SeedAsia is the first equity crowdfunding site to launch in the region,
although the equity funding trend has been taking off in the US, where there
are apparently over 200 such sites. One of them, FundersClub, recently cleared
US regulators, paving the way for more such sites to flourish.
It’s kind of a hybrid between Kickstarter and private investment,
said co-founder Tom
Russell. The startups to be listed would have ideally gone through some some
sort of incubation program and would have shown promise. They can apply offer
between $50,000 and $1.5 million in equity through SeedAsia’s platform."
SeedAsia Blog
Equity Crowdfunding is the 21st Century Investment Banker
Considered one of the greatest investors of all
time, Peter Lynch had a simple investment principle - “invest in
what you know.” This straightforward investment philosophy helped him find good
undervalued consumer-oriented stocks and achieve an annual average return of 29
percent while managing the Fidelity Magellan Fund from 1977 to
1990, which grew from $20 million to $14 billion during that
time.
We appreciate Lynch’s simple,
yet adaptive, investment style, which focused on the basics
of good management, exceptional businesses, and quality consumer
products. However, in today’s Sarbanes-Oxley world,
for lots of logical reasons, investors are increasingly unable to realize this
type of return or get in early enough to see that magnitude of returns. For
example, a single share of Starbucks bought at the 1992 IPO is
now worth almost 100x its original price. Even if one invested at Facebook’s
public nadir of $50 billion in value, and it reaches $350 billion
market capitalization, it would only be a 7x return.
The JOBS Act has
relieved some of the restrictions that were put into place by the
Sarbanes-Oxley Act, with the most notable innovation being crowdfunding. As the
investment banker who had the privilege to take storied retail brands like
Starbucks public, I see the crowdfunding marketplace improving upon the
investment banking franchises of yesteryear by allowing retail investors to
once again gain early access to high-risk growth investment opportunities.
Providing that opportunity early to investors
inspired us to invest in CircleUp, a great equity-based crowdfunding site
focused on consumer and retail. In our minds, CircleUp’s
equity-based crowdfunding approach will become the 21st century investment
banker.
Rather than shying away from what some consider to
be competition, we were the first institutional investors to back
Ryan Caldbeck and Rory Eakin, the co-founders of CircleUp, and
embrace the value that crowdfunding can bring to early-stage startups. Two
years later, CircleUp is on its way to making their vision a reality with a
game-changing approach and marketplace that matches promising consumer
companies with the right investors. This week, the company successfully closed
new funding of $7.5 million
led by Union Square Ventures and Google Ventures, with participation
from my firm, Maveron. The financing marks the next step for Caldbeck and
Eakin in making CircleUp the investment platform for the next generation
of consumer brands. Early evidence shows that there is a good chance the next
Chobani, Vitamin Water, or Under Armor will start by raising capital on CircleUp.
In his Forbes article on the one-year old
“Jumpstart Our Business Startups” (JOBS) Act, Caldeck says “Equity crowd
funding is the most disruptive thing to happen to the financial services
industry in a very long time.” As a former investor at consumer private equity
funds, Ryan saw a hole in the market – early stage consumer businesses with
great potential struggling to find capital and not a head on fit with
normalized fundraising models paired with investors who couldn’t gain early
access to these high quality businesses.
I couldn’t agree more. Not only is crowdfunding
great for investors, but it’s even better for entrepreneurs, opening up
untraditional sources of capital and creating a network previously unavailable
to early stage companies. While we know as well as any the value great
institutional investors can bring to the table, we also know that institutional
capital is not right for every type or stage of promising business. Raising
capital from individuals rather than institutions, can provide entrepreneurs
with benefits such as more internal control, or more flexible liquidity
timelines. Unlike investment banking, crowdfunding gives independent investors
complete transparency and visibility into where other smart investors,
frequently their peers, are investing. Rather than a junior banker calling
dozens of institutional clients and retail investors with research and analysis
on potential investment opportunities, CircleUp offers individual investors
direct access to opportunities. It provides a format where they can find the
relevant information, receive sample products, and connect directly with the
company and management team. This new approach allows influential private
investors to speak with their pocketbooks, a signal that is vastly superior to
the investment banking research analyst reports in today’s hyper connected
world.
Lets face it, crowdfunding is the new
investment banker and, in many ways, a new important player in the venture
capital ecosystem. Maveron has been one of the few VC firms that have made
bets on equity crowdfunding. Just like all our investments, we’re looking
for incredible entrepreneurs like Ryan and Rory and for businesses that are
ready to disrupt industries, displace incumbents, and establish market
leadership. We love the idea of investing behind disruptive companies
like CircleUp, and relish in the fact they might end up being our
competition for certain investments. With crowdfunding, more entrepreneurs
with the next big idea will access capital and that’s a good thing for the
entire entrepreneurial ecosystem.
(Source: maveron.com)
Keine Kommentare:
Kommentar veröffentlichen