Category Archives: Crowdfunding International

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.

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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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Ulule wants to be the “best” crowdfunding platform instead of the biggest

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Betakit | | May 10, 2017

If you’re in North America but outside Quebec, it’s entirely possible that you’ve never heard of Ulule. That’s not to say that this crowdfunding platform isn’t worth noticing. With a focus on quality rather than volume of projects funded, Ulule has an impressive 67 percent success rate: quite a contrast to the 31 percent on Kickstarter or 13 percent on Indiegogo.

“Our mission is not to make the biggest crowdfunding platform in the world. It’s to make the best crowdfunding platform.”

This past Thursday evening, Ulule celebrated its second anniversary in Montreal with a panel about crowdfunding, and a party in their new loft space. This office, in the startup-heavy Mile End neighbourhood, not only includes physical space for the Ulule team, but a seating area where projects using their platform can work under the guidance of the company’s “success managers,” along with an events space for product launches and community events.

“Our mission is wider than only a web platform,” said co-founder and CEO Alexandre Boucherot. “The needs of creators and entrepreneurs are much wider. It’s important, in our opinion, to try and invent ways to give them the best chances of success.”

Founded in France in 2010, Boucherot brought Ulule to Montreal to see if the same things that made the platform successful in Europe would translate to the Quebec market.

“We have a big focus on the coaching of projects, and the success of the project,” Boucherot told BetaKit. “Our mission is not to make the biggest crowdfunding platform in the world. It’s to make the best crowdfunding platform. And we think that crowdfunding platforms are not only about funding, but about success: finding a market, finding a public, a community.”

See:  Ulule launches The Big Step and will contribute $30,000 to high-potential France/Canada initiatives

By vetting and coaching all projects, Ulule is able to ensure that many more of their users reach their goals.

With a team of 45 people based primarily in Europe (seven in Montreal), and having been certified as a B Corporation in October 2015, the company hopes to continue their growth, while maintaining their goals for positive social impact.

They have partnered with National Bank to create a competition called Le Grand Sault (The Big Step) that gives an additional $30,000 to three projects based in France or Canada ($10,000 each). Last year’s winners included Le Geebee, an electric bike/scooter hybrid; Le Kit du Jardinier-Maraîcher, a film project that documents the daily activities of an urban farm; and Loupp, an ethically made weekend bag.

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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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Equity crowdfunding is 1 year old today, Wefunder is top platform

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VentureBeat | | May 16, 2017

Since Regulation Crowdfunding began on May 16 last year, 335 companies have filed offering documents with the Securities and Exchange Commission (SEC) to fundraise on securities-based crowdfunding platforms. Of those companies, 43 percent were funded, 30 percent failed, and the remainder are still open and trying to get funding.

The total capital committed to date on these platforms is in excess of $40 million, with the average successful crowdfunding campaign raising around $282,000 from about 312 investors. The most recent quarter saw the greatest number of companies file with the SEC. This signals that issuers might finally be catching on to the opportunity that Regulation Crowdfunding holds.

And what about the portals that have emerged to host these fundraises? Of the 26 portals registered with FINRA to help companies sell Regulation Crowdfunding securities, nine have already closed, gone out of business, or been shut down. Of those remaining, Wefunder (based in San Francisco and Massachusetts) is leading the pack both in the number of deals and total dollars raised. They have been in business since Regulation Crowdfunding went into effect and have helped 63 companies pull in almost $18 million. Start Engine (in Los Angeles) ranks second with 27 campaigns funded, and Microventures (Austin), NextSeed (Houston), SeedInvest (New York), and Republic (New York) rank third through sixth. Interestingly, the location of these platforms also matches the states that have raised the most capital.

Several platforms (both old and new) have only funded a handful of campaigns. This may signal that brand awareness and marketing by the larger incumbents is driving both companies seeking capital and investors looking for deal flow.

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

However, If you dig a little deeper and look at the capital raised during the last three quarters, you will see in that while Wefunder is leading in overall dollars, both Microventures and Start Engine are not far behind in terms of quarterly commitments (see Orange bar to compare Q1, 17 results).

"I expect to see Indiegogo put more time and energy into converting its most successful rewards campaigns into equity campaigns on Microventures."

Microventures, the offshoot of rewards-based crowdfunding platform Indiegogo only launched at the end of last year and is already showing strong results, with 100 percent campaign success. While the platform hasn’t run many campaigns, the campaigns it has run have raised slightly more success than those on Wefunder.

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

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The Economist | May 17, 2017

Everyone would like a piece of the next Google or Facebook. But the big venture-capital (VC) firms do not usually raise money from small investors. And some entrepreneurs complain that it is hard to get noticed by the hotshots in the VC industry. Hence the enthusiasm for crowd-funding, where small investors can buy a stake in startup companies.

Seedrs, a British crowd-funding firm, was set up in 2012, and has backed 500 firms so far, raising a total of £210m ($271m) from more than 200,000 users. But there are two big problems with crowdfunding. First, it is risky: most startups fail. Second, investments tend to be illiquid—shareholders have to wait for a takeover or a stockmarket flotation to recoup their investment.

See:  Seers Announces First-ever Portfolio Results With Overall 14.44% IRR (Annualized Rate of Return)

Seedrs is trying to solve the illiquidity problem by setting up a secondary market, where buyers and sellers can exchange shares. The new market will start operating this summer, and will allow trading for a week every month, starting on the first Tuesday. The price at which investors can deal will be set by Seedrs itself, based on a valuation mechanism in line with industry guidelines. But there are some restrictions: only current investors in a firm will be allowed to buy shares. And, to the extent that investors make a profit, Seedrs takes a 7.5% cut of the gains.

"An obstacle to crowdfunding is that investors have to wait so long to sell their shares"

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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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Women & Minorities in Regulation Crowdfunding: High Success Rate Despite Low Representation & Lower Funding Levels

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Crowdfund Insider | | May 2, 2017

Regulation Crowdfunding finished its fourth Calendar Quarter this past March and the data shows that women and minorities have a higher percent chance at hitting their minimum funding target but represent fewer campaigns and receive less capital.

While the overall market is beginning to show signs of traction with over 265 companies trying their hand at Regulation Crowdfunding, the clear majority of them are founded by teams of white men. Given the opportunity for Regulation Crowdfunding to provide on average $300,000 to funded campaigns, this represents a missed opportunity for women and minorities who often find themselves alienated from the capital markets.

Regulation Crowdfunding allows any American startup or small business to raise up to $1,070,000 million from friends, family and followers on debt and equity crowdfunding platforms registered with the Securities & Exchange Commission (SEC).

Just like on donation or rewards sites, issuers launch Campaigns and use their social network to invite people to review their business plans, market opportunity, financial statements and video pitch. However, instead of getting a token of appreciation or a widget, backers get shares in a business or interest repaid on a loan.

See:  SEC Updates JOBS Act Amendments Including Reg CF Funding Cap

Since the launch of Regulation Crowdfunding on May 16, 2016, 265 companies have filed with the SEC. Of those companies, 50% were successful in hitting their minimum funding target and $25.4M was funded to those companies.  With the average campaign lasting only 93 days, compared to the many lengthy and cumbersome alternatives like applying for an SBA loan or seeking VC money, Regulation Crowdfunding seems to be a viable alternative. However, this seems to be true if you are a white male and have more than one founder.

  • Digging into all the offerings, 165 campaigns (62%) were started by White male founders, 43 where there was at least one woman founder, 26 where there was at least one minority, 8 that were run by women-only founders, 14 by minority-only founders and 10 by founders that were both women and minorities.
  • Adding it up, women and minority led companies only represented 37% of all offerings.
  • When filtered for only successful campaigns, 82 companies hit their minimum funding target, closed their offerings and received their funds. Of those 82 only 7 companies were founded by ‘women only’ teams, 6 by ‘minority only’ teams and 1 by a team of ‘one woman and one minority.’ The other 68 were by founders that were white men.
  • When looking at success percentages, campaigns run by women-only founders had an 87.5% success rate compared to 41% for men-only founders. Minority-only founders also had a higher success rate (46%) than men-only founders.

Given the high success rate (particularly compared to VC funding), it is surprising that more women and minorities don’t give Regulation Crowdfunding a chance.

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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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Fineqia Partners with JOI Media’s Katipult for Technology Platform

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Fineqia International Inc.  Release | Karolina Komarnicka | April 11, 2017

Fineqia and Joi Media release banner

VANCOUVER, April 11, 2017 /CNW/ - Fineqia International Inc. (the "Company" or "Fineqia") (CSE: FNQ) is pleased to announce that it has partnered with Canada's JOI Media Inc. ("JOI") to use its technology platform to start Fineqia's U.K. business that brings crowd investors some of the most lucrative and risk‑mitigated opportunities that have been mostly the privy of large financial institutions.

Fineqia will use JOI's proprietary crowdfunding software product Katipult, named as one of Canada's most innovative financial technology enterprises by the Royal Bank of Canada. Katipult's white‑label platform is transforming how equity and debt private placements are funded by giving crowdfunding platforms the tools to grow and efficiently manage investor networks as well as streamline deal flow administration. The crowdfunding software facilitates the entire investment process from deal origination to investor tax reporting.

"Katipult helps us get into the market quickly and cost effectively," said CEO Bundeep Singh Rangar. "We can focus on our core debt and equity placement activities while Katipult ensures we are always on the cutting edge of compliant technology innovation."

Katipult recently introduced BlockChain into its product offering that will support Secondary Market Crowdfunding that is unforgeable and inherently trustworthy. When an offering is closed that will be secondary market eligible, a blockchain token will be created that represents this security.

"We are proud to be working with Fineqia as their technology provider.  Private capital markets are changing and there is a massive opportunity for firms that recognize the industry is shifting online," said Brock Murray, CEO of Katipult.  "Through our partnership, Fineqia is leveraging innovation to provide risk mitigated investment opportunities to investors and that is a very encouraging mandate to be a part of."

Katipult has developed crowdfunding platforms for more than 20 countries to date that are multilingual and compliant for local jurisdictions in Canada, the U.S., the U.K., Europe and Asia. Its clients include MaRS Discovery District, Qatar Development Bank, US Debt Ventures, and The Formax Group.

See:  Fineqia Announces Chairman of the Board: London Stock Exchange AIM’s Ex-Head

Fineqia's minibond platform matches quality debt and equity investment opportunities with high-net worth, institutional investors and family offices. It gives investors information advantage, and most importantly, a way-in into institutional debt deals, highlighting the risks and objectively outlining opportunities involved. The platform applies high selectivity to the offerings displayed, with only a few of the highest quality deals being shown at any given time.

About Fineqia International Inc.

Fineqia's business model is to provide an online platform and associated services for the placement of debt and equity securities, initially in the UK. The platform will transparently highlight the risks and objectively outline opportunities involved.  For more information, visit www.fineqia.com.

About JOI Media Inc.

Headquartered in Calgary, Canada with locations across three continents, JOI Media is a global leader in enterprise software and software related services. They work with reputable organizations across the private, public and social sectors.  For more information, visit www.joimedia.com.

About Katipult

Katipult is a crowdfunding software solution for private capital markets for private placements, investment crowdfunding, investor management, and listings. Katipult allows companies to design, setup, and manage an investment crowdfunding platform across multiple distribution channels including web, mobile, and social media. For more information, visit www.katipult.com

NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATORY SERVICE PROVIDER HAS REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.

SOURCE Fineqia International Inc.

For further information: Karolina Komarnicka, Chief Marketing Officer, T: +1 (778) 654-2324, E: info@fineqia.com, W: www.fineqia.com

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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