Category Archives: Crowdfunding International

How Asia Is Adapting To The Alternative Finance Revolution

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In more ways than one, alternative finance has made borrowing simple, swift and suitable. Over the last few years, alternative finance providers have grown in number and garnered significant acknowledgement and traction from stakeholders such as regulators, venture capitalists, banks, enterprises and investors. They provide financing outside the parameters of traditional lenders, most commonly banks. Breaking it down even further, alternative finance includes domains such as crowdfunding, peer-to-peer financing, and invoice financing.

The rise of alternative lending

The sudden rise of alternative finance can be attributed to two reasons. First, the inability of traditional financial institutions to cater to certain segments of the market which need access to secure financial services. And second, because fintech firms have recognized these gaps, successfully experimented and developed solutions to fix these gaps with minimal red tape. Based on data from The World Bank, more than 200 million micro, small and medium-sized enterprises (MSMEs) in emerging economies lack adequate financing, due to lack of collateral, credit history and business informality.  Until recently, alternative finance platforms have witnessed staggering success and even reached a stage of maturity in the Western markets, particularly in the U.K and U.S.

See:  Research: Americas Alternative Finance Grows to $35.2 Billion in 2016

In recent times even the East has also joined the ranks and given the alternative finance industry a major boost. Countries such as China, Singapore, Hong Kong, and most recently Indonesia, Malaysia, the Philippines, and India have displayed a tremendously positive response to several platforms providing alternative forms of finance to enterprises and individuals. Rightly so, as Asia is home to a population of 4.4 billion and 5 key financial centers of the world. Aside from a considerably large consumer base and a relatively stable political system, most of the Asian economies emerged from the 2008/09 financial crisis in better shape than its western counterparts. The tightening of credit across several banks across the region has played a pivotal role in the growth of alternative finance in these markets.

As alternative financial products gather momentum, China’s state-controlled banks are losing share of the nation’s 44.8 trillion yuan in household deposits. The same can be said for many major Asian banks.

A special mention must be made of the Asian regulators which are actively encouraging and supporting the growth of alternative finance in their respective countries. Singapore’s regulator has set aside $225 million to develop and support fintech projects locally. It has also eased the rules for financiers to increase the level of unsecured lending. The Monetary Authority of Singapore has even housed an innovation lab called Looking Glass within its building. Hong Kong Monetary Authority has created a system which brings banks, financial technology platforms and the regulator itself to collectively brainstorm and experiment on developing innovative solutions.

See:  Share Your VOICE and Help Define the Future of Alternative Finance in Canada (until Jun 30, 2017)

In the same manner, China has become the largest P2P market regionally thanks to its government which encouraged the growth online finance to cater to the underserved market instead of solely relying on local banks. Japan has taken a step further to collaborate at an international level by partnering with the Financial Conduct Authority to encourage a cooperation between financial technology platforms in Japan and in the U.K to be able to operate in both countries.

New kid on the financial block

As the alternative finance industry continues to grow and expand, it has seized a significant portion of market share from traditional lenders by attracting their investors and borrowers onto its agile and innovative platforms suitable for a wide range of users. For example, such platforms provide investors the opportunity to find and zero down into investments which suit their specific risk appetite with greater control over their investments than a portfolio manager. At this point one may wonder - how would banks react to such forces of fintech? Would it be hostile, or regressive? After all, investing and lending are the basic fundamental reasons behind a banks existence!

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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There are Now 29 FINRA Regulated Reg CF Crowdfunding Portals

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CrowdfundInsider | By

The number of FINRA approved and regulated crowdfunding portals has been inching higher. Today, there are 29 different Reg CF crowdfunding platforms each targeting the new securities exemption created under the JOBS Act 0f 2012. At the beginning of 2017, that number stood at 22 approved Reg CF platforms with a single entity, Ufundingportal losing it license after FINRA took action after it determined there was significant potential for fraud emanating from the site.

About a year ago, there was less than have this number so interest in launching a Reg CF platform has remained fairly robust.

See:  Is Your Crowdfunding Portal Ready for Your First FINRA Exam?

Some interesting new additions to the list include “Good Capital Ventures” based in Massillon, Ohio. According to the SEC filing, Good Capital Ventures was founded by Justin Jeffrey Gantz who is an architect by education. The site is apparently not yet live.

EquityBender, based in Newport Beach, California, is another new platform. Their website indicates their team has experience in raising more than $250 million for early stage and growth companies in the past years.

Sprowtt Crowdfunding in Tampa, Florida, was founded by Mark Robert Jones. Affiliated with Sprowtt Services, Jones is said to have been “asked to actively participate in crafting the JOBS Act, including the equity crowdfunding laws and regulations.”

Title3Funds, operated by Fundivations, is another new addition. Based in Irving, California, this platform was founded by Ronald Hirsch.

To date, over $36.6 million has been successfully raised for Reg CF issuers. The top four platforms lead the way:

  • Wefunder – $20.4 million
  • StartEngine – $7.9 million
  • Indiegogo (Microventures) – $3.2 million
  • NextSeed – $2.8 million

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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$150 Million: Tim Draper-Backed Bancor Completes Largest-Ever ICO

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Coindesk | by Stan Higgins, Alex Sunnarborg & Pete Rizzo | Jun 12, 2017

An initial coin offering (ICO) for a blockchain project called Bancor has set a new industry record, raising approximately $153m in ether, the native currency on the ethereum blockchain, as part of a crowdsale that concluded today.

Data shows a smart contract connected to the sale had collected more than 390,000 ether by the time it ended at 18:00 UTC, an amount worth $152.3m at current prices. As such, the figure is higher than even the funding raised by The DAO, the notorious failed fundraising project that made headlines last year when it lost the millions of the $152m in investor funds it raised in a similar sale.

Overall, 79,323,978 Bancor network tokens (BNTs) were created as part of the ICO, with the top token holders now possessing 83.96% of the tokens, or 66,601,702 BNT. Fifty percent of the total tokens, or 39,661,989 BNT, were sold to the public, while the remaining 50% were allocated for future use.

The ICO attracted 10,885 buyers, according to available data, with more than 15,000 transactions sent to the address for purchases during the sale. One buyer went so far as to purchase 6.9m BNT, or roughly $27m, in the sale.

See:  Don't miss the Annual Summer Kickoff Rooftop Networking session June 22 @The Spoke Club

Launched in 2017, Bancor, overseen by the Bprotocol Foundation, has been pitched as a platform designed to make it easier for users to launch their own blockchain tokens.

Of the remaining funds, a blog post by the company states token capital will be directed toward partnerships, community grants, public bounties and project advisors.

Issues with the sale

As with past sales of this kind, the ICO was accompanied by reports that the ethereum network faced significant transaction loads, resulting in delays for buyers.

However, the project itself was adversely affected by long wait times on ethereum.

According to the Bancor website, an initial funding target was set at 250,000 ether, though this figure was not hard-coded into the smart contract deployed. As a result, a transaction sent on the ethereum blockchain in an effort to change the contract and limit the crowdsale in length did not work as desired.

Due to network disruption and delays holding up this transaction, the company said the crowdsale ended up continuing longer than initially desired. Overall, it lasted an two additional hours as a result of the delay.

Posts on social media further suggest that at least some users saw transaction issues during the sale. One thread on Reddit drew complaints about transactions being dropped as long as 35 minutes after they were sent to the ICO address.

Some participants who spoke to CoinDesk also said that they had experienced delays in transacting, including one who had issues moving their ethers off an exchange for the purposes of participating in the ICO.

One exchange operator went so far as to argue that the ICO had increased transaction congestion, colorfully remarking that larger ether buyers were disrupting the sale.

Notable investors

Another factor contributing to the frenzy is that, as sale was getting underway, Bancor revealed it had attracted new and notable investors.

Among those announced to be contributing funds was investor Tim Draper of VC fund Draper Fisher Jurvetson. Though new to the ICO space – he previously backed the Tezos project ahead of its yet-to-be-held offering – Draper has invested in a number of bitcoin startups in the past few years.

In 2014, Draper made headlines when it emerged that he had bought 30,000 bitcoins during US government auction, later picking up an additional 2,000 BTC during a second sale. As part of the funding, Draper will also be joining the project as an advisor.

The Bancor sale was also backed by Blockchain Capital, an investment firm that focuses on startups in the space.

According to a blog post published today, Blockchain Capital is making its investment via its BCAP token, which it launched earlier this year.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Is Your Crowdfunding Portal Ready For Your First FINRA Exam?

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Crowdfund Insider |  

With the recent one-year anniversary of Crowdfunding under Regulation Crowdfunding on May 16th, business executives and compliance officers at registered Crowdfunding Portals (CFPs) should be actively preparing for their first regulatory examination by the Financial Industry Regulatory Authority (FINRA).  

FINRA’s 2017 exam cycle will for the first time include the examination of CFPs. FINRA will conduct examinations of each CFP within the first twelve months of membership and no less than once every four years thereafter.  FINRA has considerable oversight and authority over the daily activities of its members and periodically exams its members to ensure compliance with both the FINRA rules and the federal securities laws. 

As a self-regulatory organization, FINRA has the power to take disciplinary action against its members which range from fines, censure to full expulsion. Last year, FINRA brought 1,434 disciplinary actions resulting in $176.3 million in fines, $27.9 million in restitution to harmed investors, suspended 727 individuals, barred 517 persons from the industry and either suspended or expelled 50 firms.

Last year we saw UFP, LLC, a once registered crowdfunding portal, expelled from FINRA membership. UFP’s expulsion was a decisive move by FINRA and sent a clear message to the crowdfunding industry. With upcoming examinations and a possibility of regulatory action against member firms and their associated persons, this is an important time for CFPs to ensure that they are meeting compliance standards. FINRA will assess each CFP’s business and the risks associated with those activities.  The level of risks, and the CFP’s management of those risks is an important factor in FINRA determining how frequently the CFP will be examined going forward. After the first examination, CFP’s may be examined on a one, two, three or four-year cycle. 

We expect that FINRA will be carefully examining how CFPs manage their day-to-day operations, ensure that their issuers are meeting the requirements of Regulation Crowdfunding (Reg CF), oversee issuer communications with investors on the portal, and develop their compliance infrastructure to address their specific business model and risks.  The following are some key areas where we believe FINRA will focus its efforts.   

See: Are Overseas Portals the Next Big Thing in US Equity Crowdfunding?

Gate Keeper Responsibilities

CFPs are viewed by regulators as “gate-keepers” with the primary goal of protecting investors from fraudulent and noncompliant offerings. The FINRA rules require CFPs to have a reasonable basis for believing that issuers posting offerings on their portals comply with applicable regulatory requirements, including Regulation Crowdfunding, and require CFPs to deny access to issuers that present the potential for fraud or otherwise raise investor protection concerns.

We expect extensive consideration of how CFPs are evaluating prospective issuers, and the scope and manner of detecting issuer noncompliance. There is growing industry concern that Form C filings and other offering materials being made available to investors may fall short of Regulation Crowdfunding. This ranges from offerings failing to provide the appropriate financial disclosures to offering materials appearing not to provide adequate disclosure about the business and the offering, including non-generic risk factors. One emerging trend includes issuers filing screenshots of the offering’s deal page on the CFP with the SEC as the Form C. These filings are often illegible and at times appear to be thin on disclosure of material information.  If the disclosures provided in the Form C are on their face inadequate or fail to meet basic requirements, we can expect FINRA to inquire into the effectiveness of the CFPs’ compliance procedures and controls.

Communications with the Public & Advertising

CFPs routinely communicate with the public to, among other things, market their services. All CFP communications or advertisements to the public, including written communications distributed to one or more investor, must be based on principles of fair dealing and content must be fair and balanced.

CFP communication with the public may not include false, exaggerated, unwarranted, promissory or misleading statements or claims. This may be as subtle as a slogan, graphic or eye-catching headline which is promissory in nature or hints at the potential future success of a specific offering or the offerings posted on the portal in general. Profit forecasts are prohibited, with the exception of a hypothetical illustration of mathematical principles, provided that it does not predict or project the performance of an investment. 

CFPs are not permitted to make recommendations or provide investment advice. If there are any statements which are intended to act as an endorsement or suggest that an offering is of a higher quality, safer or worthier than others, it could be deemed a recommendation and a breach of the rules.

The scope of review extends beyond just the CFP to all forms of communication. For CFPs that post article, reports and other content prepared by third-parties, your compliance team must be mindful of whether such content is one-sided. CFPs will be deemed to have adopted third-party content which may include impermissible investment advice or recommendations or contain misleading statements. Executives who choose to use the CFP to post their own blogs need to also be sensitive to this issue. Chief Compliance Officers (CCO’s) and supervisors need to carefully review all content posted on the CFP.  FINRA’s recently published Notice to Members 17-18 provides valuable guidance on digital media communications.

One of the most important compliance tools CFPs are expected to use is email surveillance which is the periodic review of communications between the issuer or its agents and the public. We expect that FINRA will be evaluating how CFPs have been monitoring these communications, including how frequently and in what manner this review is conducted. 

CFPs that include offerings outside of Title III Crowdfunding can likely expect questions and comments by FINRA staff pertaining to those offerings as well.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Research: Americas Alternative Finance Grows to $35.2 Billion in 2016

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Crowdfund Insider | | May 25, 2017

The Cambridge Centre for Alternative Finance (CCAF) and the Polsky Center for Entrepreneurship and Innovation and Booth School of Business Booth School of Business at the University of Chicago have revisited the alternative finance market once again with a benchmark study. The research which covers the United States, Canada, Latin America and the Caribbean (LAC) showed continued growth in alternative finance across the region as total market volume rose to $35.2 billion in 2016 – an increase of 23% versus year prior. The report noted that the prior Americas benchmarking report had been adjusted down due to changes in the research methodology. While total volume grew the pace of growth and entry of new platforms both slowed during the year.

The 2017 Americas Alternative Financing Industry Report: Hitting Stride will be formerly presented at an event held at Chicago’s CME Group on May 25th. The Inter-American Development Bank and the CME Group Foundation were both sponsors of the research.

According to the report, the alternative finance industry “has hit a stride” as it continued to evolve at various rates in the regions covered.

“An array of crowdfunding, marketplace/peer-to-peer (P2P) lending and other online alternative finance platforms have emerged that use technological innovations to change the way people, businesses and institutions access and invest money. Furthermore, more than 200,000 businesses turned to online alternative sources of funding across the Americas last year,” stated Randall S. Kroszner, Norman R. Bobins Professor of Economics at the University of Chicago Booth School of Business and Faculty Advisor for the report.

Tania Ziegler, Senior Research Manager at the Cambridge Centre for Alternative Finance, added;

“This report highlights an alternative finance environment that has hit stride – having achieved a steady pace of growth that denotes a competency more akin to traditional players. With platforms from the US driving volume, and Latin American platforms achieving triple digit growth, 2016 has proven that alternative finance in the Americas is becoming a staple channel for consumers, entrepreneurs and small businesses in need of finance.”

The research found that the United States continues to be one of the world’s top markets for Fintech including online alternative finance channels and instruments. The 2016 US market volume of $34.5 billion marked a 22% year-on-year increase from 2015. The US sector was dominated by online lending both Marketplace and Balance sheet iterations.

See:  Canadian Alternative Finance Crowdfunding Market Grows 48% from 2013-2015 and is Predicted to Reach $190 million in 2016

LAC alternative finance markets grew by 209% to $342.1 million in 2016. LAC, collectively as a regional market, surpassed Canada’s national market in 2016. The growth was mainly led by high volume markets in Mexico, Chile, and Brazil.

Canada’s alternative finance market increased 62% to $334.5 million driven by both organic growth and expanded survey coverage included in the research.

Among the key findings of the report:

  • The US, Marketplace/P2P Consumer Lending continued to account for the largest share of market volume with $21 billion recorded in the US in 2016 (up 17%).
  • Balance Sheet Business Lending became the second largest model in the US in 2016 with $6 billion originated, surpassing Balance Sheet Consumer Lending which had $3 billion.
  • Equity crowdfunding in the US, not including real estate, declined marginally in 2016 versus 2015.
  • As of 2017, the report tracked 105 platforms that can be verified explicitly as becoming inactive in the past three years with 79 in theUS, 7 in Canada and 18 in LAC
  • For LAC, Marketplace/P2P Business Lending remained the largest alternative finance market segment with $188.5 million registered in 2016, an increasing of 239% over 2015.
  • In Canada, Donation-based Crowdfunding remained the top alternative finance model with $105.9 million, but balance sheet business lending became a close second, rising at a rate of 282% to $103.3 million in 2016.
  • Reward-based Crowdfunding declined during the year
  • Following changes to US regulatory policy in 2016, emerging Reg CF-enabled platforms made a big mark in Revenue-Sharing/Profit-Sharing Crowdfunding, with $28.5 million in total funding to businesses last year.
  • Self-reported risk perceptions of the alternative finance industry pointed to concerns about cyber-security breach. Seventy-six percent of platform operators believe there is medium to very high risk of cyber-security breach.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Indiegogo Founder Slava Rubin Talks Equity Crowdfunding on Reg CF Anniversary

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Crowdfund Insider | | May 18, 2017

Indiegogo was originally envisioned as a vehicle to sell securities in small companies to the masses. That was back in 2008 and, as we all know, the regulatory environment had not yet caught up to the realities of a world with internet access. Thus Indiegogo pivoted and dove into the perk-based crowdfunding world. Since then, Indiegogo has helped to raise over $1 billion for projects and businesses around the world.

When President Obama signed the JOBS Act into law back in 2012, most people thought regulators would move rapidly and build out the rules that would allow companies to raise capital online.

That did not happen. The wheels of government can move rather slow.

It took four years for each of the crowdfunding exemptions to be completed. The final being Title III of the JOBS Act, the crowdfunding exemption that has received the most popular attention from the media.

See:  Indiegogo Could Soon Dominate Equity Crowdfunding

While Title IV (Reg A+) and Title II (Reg D 506c accredited crowdfunding) of the JOBS Act allow issuers to raise a lot more money online, Title III or Regulation Crowdfunding (Reg CF) was ostensible positioned to benefit the smallest startups or the mom-and-pops in need of growth capital. Ignored by VCs and Angel investors, and being too small for bank loans, these companies clearly lacked access to capital. Thus Reg CF was born.

In May 16, 2016, the new exemption went into effect. Newly minted “funding portals”, a type of broker-dealer light entity that could sell these securities online, listed the first investments under Reg CF. One year later, over $35 million has been raised for more than one hundred small companies.

As it stands today, Wefunder and StartEngine lead the space with most dollars raised. But Indiegogo, a late entry into Reg CF crowdfunding, is quickly catching up.

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Launched in partnership with MicroVentures (First Democracy VC), an already established accredited crowdfunding platform, Indiegogo has diligently pushed into investment crowdfunding. In stark contrast to the free-wheeling, wild-west world of perk-based crowdfunding, Indiegogo has taken a more selective and conservative approach.

Out of twelve crowdfunding rounds listed by Indiegogo, twelve have fully funded. So Indiegogo is batting a thousand. As far as we know, there is only one other active Reg CF portal that can claim the same.

The deals are interesting too. From a restaurant in Washington, DC, Republic Restoratives, raising $300,000 to the Field Guide of Evil (a film) raising half a million dollars.

On Tuesday, I hopped on the phone with Slava Rubin for a quick update as to how he things are progressing for Indiegogo in the equity crowdfunding side of his business. Rubin, co-founder and Chief Business Officer of Indiegogo, passed the mantel of CEO to David Mandelbrot at the beginning of 2016. He is still very much engaged with Indiegogo and is spending his time focusing on innovation and growth.

Rubin said the Reg CF Anniversary was super exciting and they are generating real data and feedback on selling securities online;

“We launched in the middle of November, so only half the amount of time in operation. We are 12 for 12 for businesses that have reached their target. We are at a 100% success rate.”

I asked Rubin if he is seeing any parallels to the perk-based platform.

“There is no question there is a benefit to the history and experience with the perk business. We have worked with thousands of entrepreneurs and millions of backers. That comes with  a lot of people having a good experience and trust. We are building our trust in equity crowdfunding. It has been very helpful.”

Rubin said that it was exciting to see Indiegogo alumni raise funding on their investment side. The perks side is a funnel for potential investment rounds. Rubin also added that having the large existing network of backers has been helpful in getting the businesses funded. “Many times these investors are complete strangers,” said Rubin.

Asked if equity crowdfunding had matched his expectations?

“Yes. Things are going well. It is early, but we expect more growth to come.”

Rubin explained they were receiving a ton of inbound requests because of awareness from their perks side. He said they are making certain that issuers are solid companies. Perks is open but equity – not so much. While he did not know the exact acceptance rate, Rubin said they were far more companies applying than getting posted. Sometimes they will provide feedback to a potential company telling them they need to wait or work to accomplish some more milestones. Sometimes they go to other equity platforms too.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Naval Ravikant hints at future plans for Product Hunt and adding secondary trading to AngelList

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Tech Crunch | | May 19, 2017

Earlier this week, at TechCrunch’s Disrupt event in New York, we sat down with AngelList cofounder and CEO Naval Ravikant to talk primarily about the platform’s new Angel Funds product, wherein a select number of proven “angel-operators” is being provided capital from AngelList and outside VCs to invest in a basket of startups. (We wrote about that new program here.)

Of course, while we had him in our clutches, we wanted to talk with him about other directions in which AngelList might move over time. What we gleaned: the platform, which is famous for continuously iterating on its approach and offerings, may eventually use its late December acquisition of the popular product platform Product Hunt to create a paid offering for companies looking to buy specific technologies or products. It sounds like AngelList may also eventually dive into the brisk secondaries business, wherein investors buy up earlier investors stakes in certain companies.

Here are some outtakes of that chat, edited for length and clarity:

TC: Recently, a crowdfunding marketplace, Seedrs, announced that it’s going to launch a secondary marketplace. It could be interesting to see AngelList get into this business.

NR: We are obviously always looking at secondary marketplaces. The problem is how much liquidity can you have for these things. Generally, if you have a really well-known company, like a Facebook or a Snapchat, before their IPO, there’s demand from later-stage investors for a secondary marketplace. But it’s usually concentrated in a very few names.

See:  A British firm plans a secondary market for crowd-funded shares

We work at the very early stage where, frankly, people don’t know the companies. If someone wants to sell, it’s such a negative signal; it’s not clear that there’s a buyer on the other side. But 1,500 companies on the platform have already raised half a billion dollars and they’ve gone on to raise over $5 billion [in subsequent fundraising rounds], so they’re getting larger and larger and larger, and there will be a point where some of those names become so hot that there will be secondary demand. And then if those companies are open to it, we’ll work with them to fill that secondary demand.

TC: We’re also wondering what you’re doing with Product Hunt, which you acquired in December.

NR:  There’s so much innovation going on, and there’s lots of people funding that innovation, but there’s very little innovation on that infrastructure for innovation itself, so we like to do that ourselves to help companies create more tech companies. So what do tech companies need? They need money, they need talent, and they need customers. So AngelList started out with helping them raise money, now we’re the largest startup recruiting marketplace in the world, with 25,000 startups recruiting and about one million candidates. But the missing piece is helping companies find their early customers. And Product Hunt did an amazing job of that. They’ve now launched 90,000 products; they do millions of product discoveries every single month; and it’s kind of the place where teams from Uber and Facebook and Google and lots of startups go to launch their latest apps. So we were always in awe of Product Hunt and we brought them in to kind of complete the third leg of that triad.

Win $125 - Take the 2017 Canadian Alternative Finance Benchmarking Survey!

TC: It sounds like that could be a revenue-generating product, showing companies [needing products] who they should be talking to, what the various tech stacks are of different startups . . .

NR: Yeah, I think long term it can generate revenue. In the short term, we’ve left the team completely independent. They’re still executing on the same plans as before we merged up. And all the team and the management is still there.

TC: You also spun off a crowdfunding platform for non-accredited investors called Republic last year. Can you tell us a bit more about that and how involved you are?

NR: Crowdfunding is going to happen — it’s happening in the U.S. — it’s just happening a little bit slower than in the U.K. as [the U.S. government] works out the final [regulations]. And Republic is a spin-out that we did with some of our best people to go and start doing that. It’s still very early; Republic has done a couple of deals, but I think we’re still in the first inning of crowdfunding.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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