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Crowdfunding and the Entrepreneur 11.7.2013
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1
Equity Crowd Funding
Gadi Mazor, General Partner and CTOOurCrowd
Capital Raised – Israel
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
500
1000
1500
2000
2500
Israeli VCs Foreign & Other
70% growth and return to 2008 levels
$ (
million
s)
SourceIVC Research Center 2012
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2011 Q2
2011 Q3
2011 Q4
2012 Q1
2012 Q2
2012 Q3
2012 Q4
0
100
200
300
400
500
Series A Deals Seed Deals
# US startup financings – CB Insights 2013
The divergence’s size is remarkable. In Q3 of 2012 alone, there were 300+ more seed deals than series A fundings.
Meanwhile, commitments to venture funds are down, VCs are shrinking in both deals and $ amounts.
Where can smart
investors get behind these unfinanced
deals?
Seed deal explosio
n
Series A funding
Series A Crunch
4
Equity Crowd Funding
5
Growth in crowdfunding by type:
• #1 Reward-based• 524% CAGR growth
• #2 Venture capital-type crowdfunding
• 114% CAGR growth
• #3 Consumer lending (peer-to-peer lending)• 78% CAGR growth
• #4 Donation market• 43% CAGR growth
“2013’s growth will be driven by… equity based crowdfunding”- Tech Crunch 5/2012
Crowdfunding on Fire
6
OurCrowd’s Focus
“How can I best invest in the
Start-up Nation?”
7
Through VC or as an Angel
• Exposure to top dealflow• Professional due diligence• Legal issues/termsheets
handled by firm• Preempive/other rights
• Independence, self-selection
• Low fees• No large upfront
commitment• Relative speed and ease
OR
Investors’ traditional dilemma
BUTBUT
• Large Commitment• Hefty management fees,
carried interest fees• No control, no choice
• Very limited dealflow• Term sheet negotiations• Limited due diligence
capabilities• No protection, no rights
Venture Capital Angel Investing
8
OurCrowd
A Hybrid VC – Angel Investment Model
OurCrowd provides the professionalism and experience of a venture fund and the flexibility and
choice of angel investing.
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OurCrowd - Investors
• Access to quality dealflow• Professional diligence and negotiation – rights protected• Limited to accredited investors• Aggregate investors into one entity• Manage investments, take board seats, support companies• Operate legally under today’s regulations
10
OurCrowd - Entrepreneurs
• Angel money – all futures possible• Deep pockets• Streamlined process• Support of a venture fund• The crowd supports the company
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How the Process Works
200+ potentialdeals per month
Screening by investment team
Meetings with
management
Ongoing in-depth diligence
Prep
• Large volume of quality dealflow
• Startups from across the Israeli tech sector
40+deals
20+deals
5-10deals
2-3deals
Deal
#1
Deal
#2
web email referral proactive sourcing
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The 6-point OurCrowd Approach
1.Great team: Successful startups are founded by great people. We pay special attention to successful serial entrepreneurs
2.Market: The startup must address huge market growing like a weed. No arcane ideas addressing niche markets.
3.Easy to understand: We look for investments with a simple value proposition Easily understood by us AND by “our crowd”. We like technology, but we like real value added solutions
even better
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The 6-point OurCrowd Approach
4. Traction: Investing in early stage companies, but not just ideas or pre-prototype We want to see an early version of the product Traction can come in many forms: users, customers,
partners, revenues
5.Sponsorship: Investing in startups/building early stage companies is a team sport The right board, advisors, strategic partners or angels is
critical. We think partnering with other smart investors is a big
plus.
6.We seek “deals” and are value-sensitive
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Our TeamJon Medved- Washington Post: "one of Israel’s leading high tech venture capitalists”- 12 exits >$100M- Co-founder, CEO of VRNG- Founder & GP at Israel Seed Partners, $260M managed
Elan Zivotofsky- 15yrs experience in Israeli investing- Managing Partner at Prelude Israel- Former Head of Technology Banking, Lehman Brothers Israel- Top-ranked Israeli tech research analyst for Goldman Sachs
Steven Blumgart- Co-director of Glencore's aluminum division- Senior executive, management committee at Glencore 1998-2012
Pini Lozowick- General Partner at Alta Berkeley- Among first employees at Broadcom, Dir. Marketing- Chairman of Provigent- Founder and GM of Verisense- 5 exits = total value $3B
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Our Team
Robbie Citron, CFO- 25 years of experience- Partner and CFO of Jerusalem Global Ventures- Financial Controller and Company Secretary of Hanson PLC’s Israeli branch
Evelyn Rubin- JVP – focus on semiconductor industry- Senior editor Seeking Alpha- Cipher IT- Business development at OurCrowd
Audrey Jacobs- M3 Solutions - marketing- PR international advocacy organizations- VP Investor Relations at OurCrowd’s first US office
Gadi Mazor- Serial entrepreneur- Founded 3 wireless companies- Advisory board for Blackberry- Talpiot 8200- Wireless advisor to US Senate
Crowdfunding challenges - May 2013
16
Our Team
Liora Katz- Israel Seed Partners- Founding team at VRNG- Founding team at OurCrowd
David Arnovitz- Founder, VP R&D @ S1- Cofounder, Pres. SecureWare- VP Ops @ Shalem
Jay Kalish- CEO Patir Tech- VP IR @ Allot- General Counsel @ Teledata- General Counsel @ e-SIM
Zack Miller- VP BizDev at Seeking Alpha- Leadership positions with Lending Club, LearnVest, Covestor, and SigFig- Author of Tradestream Your Way to Profits (Wiley, 2010)
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Press Coverage
“5 Most Important New Companies”
Forbes Online | April 2nd
“An Israeli company trying to change the way startups are funded”
CNN Business 360 | April 30th
“The investment team at OurCrowd
rocks”The Next Web | February
6th
“The most interesting investment of the week goes to OurCrowd…
brought together ten seasoned investment pros to create a
crowdfunding hybrid to back Israeli startups.”WSJ| February 8th
18
Press Coverage
“How do you invest in Israel without a lot of money? Try crowdfunding venture capitalists”
IBT | March 22
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Fireblade: biggest crowdfunded round
everApril 2
“5 Most Important New Companies” –
ForbesApril 2
1000+ accrediteds
May 5 $11M+
May 5
Milestones
February
May
Marc
hApril
Launch
Feb 5
$10MApr 20
325+ unique commitments
May 14First US
company funded – $1M+March 5
First follow-on
financingMarch 15