Post on 23-Jan-2015
description
1
Delineating Investment CrowdfundingGlobal Data Insight amp Trends
Jonathan Sandlund
Jonathan Sandlund | jsandlund | As of 9162013
jsandlund
2
thecrowdcafecom leading provider of research data and analysis on the global crowdinvesting industry
about me
Jonathan Sandlundjthecrowdcafecomjsandlund
localinvestorsorg live think invest local
3
Intro to Investment CrowdfundingThe Mechanism
Jonathan Sandlund | jsandlund
4
Thank you
Leading law firm serving the crowdfunding industry
5
reward 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
6
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
7
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
8
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
2
thecrowdcafecom leading provider of research data and analysis on the global crowdinvesting industry
about me
Jonathan Sandlundjthecrowdcafecomjsandlund
localinvestorsorg live think invest local
3
Intro to Investment CrowdfundingThe Mechanism
Jonathan Sandlund | jsandlund
4
Thank you
Leading law firm serving the crowdfunding industry
5
reward 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
6
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
7
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
8
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
3
Intro to Investment CrowdfundingThe Mechanism
Jonathan Sandlund | jsandlund
4
Thank you
Leading law firm serving the crowdfunding industry
5
reward 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
6
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
7
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
8
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
4
Thank you
Leading law firm serving the crowdfunding industry
5
reward 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
6
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
7
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
8
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
5
reward 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
6
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
7
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
8
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
6
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS AFFINITIES X =
Rewards-Based
7
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
8
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
7
Funded$
$
$$
$
the mechanism
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
8
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
8
Funded$$
$$
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
9
Funded$$
$ $
$FAMILY FRIENDS
CUSTOMERSINVESTORS
AFFINITIES X =
the mechanism
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
10
Funded$ $
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
11
Funded
$
$
$
$
$
FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
12
Not Funded
$
$
$ $
$FAMILY FRIENDSCUSTOMERS
INVESTORSAFFINITIES X =
the mechanism
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
13
rewards vs equity
~$5000
~$160000
Median Fundraise
~$775000
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
14Jonathan Sandlund | jsandlund
The Legalities of Investment CrowdfundingTitle II amp Title III of the JOBS Act
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
The JOBS Act
15
Title II Title III
Lifts ban on general solicitation and advertising on security offerings to accredited investors
Amended Form D (Proposed changes onlymdashNOT in effect)
September 24th 2013
Businesses Raise up to $1mm in 12-month period
Investors tiered limits on investment amount
Rule-making includes SEC and FINRA
Crowdfunding for Accredited Investors
Crowdfunding for Everyone
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Title II In Action
16
Demo Days
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
17
ldquoYou can pick your own winners and invest as little as $1000mdashor invest $5000 in a fund with all 25rdquo
Title II In ActionStartups
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
18
Title II In ActionReal Estate
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
19
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 ActionGlobal
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
20
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
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
21
The US Market
Jonathan Sandlund | jsandlund
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Platforms market segmentation
22
Investment Crowdfunding Platforms
NicheAffinitySMBsStartups
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Platforms market segmentation
23
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
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 + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Platforms business models
20 Carry
$19 - $69 month
selected samples
10 Success + 10 Carry
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
The US Market
Investors Productization Investors Secondary liquidity Investors Portfolio management Businesses Ecosystem one-stop shop for fundraising Businesses Optimization of the Cap Table (pre-funding) Businesses Optimization of Execution (post-funding)
A few things to think about
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
27
Case StudiesWhatrsquos the data say
Jonathan Sandlund | jsandlund
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
28
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Macro-Data Selected Sample
29
Equity180 Deals
$132 Million
Equity73 Deals
~$22 Million
Debt2952 Deals$256 Million
Equity29 Deals
$26 Million
Equity11 Deals$954k
Equity20 Deals
~$21 Million Selected sample of platforms as of 101413
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
30
300+ Equity Placements
2900+ Loans
$300+ Million in Crowdfunded Security Transactions
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
31
Crowdfunding ModelsDiversity Innovation
Jonathan Sandlund | jsandlund
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
32
A+ to C Risk Bands Applied
Offer 1 3 5 year loans
pound5000 - pound1000000
Secondary market
Crowdfunded two $80000 small business loans in under 29 minutes
Debt2702 Deals$240 Million
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
33
Discovery
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
34
Splash Bathroom Accessories Co
Profile
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
35
Credit Score History
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
36
Key Financials
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
37
Questions amp Answers
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
38
$0
$2000000
$4000000
$6000000
$8000000
$10000000
$12000000
$14000000Monthly Loan Originations Since Inception
August 2010 June 2013
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
39
Launched 2010
Sector Focus General (concentration internet food amp drink)
Lowest Raise $19000 Highest Raise $23 million
Averages (medians n= 65)
Raise $160000
Equity Offered 16
Post-Money Valuation $960000
Number of Investors 59
Investment Size $2963 (low $331 high $80k)
Equity73 Deals
~$22 Million
Jonathan Sandlund | jsandlund
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
40
Deals per Month Since Inception
n = 65
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
41
Launched July 2012
Sector Focus Internet
Lowest Raise $15200 Highest Raise $320000
Averages (medians n=29)
Raise $64000
Equity Offered 10
Post-Money Valuation $516000
Number of Investors 79
Investment Size $1013
Equity29 Deals
$27 Million
Jonathan Sandlund | jsandlund
Minimum Investment $16
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
42
Launched Mid-2012
Sector Focus Consumer ProductsRetail
Lowest Raise $440000 Highest Raise $24 Million
Averages (medians n=19)
Raise $784500
Number of Investors 15
Investment Size $74263
Equity20 Deals
$21 Million
Jonathan Sandlund | jsandlund
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
43
Launched Mid-2012
Sector Focus Technology Startups
Investors 6700+ accredited investors now invite-only
Averages (median n = 23)
Raise $236000
Number of Investors 32
Investment Size $6839
Equity31 Deals
$72 Million
Jonathan Sandlund | jsandlund
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Summary
44
Data bull Zero Fraud mdash to date
bull Young Market Traditional S-Curve
Crowdfunding Platforms bull Tremendously Diversebull Debt Equity Royalty-Based Blended
bull Startups Small Businesses Emerging Growth Corsquos Projects Individuals
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Market Adoption S-Curve
45
Time
Penetration
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
46
The Disruption mdash Not If But When
Jonathan Sandlund | jsandlund
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
47
Crowdfunding
TechnicalDisruptionEntrance of the internet into the 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
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
48
Music
Travel
Retailing
Before After
Internet Disruption Technical
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Nearly all service industries re-imagined by the internet
49But not fundraising yet
Technical
Source Quora
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
A fundamentally more efficient capital formation process
50
Technical
A Big UK Bank
Source httpwww-corenestaorguklibraryimagesNestaBanksjpg
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
A fundamentally more efficient capital formation process
51
Technical
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Summed up
The first major change in security law in 70+ years
Allows the internet to enter 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
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
But itrsquos not just structural change driving the disruption
53
Cultural
Itrsquos also cultural
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
54
Chicago Booth 13 of Americans trust the stock market
Distrust is pervasive Chicago Booth Financial Trust Index
Cultural
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
Today little alternative to public markets
55
Tomorrow individuals empowered to invest in the the companies causes and people they believe in
Cultural
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
56Jonathan Sandlund | jsandlund | As of 9162013
The Impact
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
For Businesses
57
Breaking geographic barriers equal opportunity Fail faster fail cheaper
Startups
Small Businesses
Conversion of social to financial capital A new era of marketing
Emerging Growth Corsquos
Not ldquosexyrdquo enough for VC not big enough for PE Creates access to growth capital
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
For Communities
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
59
the big picture
one last question
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom
60
Jonathan Sandlundjsandlund
Thank You
Jonathan Sandlund jthecrowdcafecom