CrowdBnkBest Practice in Digital InvestingApril 29th 2015

This Document has been submitted on a confidential basis solely for the benefit of selected, highly qualified investors and sponsors in connection with the private placement of securities and is not for use by any other persons. Neither may it be reproduced, stored, or copied in any form. By accepting delivery of this Document, the recipient agrees to return this copy to CrowdBnk if the recipient does not undertake to subscribe to the offering. Do not copy, fax, reproduce, or distribute this Document without permission from CrowdBnk.

Strictly Private & Confidential

2

• Background and recent history

• Crowdfunding evolution

• Introduction to CrowdBnk

• Best practice

• Case studies – Hambledon Vineyard and Gojimo

Agenda

3

A recent historyTimeline Developments1990s - early 2000s: internet enables online crowd funding

In 1997, band Marillion raised $60K online to fund US tour and subsequent albums

2000 Birth of ArtistShare, 1st reward based crowd funding website for music

Early 2000s Internet enabled giving goes mainstream with launch of Just Giving

Mid 2000s Emergence of micro-lending sites such as Kiva – small sums to developing world projects

2005 P2P lending takes off in developed world with launch of Zopa

2006 - 10 Kickstarter and Indiegogo brought rewards crowd funding into mainstream

Late 2000s - early 2010s Equity and P2B platforms arrive

4

• Statue of Liberty (1885) Joseph Pulitzer raised $100,000 ($2.3 million today) in just five months

• Brompton bikes (1975) Andrew Ritchie raised the money to build a prototype by pre-selling the

first 40 bikes Today Brompton is worth £25m

• Oculus rift (2012) Raised £1.5m on Kickstarter Facebook bought the company for £1.5bn two years later

• LumeJet (2014) Raised over £ 1.5m on CrowdBnk

Inspired by the past

5

Traditional financing to SMEs shrinking

• Asymmetric information flows lead to structural market failures

• Less willing on part of banks

• SMEs paying back loans and reducing overdrafts

Funding gap estimated between £50-£60bn in UK

• In 2011, alternative finance contributed £26.7m to SMEs. In 2013, it

contributed £332m and £840m in 2014

More than 5,000 SMEs have utilized alternative finance mechanisms since

2011

Crowdfunding evolution

Sources:http://www.berr.gov.uk/files/file53698.pdfChris Rowlands report 11/09 on provision of growth capital to UK SMEshttp://www.bis.gov.uk/assets/biscore/enterprise/docs/b/12-668-boosting-finance-options-for-business.pdfTim Breedon report 03/12 on sustainable non-bank financing for UK plc

6Footer area

• Regulated digital investment platform

• Technology/scale + good asset selection and best practise

• Investing in and fundraising for businesses in the ‘funding gap’

• Investments range from £500K to £10m

• Investors are mainly HNW/Sophisticated and institutional with an intelligent crowd alongside

A little about CrowdBnk

9Footer area

• Fund raiser and investor accessibility

• Reduced cost of capital and transaction

• Investor takes full upside; we take fees from businesses

• Transparency: we are not a VC fund and so let investors

take greater control of their investments

• Strip away the tech; this is investing as it always was

Best practice: industry themes

10Footer area

• Promotion without due diligence

• Crazy valuations

• Insufficient investor protection

• Transactional volume for its own sake

• The ‘fast & easy’ fallacy

Best practice: what to avoid

11Footer area

• Balance scale and quality

• This is no ‘spray and pray’

• We invest in every business that funds on our platform

• We are selective

• Funding conversion rate

• Long-term portfolio value

• Rigorous due diligence process

Best practice: how we do it

12

• Producer of English sparkling wine and also the cradle of

cricket

• 50 acres planted with Pinot Noir, Pinot Meunier &

Chardonnay

• Strong association with Pol Roger dating back to 1952

• Raising £2.75m on CrowdBnk for 8% coupon secured

convertible bond plus wine rewards (£1.6m raised so far)

• Hambledon is a fine example of a fast growing business

with an experienced management team, a great story and

a strong offer

Hambledon VineyardEngland’s oldest vineyard

13

• Aims to become premier digital global exam preparation app

• Lead investors Saul Klein at Index Ventures plus JamJar

Investment (Innocent Drinks founders)

• CEO George Burgess was last year labeled one of “Britain’s Most

Exciting Young Entrepreneurs” by Forbes

• 500,000+ downloads and 30,000+ active users

• CrowdBnk bridge round of £1.25m at £5m pre-money valuation

before Index leads bigger Series A

GojimoEdTech mobile app backed by Index Ventures

14

daniel@crowdbnk.com

www.crowdbnk.com

+44 779 320 1292

Thank you! Questions