfunding milestones
2012 – JOBS ACT
Market growth and composition
Fuente: Crowdfunding Industry Report 2012, crowdsourcing.org
2012 2013 (Forecast)
Fuente: Crowdfunding Industry Report 2012, crowdsourcing.org
Equity
Crowdfunding cathegories
Lending Reward Donation Mixed others
Market growth and composition
Fuente: Crowdfunding Industry Report 2012, crowdsourcing.org
Market growth and composition
Marija Popovic, Head of European Project Department, European Design Center
How to Grow Tools for Creative Industries
www.howtogrow.eu
Where did we come from?
How to Grow was developed under the
Bcreative project, a Europe INNOVA
initiative.
It was designed as an online toolbox and
meeting place for creative professionals.
The platform included three main areas:
Gaining knowledge
Including a Mediabase and a Watch and Interact area
Building networks
Including a partner search tool, a forum and personalized
profiles
Getting finance
Including information about available grants and funds,
crowdfunding platforms and other sources of finance.
How did it evolve?
With much experimentation and user feedback, How to Grow evolved into
a more dynamic and interactive platform with a particular focus on access
to finance content.
We started organizing regular live events on topics like pitching,
investment in Creative Industries and success stories from creative
entrepreneurs.
We also recruited many sectoral partners to support us with knowledge
and access to creative businesses. Some partners include the Frankfurt
Book Fair, London Fashion Angels, ECCE, CKO, among others.
How to Grow became a centralized touch point for creative professionals
looking to start or grow their businesses.
We also invested in preparing the
platform to better support those
looking for finance.
Supported by a new project (CI-Factor) under th European Creative
Industries Alliance, How to Grow is now focused on better linking
traditional and new financiers with creative businesses.
New developments to be launched
soon
An aggregator for Crowd funding in Europe
A meeting place for investors and creative pitchers
A source of practical knowledge on access to finance for CI
How can you participate?
For creative companies: Find relevant knowledge, connections and meet
investors for your business.
For investors: Get connected with promissing businesses, carefully
prepared by How to Grow and its partners. Find other investors and
embarc on joint ventures.
For incubators/ accelerators: Put your start-ups and entrepreneurs in
contact with international investors.
For crowdfunding platforms: Join the community and increase your
platform’s visibility.
For all: Collaborate with How to Grow on our current areas or join us on
continuously improve and develop the platform.
Liam Collins, Policy Advisor, NESTA
$2.7bn in 2012, predicted to almost double in 2013
Source: Massolution
Distinction between different models important
UK Crowdfunding Directory
www.crowdingin.com
Rewards Crowdfunding
Benefits:
• Easy to access opportunity to raise finance • Can test market demand • Cheap to fail • Can use feedback during funding process to
iterate on idea • Don’t have to give away equity • Don’t have to pay back loan • Can be good marketing tool
Rewards Crowdfunding
Rewards Crowdfunding
Rewards Crowdfunding
Potential drawbacks
• Requires a lot of effort • Failure rates can be high • Fees (although usually only if successful) • Cost of delivering rewards • Difficult to source large contributions • Not all businesses are setup to do rewards
Equity Crowdfunding
Equity Crowdfunding
Benefits
• Allow investors to benefit in success of venture • Potential for businesses to source larger
investments • Can source non-financial assistance from
backers • Decreases the cost for investors of building a
diversified portfolio of equity investments • Generous tax breaks in some regions
Equity Crowdfunding
Potential drawbacks
• Businesses have to give away equity • Potential for investors to loose all of their money
(especially inexperienced investors) • Possibility of regulatory restrictions • Managing large numbers of shareholders (with
some types of equity crowdfunding) • Fees (usually dependent on success)
Equity Crowdfunding
Challenges for crowdfunding going forward?
• Will dominant players be geographically concentrated?
• Equipping people with the skills to engage the crowd for funding
• Ensuring the model does not have an adverse effect on equality
• Interacting with traditional forms of funding • Ensuring regulation is proportional to risk
Benoit Vandevivere, ECN Member & Policy Advisor and CEO of Secured Assets and AAA Group
5th June 2013 Barcelona
www.europecrowdfunding.org Benoit Vandevivere
About us
• Initiated in November 2011 • Set up as an International Not-for-Profit (AISBL) • Privately funded • 1000+ supporters and members across Europe • Advises EU institutions: European Commission, EESC,
European Parliament etc. • Advises national regulators and instituions in UK,
France, Spain, Portugal, Austria, Netherlands, Italy • Collaboration with professional stakeholders across
Europe
5th June 2013 Barcelona
www.europecrowdfunding.org Benoit Vandevivere
Regulatory Hurdles
• Prospectus Directive • (2003/71/EC, amended by 2010/73/EC) • Accepting reclaimable funds • (Directives 2006/48/EC & 2009/110/EC) • Undertakings for Collective Investment in Transferable
Securities (UCITS directive) • Alternative Investment Fund Managers (AIFM directive) • Markets in Financial Instruments Directive (MiFID & MiFID II) • Corporate law provisions for SMEs with large shareholder No.
5th June 2013 Barcelona
www.europecrowdfunding.org Benoit Vandevivere
Carlos Silva, President & Chief Operating Officer, Seedrs
Investing in startups made simple and rewarding
Carlos Silva President, COO and Co-Founder ECIA Conference – 5th Jun 2013
What is Seedrs?
seedrs.com / @seedrs
Seedrs is an online platform allowing anyone to invest in startups
• Launched in July 2012
• Fastest growing equity corwdfunding platform in the world
• Operating in the UK
• Launching in rest of Europe by the end of the year
Seedrs Limited is authorised and regulated by the Financial Conduct Authority
What pain does Seedrs address for entrepreneurs?
• Great demand for seed-stage capital
(<£150.000)
• VCs don’t do small investments
• Angels rarely do real seed
RESULT
Many potentially great startups never get off
the ground due to lack of capital
seedrs.com / @seedrs
Entrepreneurs lack access to genuine seed-stage capital
Seedrs Limited is authorised and regulated by the Financial Conduct Authority
What pain does Seedrs address for investors?
• Very appealing investments
• Strong net returns
• Excitement factor
• Friends and family want to support
• Very high transaction costs
• Only top 1% can actually diversify
seedrs.com / @seedrs
RESULT
Many people would love to allocate a portion of their capital to startups but can’t currently do so
Investing in startups offline takes a lot of time and money
Seedrs Limited is authorised and regulated by the Financial Conduct Authority
Why do investors and entrepreneurs love Seedrs?
Invest small amounts in startups they like
INVESTORS ENTREPRENEURS
Money Access capital from a wide
range of investors
Get connections, advice and support
Base of mavens
One sophisticated shareholder
Provide support, or else be passive
Wisdom of the crowds
No administrative or legal work
Support
Validation
Simplicity
seedrs.com / @seedrs
BENEFIT
Seedrs Limited is authorised and regulated by the Financial Conduct Authority
How have we done so far?
25 startups funded
> 15,000 registered members
>€1.5M invested
0
50
100
150
200
250
300
350
400
450
500
550
600
Q3 2012 Q4 2012 Q1 2013
Net Investments (in £000s)
seedrs.com / @seedrs Seedrs Limited is authorised and regulated by the Financial Conduct Authority
Seedrs Limited 2 Chapel Place Rivington Street London EC2A 3DQ United Kingdom www.seedrs.com
Questions?
Seedrs Limited is authorised and regulated by the Financial Conduct Authority.
R. Aprígio Mafra, 17, 2Esq. 1700-051 Lisboa Portugal
Ramon Saltor, CEO, The Crowd Angel
The problem
• Valuation
• Legal framework
• Structuring
• Risk Diversification and co-investment
• Time consuming
• Follow up
We did not invest!
Value Add to investor
Deal Flow P2P Filtering Professional Structuring Follow up
Investment “grade”
Charity
Fan Support
F, F &F
Venture Capital
Recommendation Access
A hybrid between crowdfunding and VC
REQUIERES: • High level of involvement • Understanding the
entrepreneurship and the sector
• High wealth
OFFERS: • Involvement as wanted • High diversification of your
investments • Security in the investments
From “BUSSINES ANGEL”… … to the “CROWD ANGEL”
A hybrid between crowdfunding and VC
Venture Capital experience and methodology at the service of individual investors
To invest in winning teams, with innovative projects and high growth potential
The Inveready Group facilitates access to the country’s best entrepreneurial projects
1 A rigorous selection process
€3,000 tickets, as many tickets as you want
Legal contracts, that guarantee investor rights, have been made in accordance with the standards of Venture Capital
Crowd Angels syndicate their investment
2 A standardized investment process
Quarterly follow up reports sent to the Crowd Angels
Two positions in the BOD for the Crowd Angels
3 Investments monitoring
Monitoring (Board and Council voting, etc) can be performed through a system of on-line voting
The whole investment process can be done on-line, thanks to the implementation of digital signature
4 Online: Investment and monitoring
1 DIRECTLY
(by registering in the platform)
2
5
PARTNERS (Business angels
networks, Business shcools alumni, investors
clubs, etc)
A big network
As easy to decide as an online coupon
As easy to contract as an App
As easy to maintain as a listed share
As proactive as a Business Angel
The Crowd Angel, our vision
Contact: Ramon Saltor Donada Tel: (0034) 93 186 01 14 [email protected]
The Crowd Angel C/ dels Cavallers 50 08034 Barcelona
www.thecrowdangel.com