crowdfunding as an asset class - markus lampinen, growvc and crowdvalley
DESCRIPTION
Markus talked about trends in modern finance, the emergence and background for crowdfunding, and the manifestation of macro trends such as the demand for democracy and efficiency in the world of finance. The discussion also touched on current trends and a future outlook on crowd driven investment models.TRANSCRIPT
Crowdfunding – Asset Classes and Crowd Driven Models
Markus Lampinen
October 27, 2012
CrowdFuture
Marketplace for startup funding Founded 2009 “Everyone Funding Startups”
– 2011 - $25M– 4000+ startups– 190+ countries – Several raised rounds, first exits
Big idea? To democratize startup funding
Background – Grow VC
The Network Society: Networks cause a comprehensive restructuring of society at large, they are breaking old models of organization.
Crowdfunding is ..
Small money, large crowd No gatekeepers, anyone can invest
Why Crowdfunding?
Same access to information
Efficient and effective framework via direct participation
New customer audiences
Access to new asset classes
.. no one is as smart as everyone?
Securities Crowdfunding
Equity investments Interest bearing loans Other models
One model DOES NOT fit all cases
Who benefits?
VC’s and Angels get– More liquidity– More information– More validation and filtering by ‘the crowd’
Ordinary people– Get more equal opportunities and access
Entrepreneurs– Engaged investors and validation
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Summary: Grow VC Group
Grow VC Groups pioneers funding models for companies globally The Group focuses especially to offer crowd based marketplace and
community technology, and investment products that can work with or be used by 3rd parties
Crowd Valley offers platform and back office functions for crowdfunding services
– Already over 400 customer platforms in the network– #1 equity crowdfunding platform in the world
Mutual Seed Fund offers a crowdfunding co-investment service Grow Advisors, ChangeLab23 and Grow Global Program offer
services to build startups globally
Grow VC Group – growvcgroup.com
Finance and Services Portfolio
Samples:
Infrastructure
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Over 16,500 investors
Over 4,300 startups
10% monthly growth
Almost $35 Million investment money
Users from 200 countries
The most global market place for equity
Over 400 3rd party crowdfunding networks on the platform
Dozens of investments, millions of money
Equity Investments Are Just The Start
US statistics (Bureau of Economic Analysis, Feb 2010)
The “professional investor” numbers– VC Market: $12.4B– Angel Investor market: $23B
• 100 – 300K active angels• Only a few hundred in Silicon Valley
The “ordinary people” market– “Informal investor market”: $162B– Household savings: $8000B+ and rising..
Crowdfunding is bigger than funding the next Facebook or Google
Trust networks challenge outmoded models of control
Trust and Micro loans
People invest in..
What they know and trust
Who they know and trust
What does it mean for crowdfunding?
Read & write, participatory, conversational: markets are conversations, marketing is a conversation, business is a social science!
A new language:
Connected Ecosystem is Needed
Connected Local Ecosystems
• One BIG Kickstarter?• There is a reason the financial market is de-centralized
with specialized brokers, marketplaces and exchanges• Local operators like incubators, angel networks, brokers
add credibility and transparency• Who do you trust?
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Crowdfunding Ecosystem
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It’s important to build the framework for crowdfunding together with other investment models– Get other investors and money to participate– Help manage investments– Continuity for next funding rounds
Investors can also offer other value There can be co-investment models, passive or active It is important to build co-operation with business
angels, VC’s, incubators and others in the ecosystem
Crowdfunding is Diverse
Crowdfunding is not only for non-accredited investors or for equity investments
Crowdfunding for institutional investors, high net worth individuals, accredited investors…
Crowdfunding for equity, loans, real estate, specific properties or assets...
Case: Oil & Gas
Oil and Gas properties in the US
Crowdfunding for institutional investors, possibility to allow “normal people” to participate in the future
Co-investments with mezzanine fund
Typical deal $8M - $20M
Case: Real Estate
Real estate is a known asset class, suffers from high entry costs and low liquidity
Crowdfunding for accredited investors, possibility to allow “normal people” to participate in the future
More efficiency and transparency in the process
Case: Grassroots Ecosystem
Joint effort between university incubator, angel network and early stage fund
Direct participation via crowdfunding to allow grassroots to reinforce itself
Benchmarking “entrepreneurial ecosystem”
WE HAVE A DREAM:more equal opportunities,
where companiesand investors unite
to accelerate innovation
Future
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• Crowdfunding is here to stay, equity crowdfunding is just starting to grow
• Crowdfunding does not replace other models or solution for needs, it needs to work with the entire ecosystem
• A working, connected ecosystem is needed: It’s crucial to build an ecosystem where different stakeholders and investment models work together, including crowdfunding
• Crowdfunding is not only for startup funding, it will have an impact on the whole finance sector and make it more effective
Thank You
Markus LampinenCEO / Crowd Valley Inc
+1 646 801 4054 (US)[email protected]
845 Third Avenue, New York
www.growvcgroup.com