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1
Delineating Securities-Based Crowdfunding
Jonathan Sandlund
Jonathan Sandlund | jsandlund | As of 1122013
jsandlund
2
thecrowdcafecom leading provider of research data and analysis on the global crowdinvesting industry
about me
Jonathan Sandlundjthecrowdcafecom jsandlund
localinvestorsorg live think invest local
3
Thank you
Leading law firm serving the crowdfunding industry
TheCrowdCafecom Sponsors
4
rewards vs investmentReward-Based Investment-Based
Receive no financial return
Rewards Perks
Legal today
Securities offered in return for crowdsrsquo investment
Equity
Debt
Revenue share Royalty
Blended
The JOBS Act
Title II vs Title III
5Jonathan Sandlund | jsandlund
The Legalities of Investment Crowdfunding Title II amp Title III of the JOBS Act
The JOBS Act
6
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashcurrently NOT in effect)
Effectuated September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Proposed rules released Commenting period open through January 2014
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
7
Demo Days
8
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In Action
Startup Investing
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
2
thecrowdcafecom leading provider of research data and analysis on the global crowdinvesting industry
about me
Jonathan Sandlundjthecrowdcafecom jsandlund
localinvestorsorg live think invest local
3
Thank you
Leading law firm serving the crowdfunding industry
TheCrowdCafecom Sponsors
4
rewards vs investmentReward-Based Investment-Based
Receive no financial return
Rewards Perks
Legal today
Securities offered in return for crowdsrsquo investment
Equity
Debt
Revenue share Royalty
Blended
The JOBS Act
Title II vs Title III
5Jonathan Sandlund | jsandlund
The Legalities of Investment Crowdfunding Title II amp Title III of the JOBS Act
The JOBS Act
6
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashcurrently NOT in effect)
Effectuated September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Proposed rules released Commenting period open through January 2014
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
7
Demo Days
8
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In Action
Startup Investing
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
3
Thank you
Leading law firm serving the crowdfunding industry
TheCrowdCafecom Sponsors
4
rewards vs investmentReward-Based Investment-Based
Receive no financial return
Rewards Perks
Legal today
Securities offered in return for crowdsrsquo investment
Equity
Debt
Revenue share Royalty
Blended
The JOBS Act
Title II vs Title III
5Jonathan Sandlund | jsandlund
The Legalities of Investment Crowdfunding Title II amp Title III of the JOBS Act
The JOBS Act
6
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashcurrently NOT in effect)
Effectuated September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Proposed rules released Commenting period open through January 2014
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
7
Demo Days
8
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In Action
Startup Investing
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
4
rewards vs investmentReward-Based Investment-Based
Receive no financial return
Rewards Perks
Legal today
Securities offered in return for crowdsrsquo investment
Equity
Debt
Revenue share Royalty
Blended
The JOBS Act
Title II vs Title III
5Jonathan Sandlund | jsandlund
The Legalities of Investment Crowdfunding Title II amp Title III of the JOBS Act
The JOBS Act
6
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashcurrently NOT in effect)
Effectuated September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Proposed rules released Commenting period open through January 2014
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
7
Demo Days
8
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In Action
Startup Investing
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
5Jonathan Sandlund | jsandlund
The Legalities of Investment Crowdfunding Title II amp Title III of the JOBS Act
The JOBS Act
6
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashcurrently NOT in effect)
Effectuated September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Proposed rules released Commenting period open through January 2014
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
7
Demo Days
8
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In Action
Startup Investing
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
The JOBS Act
6
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashcurrently NOT in effect)
Effectuated September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Proposed rules released Commenting period open through January 2014
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
7
Demo Days
8
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In Action
Startup Investing
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Title II In Action
7
Demo Days
8
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In Action
Startup Investing
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
8
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In Action
Startup Investing
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
9
Title II In Action
Real Estate Investing
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
10
ldquoAs a result of the new SEC regulations effective today all of OurCrowdrsquos deals will be posted publicly for US investors on OurCrowdrsquos website as well as on social networks email and
through online and offline advertising and public meetingsrdquo
Title II In Action
Global Deal Flow
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
11
Brings dramatic efficiencies to private capital markets
Geographically indiscriminate
Creates frictionless access to deal flow for investors
Creates frictionless access to investors for businesses
Jonathan Sandlund | jsandlund
Title II Impact
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
12
Investment Crowdfunding The Mechanism
Jonathan Sandlund | jsandlund
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
13
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
14
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
15
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
16
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
17
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
18
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
19
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
20
Sohellip why is investment-based crowdfunding such a big deal
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
21
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
22
SmallKnot
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
23
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Platforms market segmentation
24
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Platforms market segmentation
25
1 Angellist482 Gust203 Seedups284 MicroVentures215 Seedinvest136 FundersClub107 RockThePost78 WeFunder129 Fundroom10 FundersClub
1 SoMoLend132 Bolstr53 Fundable74 Localstake145 Dealstruck106 LendingClub67 P2BInvestor118 Raiseworks99 Relayfund110 Prosper2
Startups SMBs Niche Generalist
1 HealthFundr292 VentureHealth163 Poliwogg134 HealthiosXchange155 ExplorationFunder116 Agfunder177 Fquare88 RealtyShares129 RealtyMogul910RealCrowd911Groundbreaker1212Crowdmason1513Collaperty814CircleUp1015ReturnOnChange1316WeSparkt617Slated718Pave519Upstart720Alumnifunder11
1 EarlyShares102 EquityNet103 ExemptCapitalNetwork24 FlashFunders25 Ibankersdirect136 ConfidentCrowd47 99funding68 IRAvest79 Crowdfunder810FundAmerica9311Axial Markets
Accredited Platforms
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Platforms market structures
5 25 100
Very High Curation High
No CurationModerate
50
lt5 100
acceptance rate
The Curation Spectrum
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success Fee + 10 Carry
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
The US Market
Investors Productization Investors Secondary markets Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
Concluding thoughtshellip
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
29
Global Snapshot Whatrsquos the data say
Jonathan Sandlund | jsandlund
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
30
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Macro-Data Selected Sample
31
Equity 180 Deals
$132 Million
Equity 83 Deals
~$26 Million
Debt 3142 Deals $294 Million
Equity 32 Deals
$33 Million
Equity 11 Deals $954k
Equity 23 Deals
~$25 Million Selected sample of platforms as of 12413
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
32
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
33
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
34
Crowd funding
Technical Disruption Entrance of the internet into private capital formation process
Cultural Disruption
A desire to connect more meaningfully with the
things we buy the things we do and the things we
invest in
Two mega-trends collidingInvestment Crowdfunding
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
35
Music
Travel
Retailing
Before After
Internet-driven Disruption Technical
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Nearly all service industries re-imagined by the internet
36But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
A fundamentally more efficient capital formation process
37
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
A fundamentally more efficient capital formation process
38
Technical
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Summed up
The first major change in security law in 70+ years
Invites the internet into the capital formation process
TechnicalTechnical Disruption
What it means
Processes moved online Efficiencies realized Incumbents with
traditional cost structures obseleted
New markets served
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
But itrsquos not just structural change driving the disruption
40
Cultural
Itrsquos also cultural
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
41
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Today little alternative to public markets
42
Tomorrow individuals empowered to invest in the the companies people and causes they believe in
Cultural
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Where are we
43
Time
Penetration
Market Adoption S-Curve
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
44
Jonathan Sandlund jsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
