bolero crowdfunding slides for entrepreneurs

Invest and grow together Member of the KBC group

BOLERO CROWDFUNDING

Koen Schrever

Entrepreneur presentation, March 2015

CEO KBC Securities/Bolero Crowdfunding

Member of the KBC group

What is crowdfunding and what does Bolero

Crowdfunding offer?

Member of the KBC group 3

4 types of crowdfunding…

presale

‘pretailing’

donation reward loan equity

non financial return financial return

philanthropy

direct equity P-to-B

P-to-P

social

mezzanine

convertible

equity linked

subordinated

revenue-sharing

crowdfinance


registration succes fee administration [ 0 – 250 € ]

to get it published [ 3% - 12% of the amount]

all-or-nothing all-or-more

flexibel funding

[ 0% - 3% ] transaction costs payment method

Depending of the CF platform & model:

Crowdfunding is not a free lunch!


focus of crowdfunding

Filling the equity gap?

KBC Securities is active in the entire value chain!


• New exemption added to the Prospectus Law (Article 18§1(j))

• allows crowdfunding without a prospectus so long as the offer does not exceed EUR 300.000, and

the maximum amount per investor does not exceed EUR 1000

• No other specific legislation on crowdfunding or crowdfunding platforms in Belgium

or within the EU

• FSMA issued 2 communications (FSMA-2012-16 dd 12/07/2012 and FSMA-2014-04

dd 26/06/2014)

Belgian regulatory framework


Growing attention policy makers

4.2. Financiële sector: bank- & verzekeringswezen

4.2.1. Een financiële sector ten dienste van de samenleving

“…de regering zal risicokapitaal stimuleren teneinde onze

ondernemers voldoende financiering te verzekeren en het

eigen vermogen van onze bedrijven te versterken. De regering

zal, in navolging van de reeds recentelijk genomen

maatregelen inzake de versoepeling van de prospectusplicht,

de financiering via crowdfunding verder stimuleren en de

activiteiten van crowdfunding platforms beter omkaderen…”


Growing attention journalists


Snapshot Belgium 2013

Bron: DS Infografiek, Douw en Koren


Snapshot Belgium 2014

Source: KPMG: Crowdfunding in Belgium - 2014


Snapshot Belgium for the future

Source: KPMG: Crowdfunding in Belgium - 2014


Investors:

Retail investor clients Bolero platform , Crowdfunding

Private banking and wealth clientèle

Corporate Customers private placement

Crowdfunding by KBC Bolero?

PLUS: ACCESS TO INHOUSE EXPERTISE

(M&A, LEGAL, CREDIT, OPERATIONS, ICT, RISK, COMPLIANCE, ETC.)

Entrepreneurs:

We see lots of starters who don’t get

loans:

Start-It

Connections with entrepreneurs, industry

organisations, associations,…

Connection via our branch network

How can we help them?

Get access to finance

Involve a crowd

Investing in early stage


• Access to a wide range of

entrepreneurs

• Cooperation with Venture Capitalists

and Business Angels

• Screened by FSMA and NBB

• Not in a fund

• Transparency

• Reliable platform

What makes Bolero Crowdfunding unique?

• Access to crowd-investors (Bolero

customers,…)

• Combined with Private Placements

(wealth and private banking, corporate

banking customers)

• Start-it and other partners to help

entrepreneurs

• Early relation with a leading bank

• Future-proof structuring of the

investment

• Very competitive cost


What type of companies are in our sweetspot?

How can the deal be structured?


• No specific sector focus

• Companies looking for financial crowdfunding (bonds or equity)

• 100k€ - 5,000k€ (combination of crowdfunding and private placements)

• Preferably with a first product ready / first paying customers

• Preferably with already a professional investor on board

• Company legal structure: cvba or NV

• CrowdFunding: it’s more than funding…

Type of companies?


Type of instruments if Project is cvba

Project

cvba

Bond

Convertible

Bond

Equity

crowd

crowd

crowd

• Crowd invests in instruments issued by

cvba

• Cvba manages everything directly

(Shareholder-register,…)

• Bolero platform could be used for dividend

/ intrest payments

• Crowd can do follow-on investments

• Private Placement is separate from crowd,

but preferably same conditions

Private

placement


Type of instruments if Project is NV

Project

NV

Bond

Convertible

Bond

Equity

crowd

crowd

• Crowd invests in bonds issued by NV

• Crowd invests in a cvba which in turn

invests in conv bond or equity in NV

• Preferred dividend or remuneration

• Board composed of NV board

members


• Very limited PoA internal cvba

• Extended PoA versus NV (SHA,

• Bolero platform could be used for dividend

/ intrest payments

• Private Placement is separate from crowd,

but preferably same conditions

Private

placement

SPV cvba


Equity investments via crowdfunding

Newco

NV

crowd • BA / VC / PP invest in a company Newco (e.g. C Class shares)

• Newco creates SPV cvba to collect funds from the crowd

• Newco holds A shares in cvba

• Crowd: B-shares in cvba with no voting rights

• SPV has observer right in Newco

• Small cost; bookkeeping + annual account

• Crowd invests in a cvba which in turn invests in Newco

• Board composed of Newco board members (e.g. C-Class

director, President, Entrepreneur,…)

• Templates for the cvba available

• VC / BA / Entrepreneur can get leverage with the crowd

investment


• Newco can do a new round (D-shares) and only needs 1 signature

from the cvba (Crowd)

• At exit, proceeds go to the crowd and SPV is liquidated.

VC / BA

or Private

placement SPV cvba Follow-on

crowd


What does the platform look like?

www.bolero-crowdfunding.be

http://www.bolero-crowdfunding.be/




Entrepreneur process


1. Register on the platform: create a username and password

2. Register as entrepreneur: 1. Fill-out the project summary and submit

2. After first approval, submit full details on your project

3. After final approval, publish your project

4. Start working on your crowd: motivate them them, explain, keep informed

5. Wait until the project funding round is finished

6. In case of a successfull project, proceeds are transferred*; if target funding level is not reached,

investors will be refunded

A few simple steps to take part in crowdfunding

ENTREPRENEUR PROCESS

* A 6% successfee applies

After this press the submit button

Wait for feedback from Bolero Crowdfunding whether your

project is suited for the site

Once approved you can start putting in all necessary

information for the investors

After final approval you can publish your campaign and start

the fundraising process


1. A video

2. The idea

3. The competitive edge

4. Team

5. Market opportunity

6. Marketing strategy

7. Distribution model

What will the entrepreneur provide to the investor?

1. Scalability

2. Financial forecast

3. Revenue model

4. Milestones

5. Use of proceeds

6. Risks

7. Exit plan


Investor process


1. Register on the platform: create a username and password

2. Register as investor: 1. Identification with E-ID + acceptance of terms and conditions

2. Appropriateness test

3. Creation of an e-Wallet (automatic)

4. Click ‘invest-now’ on a project that looks attractive to you

5. Choose the investment amount and payment method*

6. Confirm

7. Wait until the project funding round is finished

8. You have invested in case of a successfull project or get refunded*

A few simple steps to take part in crowdfunding

INVESTOR PROCESS

* For some payment methods, 3% surcharge apply which are not refundable


Advantages and risks of crowdfunding


ADVANTAGES

Access to a new way of financing

Reasonable costs / effort

The power of the crowd: awareness,

market feedback, promotion

Combination with Venture Capital,

Business Angels,…

For the entrepreneur

ATTENTION POINTS

Limited possibilities: €300,000 in total with

€1000/investor, unless prospectus or accredited

cvba

Large number of shareholders if not properly

structured

Open communication: competition sees what

you do

A campaign requires time and effort


ADVANTAGES Access to young companies at an early stage: growth potential Higher potential returns if company performs well Possibility to spread over a large number of companies Being part of the companies of the future Close dialogue with entrepreneur possible

For the investor

ATTENTION POINTS

High risk: non-achievement of goals, bankruptcy, fraud,… can lead to full-loss of investment

Limited transparency: entrepreneurs provides information to the crowd

Very limited or no liquidity

Possibly a long time to exit


The role of Bolero crowdfunding:

• No due diligence

• No advice

• Execution only

• Appropriateness test

• Disclaimers

• Information security: penetration tests and risk scans

• Private Placement: matchmaking only, contract with entrepreneur and investor

• Entrepreneur responsible for communication with investors via the platform

• FSMA/NBB open dialogue

Risk mitigation

As investor

• Be aware of the risk of young

companies

• Assess the business plan and ask the

entrepreneur for additional information

if needed

• Invest limited amounts of money which

you don’t need in short term

• Invest in smaller amounts spread over

multiple projects


How to create a good crowdfunding

campaign?


Events


Entrepreneurial Summit: Feedback Proficiat met het succesvolle event.

Ik vind dat jullie de duidelijke nood, opportuniteit & timing voor CF en zo’n

event heel knap hebben ingeschat.

Ik was onder de indruk van de opkomst en de opname in de pers.

De volgorde en de boodschappen van de sprekers zaten goed en de

cubes waren knap.

De Summit was inderdaad bijzonder geslaagd op alle vlakken: de cubes,

de organisatie, de opkomst, de sprekers, de lancering van het

onlineplatform (met dank aan Kunstmaan en de voormalige strategisch

coördinator van de stad:-), de reacties op twitter, ... Het was top en het

geeft een stevige basis om op voort te werken.

Even uit persoonlijke naam: ik denk dat de organisatie absoluut top was.

Proficiat.

KBC, een grootbank met een breed nationaal investerdeerdersnetwerk, is

een ideale matchmaker. Fijn om te zien dat jullie dit netwerk aanspreken

ten behoeve van startups en ondernemerschap.

Ik denk dat jullie initiatief een "schot in de roos" is en het bewijs dat een

grootbank ook denkt aan verandering van zijn eigen business model, een

schitterend voorbeeld van innovatie in de praktijk.

Sta me toe jullie van harte te feliciteren met de 2 launch events van Bolero

crowdfunding vrijdag en zaterdag. Het was allemaal zeer professioneel en

contentwise sterk. De reacties waren alom positief.

Uiteraard was ik persoonlijk ook tevreden om hieraan te hebben

deelgenomen.

Thank you for all & it has been a great pleasure working with you!

Nogmaals proficiat met de organisatie van beide events.

thx voor de opportuniteiten en vooral ook aan je hele team voor de

vlekkeloze organisatie

Was de moeite vandaag! Knap werk van gans bolero team! Kmo-

mentaliteit...! Proficiat. Zo gaan we crowdfunding op de kaart zetten in

Vlaanderen!

Again congratulations for the successful organisation

Dank voor de uitstekende organisatie van dit event. Indien er opvolging

komt van geïnteresseerde investeerders laat ik het u weten.

Ongelofelijk! Ik had een investeerder die het volledige openstaande deel

van de ronde wil funden aan dezelfde T&C’s als de VC waar ik mee

spreek!

Ik was afgelopen zaterdag op de bolero KBC Securities Entrepreneurial

Summit, waarvoor trouwens mijn complimenten voor u en uw team voor

de organisatie van het event.

Er waren enkele personen met interesse in ons project. Ook één zeer

waardevolle introductiemogelijkheid bij een top farma bedrijf in de US.

Het beste event waar ik ooit aan heb deelgenomen als entrepreneur

Follow me on Twitter

Contact me


@Schrever_Koen

[email protected]

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