Mobile World Congress Grow VC Emerging Funding Models

Grow VC Group ++
www.growvcgroup.com ++
@growvcgroup ++
Innovating Investing ++

Mobile World Congress – Emerging Funding Models
Jouko Ahvenainen / February 28, 2013

Copyrights © Grow VC Group 2013

Grow VC Group ++


Group History ++

•  2009 Grow VC Company was created
o  to build #1 global equity crowdfunding online platform under
www.growvc.com domain

•  2010 growvc.com service was launched
o  pioneer in equity crowdfunding

•  2011 Company expanded
o  team of 50+ people spread across the globe
o  develop the business globally within the equity crowdfunding
market segment.
o  online platform was developed extensively to meet global and
local startup ecosystem requirements and startup lifecycle
thinking

Group History ++

•  2012 Grow VC to Grow VC Group
o  Grow VC Networks model was launched as public BETA.
o  along with the JOBS Act passing in the US adding clarity to
emerging market, a bigger strategy switch was done to add
focus on all of the company activities
o  the company was restructured to Grow VC Group with several
different business units, companies and operational teams

•  2013 Acting as Grow VC Group with independent units
o  all units focus on executing their own business in their
specific business area
o  Grow VC Group reputation and synergies between units are
utilized where relevant


Entities ++

Finance and Services Infrastructure Investment Portfolio


Core Businesses 2013 ++

Grow VC Group Crowd Valley
Strategic partnerships and group Turn key solution to start
investment portfolio management crowdfunding for any assets, equity or
lending www.crowdvalley.com
www.growvcgroup.com

growvc.com
Grow Advisors Startup ecosystem platform and
leading global marketplace to invest
Consulting and investment bank type money or work in early phase startups
services for crowdfunding ecosystem www.growvc.com
www.growadvisors.com
ChangeLab23
Design & build digital product, where
Mutual Seed Fund
customer experience is at the heart
Crowdfunding co-investment fund, www.changelab23.com
works with many crowdfunding
services www.mutualseedfund.com


3rd Parties can start crowd funding p2p investment
market place on our platform ++

Full solution: investment community, tools, payments,
backoffice and reporting – set up in a minute

Building Crowd Funding Globally ++

§  The team has invested three years into the crowdfunding industry
globally, and positioned itself in the ecosystem globally "
§  The team has been part of the US Delegation in Transatlantic Economic
Forum, had cooperation with Singapore Government Investment
Company, "
§  UK Trade and Investment, and is a founding member of Crowdfunding
Regulatory Intermediary Association (CFIRA), Crowdfunding
Professional Association (CFPA), National Crowdfunding Association
(NLCFA), European Crowdfunding Network, cooperation with Securities
and Exchange Commission (SEC) and Financial Industry Regulatory
Authority (FINRA) "
§  We have a jumpstart on any direct competition with 400+ existing
business customers, ranging from small communities to large networks
of communities like the World Bank "


Case: Cintep, Australia ++

First $100,000 from crowdfunding, excellent progress since then"


Case: The Tip Card, Australia ++

Money and resources (Work Investments) thru crowdfunding"


Startup funding ++


10 Points about startup funding ++

1.  Since 2008 it has been especially difficult to raise money to VC funds
2.  Traditional VC funds starts with approximately USD 2M investments
3.  Basically all countries look for new growth and see that traditional industry is not
enough
4.  When VC’s have had issues to raise more money, it also cause issues to fund
companies that are already in their portfolio
5.  Capital efficiency has increased, i.e. startups can start with smaller capital
6.  Many governments and local organizations invest to build better startup ecosystems
locally and also want to participate in funding or attract investors to operate
locally
7.  Crowd funding and ‘open market places’ are emerging
8.  There are also more local business angel networks, and e.g. governments have
created some tax schemas to attract more people to invest in startups
9.  There are several new models to get money, like crowd funding, angels, local
support, and incubator programs. But issue is also, how to get these to work
together
10.  Many startups focus very much towards the US, when it has offered the best
funding and exit market. At the same time emerging markets could offer e.g.
easier routes to make revenue and organic growth. Copyrights © Grow VC Group 2013

New finance regulation ++


Peer-to-peer
Less fat middle-men


global
transparent
open
collaborative
efficient
scalable


A new language:
Read & write, participatory, conversational:
markets are conversations, marketing is a
conversation, business is a social science!

Co-creation + networked
economics + communities of
interest can be and are,
proven & powerful platforms
and processes to stimulate
innovation and commerce


A
cultural
challenge

…for corporates
…for governments
…for human beings


To resist will
lead to
ﬁnancial and
organizational
exhaustion


Crowd Funding and Ecosystem ++

•  It is typically important to get crowd funding to
work with other investment models
o  Get other investors and money
o  Help to manage investments
o  Continuity for the next funding rounds
•  Investors can also offer other value added
•  There can be several co-investment models,
passive or active
•  It is typically important to build co-operation
with business angels, VC’s and incubators

Several Investment Models ++

1.  Direct investments
o  An investor invest directly in a company, become a shareholder,
company can have hundreds of small shareholders
2.  Investments through an instrument
o  An investor can select a company he/she invest in, but the actual
investment is done by an investment company that aggregate all
investments together, the investment company is the shareholder
3.  Crowd funding of investment instruments
o  Crowd funding model is used to raise capital in a fund and the fund
makes investments
4.  Co-investment models
o  Different models to make co-investments with crowdfunding


Grow VC co-investment models ++

•  Co-investors can be e.g. business angels, VC’s, or funds

1.  Co-investment partners
a.  Partners follow p2p, typically no automated investments, but use
crowd to filter investment opportunities
b.  Leading investors offers cases to crowd, and crowd follow them
2.  Syndicate models
o  Can have two models as above, but formalized co-investment
models with pre-defined models, shares and responsibilities
3.  Built-in investment instruments
o  Investment instruments that are built to work with the p2p
investments, e.g. automated co-investment
o  The instruments can be like traditional funds or modified versions


Mutual Seed Fund ++

•  Grow VC is building a special co-investment
instruments
•  The instrument and concept is built especially for the p2p co-
invesments
•  The instruments are built to work with p2p models,
crowd can filter cases, or p2p bring leverage to fund
investments
•  Investors can join the instrument online, by defining
their investment criteria like total sum and the number
of companies (diversification)
•  The instrument is launched in six months


Future ++

•  Peer-to-peer is here to stay, equity crowd funding is
just starting to grow
•  P2P is not to replace all other models or solution for
needs
•  It is crucial to build an ecosystem where different
investment models work better together, including p2p
– new solutions are needed
•  P2P is not only for startup funding, it will have
influence on the whole finance sector to make it more
effective


“You don’t have to be
Steve Jobs, to be
an entrepreneur”


”You don’t have to be
Bill Gates to be
an investor”


”Everyone must start
somewhere”


Jouko Ahvenainen
jouko@growvc.com
+44 7889 833 165 (UK)

Innovating +1 646 363 6664 (US)

Grow VC Group ++
Investing www.growvcgroup.com ++
@growvcgroup ++
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Mobile World Congress Grow VC Emerging Funding Models

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