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EQUITY CROWDFUNDING
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MIA Crowdfunding Seminar
January 28th, 2015
crowdonomic.vc @Crowdonomic Facebook.com/Crowdonomic
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Crowdonomic Overview: Largest Crowdfunding Platform in SE. Asia
Business Summary • Launched in Jan. 2013
• Fin-Tech business
• Full Crowdfunding (CF) portfolio
• Asia-play
Performance • Quarterly growth rate: > +40%
• Internationally competitive
• Industry pioneers / Thought Leaders
Platforms and Collaborations • Own platforms
• Crowdtivate – Starhub collaboration
• EarthHourBlue – WWF Global platform
• Strategic Advisory + Ops know-how
Organization • Fin-Tech experts
• SG, MY – building in Indonesia
• Respected Shareholder and Advisory group
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A class team with >30 years fin/tech experience
Senior Consultant
Asia Strategy Lead
MBA BA. Law
Senior Consultant
Interest rate Trader MBA Engineering
Reona ShimadaCo-founder & CEO
Nicola CastelnuovoCo-founder & CCO
S.E. Asia
Innovation
S. Korea
Finance
China
M&A
South Asia
Tech
Japan
Strategy
UKS.E. Asia India
Tech
W.EuropeNorth Asia
Finance Operations InnovationInvestment
Experience and expertise
Your Issue: Efficient Access to Capital is #1 Obstacle to Growth
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of Micro-SMEs (Start-ups+SMEs) in Asia say access to finance is their largest obstacle to growth
Source: IFC/ Worldbank Enterprise Survey 2006-10; World Bank GDP 2008 - 2010
40% #1
Crowdfunding… This is Finance 2.0 What it is: Crowdsourcing for venture capital
How it Works: Fundraising accelerated by the power of social media and harnessing the wisdom of the crowds
Fill standard offer templates
Publish Online
Advertise via social media
Access virtual investor community
Reach $ targetGrow your business
Smaller amounts of money from many people to reach higher targets
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Publish Offer PageAccess virtual
investor community
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Acceleration Validation Traction
ECF: Fundraising accelerated by the full power of web, social media and technology
It will change how Start-ups raise Venture Financing
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Efficient outreach to multiple investors via internet
Startups
Low – mid digit FRsRecord millions
8 -12 weeksAverage online fundraise period
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Technology Consumer/Retail Real Estate Fund
• MedTech robotics firm
• Raised S$4.2 M on OurCrowd
• IPO’d receiving S$46.2 M in net proceeds
• F&B Chain in UK
• Raised S$4.3M on CrowdCube
• Pool of 749 investors – accredited and retail
• Crowdfunding for a hotel in Palm Springs
• Raised S$1.9M on RealtyMogul
• Pool of 85 accredited investors
• Prolific early-stage venture fund
• Crowdfunding $100M fund with SeedInvest
Emerging Crowdfunding Verticals
No reported cases of Fraud
Shareholders can be bundled up into a
vehicle
Investors are also chosen; Use lead investors to
inform market
You can control the level of information disclosure
“I’ll be stuck with managing Thousands of Shareholders (and
forced to IPO)!” “High Risk of Fraud”
“Competitors will steal all of my information”
The Market will be over-flooded with NVA Capital creating a
bubble
Many concerns and challenges are being addressed as the industry evolves
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Malaysia is home to high growth startups
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Anthony Tan, Founder and CEO of Grab Taxi
Funding Rounds• $15M – May 2014• $65M – Oct 2014• $250M – Dec 2014
Traction• Dominating
Southeast Asia’s taxi app space in 2 years
• 2.5 million downloads
• 3 taxi bookings made every second
…but startup investing has been limited to the top 1%
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1. Access to deal flow of high quality startups is typically limited to professional investors
2. Regulations prohibit startups from advertising their fundraising to the greater public
3. Not everyone who has investable capital can invest in startup due to minimum ticket size required
Platforms give investors a new way to build a startup portfolio
Without an online platform, building a portfolio is time
consuming
ECF will be a game changer for investors
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Easily make bite sized investments in high quality
startups to diversify portfolio
Centralized sourcing platform with transparent due diligence
process
Access to industry experts and follow experienced co-investors
Need to build up reputation to access competitive investments
Time consuming to find and assess startups to invest in
Need extensive knowledge in industry you are investing in
What’s the upside to startup investing?
Case Study: Rewalk
Equity Crowdfunding: investors put in $3.39 M for 5.4% ownership
Return: 300%-500% in 14 months*
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• Invest in the next big thing before it becomes big• Potential to get disproportionate returns
Source: h4p://www.crowdability.com/arAcle/detail/912/116-‐returns-‐in-‐only-‐5-‐hours-‐peanuts
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Invest in scalable companies that
have potential to achieve returns
of 20x in 5-8 years
Look for founders that can sell and build,
and have these qualities:
intelligence, energy, integrity
If you don’t have the expertise, invest
with experienced angels who do
Invest in an industry you know and understand well
How to choose which startups to invest in?
INDUSTRY CROWD WISDOM
SCALE TEAM
How much should you invest?
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No more than 10% of your investable assets. Balance with conservative, lower risk investments.
Don’t invest more than you would be comfortable losing
Non-Professional Investors can invest up to RM 5,000 per company*
(*) Proposed regulations pending parliamentary approval
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All major markets in Asia are now at various stages of implementing CF targeted legislation
Countries in Asia debating Equity CF regulatory frameworks New Zealand Live Apr. 2014 – Equity / Debt CF
Malaysia Target Q2/Q3 2015 – Equity CF
Japan Target mid-2015 – Equity CF
India Proposal review – PCP* ended
Australia Proposal review – CAMAC
Singapore Under review - TBD
China Under review - TBD
Hong Kong N/A
Thailand SEC Public Consultation Paper released in December 2014
Source: Crowdonomic Analysis; Competitive Intelligence; Literature search* PCP: Public Consultation Process
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What to expect: ECF Regulatory Framework
(*) Note: Contents in this page are based on SC ECF Public Response Paper and they are still pending parliament final approval. Source: http://www.sc.com.my/wp-content/uploads/eng/html/consultation/140925_PublicResponse_2.pdf
Who: All Malaysia incorporated private companies + SC Registered Micro Funds
How much: Private Companies (RM 3 mn / RM 5 mn) + Micro Funds (uncapped)
Offer: Primary (new share sale); Secondary (existing shares; 2 wks per 6 months)
Advertisements: May advertise to the public but ONLY via the ECF platform
Investors: Retail (RM 50k) + Angel (500k)+ Sophisticated Investors (Uncapped)
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Recap
• Secret sauce… Social Media (Distribution) + Democratic Participation
• Fundraising: Difficult and inefficient = > ECF: New way to do a difficult thing
• Malaysia – a pioneer market, power to Start-ups
• Combine with Lead Investors + Conventional best practice
• Promote, Market and Execute…make full use of this New Freedom
www.crowdonomic.vc
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Contact Us
www.crowdonomic.com!!@crowdonomic!!www.facebook.com/crowdonomic!
Leo Shimada (Co-Founder / CEO) – [email protected] / (65)82236018!
Nicola Castelnuovo (Co-Founder / CCO)– [email protected] / (65)90056541!