GLOBAL TRENDS IN ENTREPRENEURIAL FINANCE

COLLABORATE | INNOVATE 2017

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SEEDLY IS AN EQUITY CROWDFUNDING PLATFORM… THE FIRST FOR ALL AUSTRALIANSWE WILL LAUNCH MORE BUSINESSES THAN ANY OTHER

WWW.SEEDLY.COM.AU

WHAT’S THE BIG PROBLEM?

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USA, $75

AUS, $7.5

Israel, $150

VENTURE CAPITAL $PER CAPITA

FUNDING66%

OTHER34%

AUSTRALIANSMALL BUSINESS

SOURCES: Australia Bureau of Statistics, Australia Innovation Report

WHAT STOPS INNOVATION?

HOW DOES AUSTRALIA COMPARE?

WHERE’S THE MONEY?

DILUTIVE SOURCES

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NON-DILUTIVE SOURCES

EQUITYCROWDFUNDING

ANGELINVESTORS

VENTURECAPITAL

STOCKMARKETIPO

CREDIT CARDBANK LOAN

PEER-PEERLENDING

DEBTCROWDFUNDING

MINIBONDS

CONVERTIBLENOTES

PARTNERS

SUPPLIER CREDIT

GRANTS

REWARD/DONATIONCROWDFUNDING

EQUITY DEBT OTHER

EMERGING TRENDS IN ENTREPRENEURIAL FINANCE

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1. The VC industry is shifting at the biggest and smallest ends of the market.

2. Online platforms—for crowdfunding, angel syndication, and lending—are increasingly important options for seed-stage and early-stage startup needs.

3. Sources of capital are emerging outside of traditional geographical hubs.

4. Women are playing more decision-making roles in entrepreneurial capital.

5. There is robust experimentation with differentiated capital models.

GLOBAL MARKET DATA

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$1.5TGLOBAL ENTREPRENEURIAL INVESTMENT FUNDS:

82% Personal (loans, lines of credit)16% Friends and Family2% Venture Capital and Crowdfunding

SOURCES OF FUNDS:

ALTERNATIVE FINANCE MARKET

• ness registrations (show that the demand is getting bigger

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ASIA PACIFIC (EX CHINA)

SOURCES: The Asia-Pacific Alternative Finance Benchmarking Report, 2016, Cambridge University

CHINA ($USD)

VENTURE CAPITAL GLOBAL RANKINGS

• ness registrations (show that the demand is getting bigger

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• Leading Venture Capital by region

• Venture Capital Investment often seen as a marker for innovation.

• Australia poorly ranked

• ness registrations (show that the demand is getting bigger

RESEARCH COMMERCIALISATION IN AUSTRALIA

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$1.8B in successful exits from Australian university research projects

Irish Drug Group, Shire,acquired Melbourne based drug developer Fibrotech Therapeutics (scar tissue therapy) for $500M

Drug giant Novartis acquired Brisbane based pain relief company, Spinifex for $1B.

Hatchtech (head lice tech) $280M deal with Indian firm to commercialise product.

TRENDS: EQUITY CROWDFUNDING / CROWDCUBE

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238Avg investors per

campaign (UK)

$762kAvg funds per campaign (UK)

Asia-Pacific Region (excluding China) Average Amount Raised in an Equity Crowdfunding campaign 2015 USD = $778,000 USDIn China, the average raised via ECF = $2.24m, Cambridge University

400kRegistered investors

525Successful raises

£1MIn 60 secondsFastest Raise

WHY EQUITY CROWDFUNDING

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"I CAN'T TELL YOU HOW BAD THE WHOLE AUSTRALIAN VENTURE COMMUNITY IS, THE ANGEL COMMUNITY IS, THEY ARE JUST NASTY”

GORDON BELLINTERNET & COMPUTING INDUSTRY PIONEER

27 DAYSAvg days to fund (UK)

£600k +Avg funds per campaign (UK)

49% ROI*Across 375 deals at Seedrs (UK)

400,000Investors members on Crowdcube

TAX BREAKS ACCESSMore investors, more deals

A SHORT HISTORY OF EQUITY CROWDFUNDING

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UKFirst ECF platform

launches 2011: Crowdcube

USA Opens broader ECF regulations

May 2016

NZ Opens ECF

regulations July 2014

AUSECF regulations

proposed in parliament 2015

£147million

UK ECF market 2015

AUSECF regulations go

live, Sept 2017

2011 2015 2017

WHERE NEXT?

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CROSSOVER

SERVICE MODELS

SECONDARY ECF MARKET

RAPID SHORT TERM FUNDING

CASE STUDIES

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BREWDOG - THE FIRST UNICORN EXIT

2,765%RETURN

$1.24BILLION VALUATION

(USD)

CASE STUDIES

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CASE STUDIES

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CREATE A WINNING PITCH

• What problem do you solve? For who?

• How do you make money?

• What traction do you have?

• Why are you different?

• Who’s in the team?

• What are their roles?

• What skills, experience set you apart?

• What advisors & partnerships do you have?

• How big is it? What are the trends?

• What’s your go to market strategy?

• Competitors (Porters 5 forces)

• PESTEL analysis

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THE IDEA

THE TEAM THE VIDEO

• Be direct & concise

• Be personable

• Be specific & give examples… eg ’46% faster than competitors processes’

• The first thing many investors look at

• Make it professional, make a connection

• You’ve got 30 seconds to win them over

• Don’t go longer than 3 minutes

• If you can’t afford motion graphics & animations, put a (good) person on camera

• First impressions count, be professional

• Strong logo and website

• An active Facebook and Twitter presence

LANGUAGE

YOUR BRANDTHE MARKET

THANK YOU

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WWW.SEEDLY.COM.AU/CRC2017

An overview and comparison of new forms of entrepreneurial finance

New player Debt or equity Investment goal Investment approach Investment target

Active or passive Non-financial support

Accelerators (and incubators)

Depends on type of accelerator/ incubator

Financial, strategic, political (depends on type of accelerator/incubator)

Active Management support, training, network access

Early stage start-up

Angel networks Equity Financial Active Management support, network access

Early stage start-up

Crowd

- Debt-based Debt Financial Passive None Early stage start-up or project

- Donation-based – Social Passive None Social venture or project

- Reward-based – Product-related Passive, Sometimes active

Sometimes product testing

Early stage start-up or project

- Equity-based Equity Financial Passive, sometimes active

Advocacy, market & product testing

Dependant on legislative rules. Typically early stage start-up or Series A growth stage.

Corporate venture capital (CVC)

Equity Financial, technological, and strategic

Active Management support, technology support

Early and later stage start-up

New player Debt or equity Investment goal Investment approach Investment target

Active or passive Non-financial support

Family offices Equity Financial Mostly passive Little Later stage start-up

Governmental venture capital (GVC)

Debt or equity Financial and governmental Mostly passive Little Early and later stage start-up

IP-based investment funds

– Financial Passive None Patents

IP-backed debt funding

Debt Financial Passive IP-based start-ups and established mid-sized firms

Mini-bonds Debt Financial Passive Established mid-sized firms

Social venture funds or social venture capital

Debt and equity Financial and social Active Management support, network access

Social ventures

University-managed or university-based funds

Mostly equity Financial and university-related Active Management support, network access

Academic and student start-ups

Venture debt lenders or funds

Debt Financial Passive None Later stage start-up

Source: Block, J.H., Colombo, M.G., Cumming, D.J. et al. Small Bus Econ (2017)