Friday, September 7, 2012
• (UK) BIA, the UK trade association representing biotech firms calls on the UK government to provide tax incentives for citizens who invest directly in startups and for the government to streamline crowdfund investing regulations. Based on data from France, who implemented a similar scheme (minus crowdfund investing) under Sarkozy (and is now cancelled under Hollande), the BIA's excellently done report estimates that the proposal would raise £300mm of growth capital for innovative startups and create 1,500 well-paying jobs.
• (US) One crowdfunding website gets press in Time for planning to launch their site with a campaign to fund the production of a hologram of Ronald Reagan speaking. (via reader Tony R.)
• (US) Update: The WikiWeapon project, which I mentioned in this weekly roundup a few weeks ago, has been pulled from Indiegogo.com but the campaigners say the campaign is "still going strong."
• (UK) One campaign to fund a line of rugby clothes in the UK has raised £123,000 via UK crowdfunding website Crowdcube.com in an issuance of a crowdfunded equity security. The minimum investment amount was £5,000, and the campaign ultimately found 70 crowdfunders to reach the £123,000 funding point. You can check the campaign out right here if you're interested.
• (US) One Massachusetts man has been charged with fraud for trying to solicit private shares for his company via his website, Facebook, and Twitter.
• (US) The William James Foundation and crowdfunding site Launcht.com have teamed up for a second time to provide a platform for entrepreneurs with sustainable business ideas to pitch their business plans. The top three fundraisers will be entered in the William James Foundation's sustainable business plan competition. Check out the projects on the Launcht pitches page here.
• (US) Crowdfund Investing site Communityleader.com has inked a strategic alliance with online bookkeeping site BookKeeperZoo.com.
• (New Zealand) NZ site socialbacking.com starts facilitating token crowdfunding.
• (The Netherlands) Dutch video game funding site Gambitious.com launches. It promises a hybrid model: token funding for small commitments with equity funding available if you want to contribute larger amounts. The site launches in partnership with symbid.com (among others), a crowdfunding platform that I've used and liked.
• (US) California-based UInvest promises to help investors find equity investment opportunities in the Ukraine and other Eastern European countries.
• (Sweden) FundedByMe.com facilitates token-backed funding in Sweden, and interestingly allows backers to make pledges via SMS. The site looks sharp.
Campaign of the Week
In the spirit of sustainable entrepreneurship, please consider the Kosovo Wind Gardens campaign, which has entered the Launcht/William James Foundation's sustainable business competition, which has a nice campaign video:
Friday, August 31, 2012
• (US) Colorado-based crowdfund investing platform Funding Launchpad uses SCOR regulatory framework to sell a $350,000 security for Couragent Inc., a company that produces mobile scanners. They are touting the issuance as the first security issued legally with to the crowd in the US.
• (US) The MIT Technology Review names crowdfunding an emerging and disruptive technology.
• (US) A nice infographic was published on the Indiegogo blog for the recent fundraising effort to raise money for a Tesla museum in New York State. They report that 201k people backed the campaign and that the average contribution amount was $41 in the effort that ultimately raised around $850k for the creation of the museum.
• (US) The SEC votes 4-1 to allow public comment on a rule change that would allow for companies to market (potentially, crowdfunded) securities they're offering to accredited investors, publicly. See the SEC's own summary here.
• (France) After some meetings in France, I've found out that the most respected French CFI portal is WiSEED.fr. Also, they've apparently just received a cease and desist letter from French securities regulators.
• (Argentina, Brazil) Argentinean crowdfunding platform Idea.me has acquired Brazilian platform Movere.me in an all-equity deal. Idea.me has given the owners of Movere.me a 15% stake in the platform in exchange for all of Movere.me's shares. The deal values Idea.me at $2.5mm.
• (Mexico) Reputable incubator 500 Startups has bought Mexican.vc. The founder of 500 Startups, Dave McClure is said to believe that investing in portfolio companies that are located outside of the Silicon Valley is becoming more and more feasible. I post about this because in the white paper I co-authored with Sherwood Neiss and Jason best on crowdfund investing, we argue that because venture capitalists tend to invest only in companies that are proximate to their own headquarters (usually the Silicon Valley), crowdfund investing helps de-centralize the availability of growth capital for startups..
• (US) GATE Technologies and Crowdfunder agree a "technology alliance" in the development of a funding platform that facilitates securities issuances to accredited investors. Assumedly, they'll build out the Crowdfunder platform together, but that wasn't especially clear from the press release.
• (US) San Francisco based CircleUp has agreed a partnership with General Mills "that will allow the massive firm to keep an eye on companies raising on the platform."
• (US) iCrowd.com starts looking for public attention. The site was co-founded by John Callaghan, who has vast experience in small cap securities and a prestigious academic record. It will seek to provide the platform and advise businesses issuing crowdfunded securities.
• (US) Citizinvestor.com is a Bay Area-based crowdfunding site that will focus on funding civic projects.
• (UK) Rebuildingsociety.com starts promoting itself. It's a UK P2P lending network that wants to "force revolutionary change" in the UK financial services industry.
• (The Netherlands) PifWorld, and online crowdfunding for charity website launches.
• (US) Watsi.org launches to crowdfund medical treatments for people in the developing world.
Friday, August 24, 2012
|Image from the Wiki Weapon Project|
• One campaign on Indiegogo has raised $850,000 to fund the creation of a museum dedicated to Nicolas Tesla.
• The SEC has again reported delayed progress in making rules related to the changing the Regulation D rules which pertains to how crowdfunded securities can be advertised.
• Combining two topics of great interest (and bringing to the fore one of the great issues with 3-d printing), the Wiki Weapon Project is aiming to raise funds to support an open sourced 3-d weapon printing project, so that currently-available 3-d printers have the CAD files available to print guns.
• Y-Combinator-backed TheFundersClub.com has started promoting itself publicly. Right now they only allow accredited investors to use their portal, and they say that when crowdfund investing is made legal for non-accredited investors, they'll open up their portal to everyone.
• Albuquerque, NM based TheVentureMarket.com launches to facilitate crowdfund investing.
• StartupAddict.com plans to offer token crowdfunding, crowdfund investing, real-estate crowdfunding, and crowdfunding news.
Project of the Week
• The SunVolt Power Station is a very cool piece of clean technology. A large, iPad-sized solar panel that can be used to charge just about anything is very cool and would make a great gift for someone. The Kickstarter project is looking for another $9,000 to reach it's $30,000 funding goal and a charging station is rewarded to those who commit around $100 to the project.
Friday, August 17, 2012
• Some regulators from developed economies continue to warn about the risks of crowdfund investing. In Britain, the FSA tells investors that crowdfund investing is "too complex" for the average person. In Australia, the ASIC warns funding portals to stay away from illegal promotion of securities products or risk up to five years in jail.
• CNBC UK runs with a story about the rising profile of crowdfunding in the UK after Britain's numerous bank scandals this year.
• In a relatively high profile manner, Richard Branson has invested in to UK crowdfunding site banktothefuture.com. Bank to the Future says that investors can donate, get rewards, seek equity, or make debt claims on the assets of investment targets.
• The International Business Times reports that GrowVC.com's head of African operations, Munya Chiura, will work with M:Lab, an African business incubator to help entrepreneurs crowdfund their startups.
• Hypebot blogger Clyde Smith launches www.crowdfundingformusicians.com, a blog focused on, well, crowdfunding for musicians. Mr. Smith is a well-respected music industry journalist and blogger, so I expect good things from this site.
• IPOVillage.com will mix crowdfund investing with the traditional IPO, assumedly trying to innovate the dutch auction in some way. They propose to help non-accredited investors get access to NASDAQ IPOs.
• Startup Valley is a crowdfund investment funding portal that plans to launch next year. They're situated in the Silicon Valley and focused on high-growth businesses.
• Razoo.com is starting to publicize itself. It's a platform for non-profits that claims to have raised $100mm already, which is a lot of money. Keep in touch with Stephanie Rupp, head of business development based out of San Francisco.
• Tixelated.com launches, which is a crowdfunded events website. It aims mostly at college students trying to fund parties, but could be used by event planners more broadly, too. The site is pretty fancy.
• Starteed.com is a token crowdfunding site that also helps entrepreneurs set up online stores after their projects are funded.
• StockProfile.com, a site that reviews microcap stocks, has announced that it will build the infrastructure to act as a funding portal starting in 2013.
Project of the Week
The Maha Laxmi School Gardening Project is only $60 or so dollars away from reaching it's funding target of $900 on sustainable agriculture crowdfunding site wethetrees.com. The project will help a secondary school in Nepal create an organic garden, which is pretty cool.
I thought we'd stray from Kickstarter this week!
Friday, August 10, 2012
• Upstart.com is launched by Dave Girouard, former president of Google Enterprise. It's backed by Kleiner Perkins Caufield & Byers, NEA, Google Ventures, First Round Capital, Crunchfund, and Mark Cuban. This is probably the most significant funding portal launch I've ever seen. Mr. Girouard will have an extensive network of advisors and entrepreneurs to help him build deal flow to the site. Keep an eye on Upstart.com!
• Crowdsourcing.org reports that traffic to crowdfunding websites is soaring, still, the article cites self-reported traffic figures from this forum so this information should probably not be considered reliable data. Worth noting regardless.
• Two crowdfunding campaigns have jointly raised $325,000 to help victims of the recent shootings in Milwaukee.
• The Onion disses Kickstarter.
• Ouya finishes their Kickstarter campaign with $8.6mm, the second-largest raise ever on Kickstarter.
• Earlyshares.com announces that it has agreed a $1.15mm round of funding from Bruce Langone and Stephen Cornick. Both Cornick and Langone will join the Earlyshares.com board.
• IndieGoGo has made arrangements to be the crowdfunding platform for an entrepreneurship competition run by German foundation and Google has agreed to match funds in winning businesses.
• Upstart.com see headline.
• Brickstarter.org is donation-based crowdfunding for neighborhood projects in Sweden.
• Fundrise.com focuses on investing in real-estate in your local communities. Good-looking site!
• Bolstr.com is a US platform focusing on revenue share deals. Company was started by two US-based investment bankers.
Project of the Week
This fantastic-looking, elegant electric bicycle on Kickstarter
Monday, August 6, 2012
Renewable Power Capacity So Robust in Italy that Gov't Offers Subsidies to Traditional Power Suppliers
Pretty amazing - FT is reporting that in Italy, as power demand falls with economic output, Italy's producers of power from traditional sources are applying for subsidies.
major utilities have lobbied to win subsidies known as “capacity payments” for their conventional and semi-idle thermal power stations after over-investing in new plants.I'm loving this.
Over at the Venture Alley blog contributor Andrew Ledbetter posts Top 10 Reasons to Avoid Crowdfunding. He's referring to the use of crowdfund investing issuances by businesses to raise capital. Let's look at his strongest arguments against crowdfund investing:
• Civil Suits from Investors
Andrew says: "Giving adequate securities law disclosure is complicated, and the types of companies using crowdfunding may not be in a position to spend money on securities lawyers. I suspect there will be a host of disclosure issues that emerge in crowdfunded deals"
Davis says: That's true - a lot of companies that use crowdfund investing without hiring the proper support to make the necessary disclosures to investors are going to get burned.
The answer: Specialist service firms that help with creating these documents are going to need to crop up.
• Harder to Sell the Company to a Larger Player
Andrew says: "An acquirer will be unable to buy the company using acquirer securities as consideration, since the acquirer would likely not have a viable exemption for issuing those securities to the target’s crowdfunded investors, and registering an M&A deal could be impracticable."
Davis says: "That seems right, though I'm not a securities lawyer. I've asked a securities lawyer about this and I'll let you (the readers of the blog) know what they say. Still crowdfund investing isn't only for start-ups and it seems that a well-structured securities issuance - one with the right investor clauses - could avoid this issue."
The answer: Issuers need to address this problem by issuing securities that have a conversion or buyout clause (if the issuer is issuing equity). This will also be a problem for companies that issue in-kind dividends as a part of their issuance, though that's mostly for restaurants and retail, and few of those businesses will be bought from larger players issuing their own equity to buy a restaurant or a retail store.
• Investor Relations Headaches
Andrew says: "As crowdfunding can result in an unusually large number of security holders, companies may face large volumes of routine inquiries, notices, stock transfers, certificate replacements, and other investor relations matters. This concern could be more pronounced given the lack of any investor sophistication standards in the exemption, which could result in unrealistic or needy stockholders."
Davis says: "You can't protect companies from having stupid managers. A good executive team will have thought about this and designed investor relations systems in anticipation of these problems. All you have to do is be clear with investors about what their rights are and not over-commit to them. I've also got some specific ideas here, like accepting feedback from investors only via Twitter apart from annual or bi-annual webinars or conferences."
The answer: Crowdfunding is about communication. Companies with managers who can't handle communications with investors or who don't hire good people to do it will lose, but that's part of doing business. Also, it's not a death knell - all you have to do is be honest with people.