Investment memorandum - Amazon Web Services Korea Investment Memorandum 2016 3 this equity...

Venn korea Limited

InvestmentmemorandumOffer opens on 12 september 2016

2Venn Korea Investment Memorandum 2016

The Offer

This is an equity crowdfunding offer conducted on the AlphaCrowd equity crowdfunding platform. AlphaCrowd is the holder of a Market Service Licence (equity crowdfunding) number FSP428406 issued by the Financial Markets Authority.

The purpose of the offer is to raise capital to enable Venn Korea Limited to execute its Strategic Growth Plan as described in this Investment Memorandum.

http://www.alphacrowd.co.nz/offers/vennkorea

Equity Crowdfunding Offer

Key Features of Offer

Purpose of Offer

Invest Online

Minimum amount to be raised

Maximum amount to be raised

Maximum number of shares to be issued

Approximate % of total equity on offer

Share price

Minimum investment share parcel

Minimum investment

Opening date

$ 100,000.00

$ 500,000.00

500,000 Ordinary Shares

12.5%

$ 1.00 per Ordinary Share

1,000 Ordinary Shares

$1,000.00

12 September 2016

is the earlier of the date by which the minimum amount has been raised or close of business on 27 October 2016.

is the earlier of the date by which the maximum amount has been raised or close of business 11 december 2016.

First closing date

Final closing date


this equity crowdfunding information memorandum (memorandum) has been prepared by Venn Korea Ltd (issuer) for the sole purpose of enabling potential eligible investors to subscribe for new shares in the Company via the AlphaCrowd website, a licensed equity crowdfunding platform under Part 6 of the Financial markets Conduct Act 2013.

This Memorandum does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Memorandum or make the Offer. it is the responsibility of every investor to ensure compliance with all laws of any jurisdiction relevant to their application for securities and any such investor should consult their legal advisors as to whether any government or other consents are required or whether any formalities need to be observed to enable them to apply for and be alloted securities.

this memorandum and any updates to it, together with the Offer legal documents published on the Offer home page on the AlphaCrowd website (including Company Constitution, disclosure Statement, investor Agreement, investor Confirmation, Privacy Policy, Terms and Conditions, User Agreement, Warning Statement) constitute the entirety of this Offer and no other information whether verbal or in writing, relating to this Offer should be relied upon.

this memorandum is for general information purposes only and a prospective investor should conduct their own independent review, investigations, analysis and assessment of the information in this document. no audit or independent verification of this Memorandum has been conducted and this document does not have regard to the investment objective, financial situation or particular needs of each person who may read or use it.

no representation or warranty, expressed or implied, is made as to the accuracy, content, legality, reliability, completeness or correctness of the information in this memorandum or subsequently provided to the prospective investor or otherwise by the issuer, including (but not limited to) any assumption, estimates, forecasts, forward looking statements, projections or targets contained in the memorandum or otherwise made available.

All amounts are in new Zealand dollars (nZd), unlessotherwise indicated.

All legal documentation relating to this Offer is available on the AlphaCrowd website and your investment in this Offer is only possible via the AlphaCrowd website.

Equity crowd funding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of businesses is very speculative and carries high risks. You may lose your entire investment, and must be in a position to bear this risk without undue hardship. New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment. Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.

Offer Legal Documentation and Investment Process

Warning Statement

About AlphaCrowd (www.alphacrowd.co.nz)

Important Legal Statements

As part of the investment process you need to register as a user of the AlphaCrowd website and verify your identity. You then need to read, understand and electronically sign your acceptance or understanding of the Offer legal documents and transfer the full investment amount into the trust account. Full details of the legal documents and the investment process are on the AlphaCrowd website.

For all inquires or to make an investment please visit http://www.alphacrowd.co.nz/offers/vennkorea

Corporate Directory

Company Name

Registered Office

Managing Director

Executive Director

Non-Executive Director

New Zealand Company Number

Venn Korea Limited

5743708

Won Joon Kim (david Kim)

Shaan JOSHi

Alexander John mOORe (Sandy moore)

8 icarus Place, Half moon Bay, 2012, Auckland

AlphaCrowd Limited is the holder of a market Service Licence (equity crowdfunding) number FSP428406 issued by the Financial markets Authority. AlphaCrowd® is a registered trademark of AlphaCrowd Holdings Limited.


Details of the OfferOfferInvestment AmountMinimum and Maximum to be RaisedOpening DateFirst Closing DateFinal Closing DateRights and Liabilities Attaching to SharesList of Current ShareholdersAlphaCrowd Fees

Table of Content

Directors Responsibility and Consent

Glossary

Executive Summary

Business OverviewThe ProblemWhat is it?How does it work?Business Model

5

66 27

27

7 27

8 27

12 27

281515 2817 28

28

292929

18181818181919

202121

222223

242424

25252525252525252626

27

31

30

Market Opportunity & Competitor AnalysisMarketCompetitor Analysis

Strategic Growth PlanTractionLaunchCaptial Raising AssumptionsUse of fundsFurther Capital RaisingExit Strategy

Board of Directors & Management TeamCorporate GovernanceDisclosure of Interests

Financial InformationFinancial Forecasts for Next 2 YearsUser Download AssumptionsRevenue AssumptionsCost AssumptionsDividend Statement

Risk FactorsSpecific RisksGeneral Risks- Investment in Unlisted Shares- Shareholder Dilution- General Economic Risk

How to Make an InvestmentInvestment ProcessAllocation of SharesShare Registry Details

Additional Information on Offer Home PageUpdatesQuestions


Executive Summary

This is an opportunity to invest in an exciting new business at the earliest stage. Having developed the Venn Korea business, brand and platform with our own resources to date, we invite you to support us on our journey in becoming the premier commercial real estate hub of South Korea.

Venn Korea was developed to address a genuine gap in South Korea’s commercial real estate market for an ‘online’ marketplace specifically focusing on commercial real estate identified and qualified by the Managing Director David Kim during his tenure at a leading commercial real estate services firm in South Korea.

The commercial real estate market in South Korea comprises of three tiers: major agencies, minor agencies and direct listings. There is an absence in the market for a dominant listings aggregator that spans across all three tiers. There are existing aggregators but they predominantly focus on residential property with outdated user interfaces and are not specifically tailored to commercial real estate. The current process for tenants and buyers is inefficient and does not offer the best user experience.

Venn Korea is a modern, independent, online aggregator that focuses solely on commercial real estate. It is specifically tailored to commercial real estate targeting listings from all three tiers of the market. The Venn Korea platform allows agencies and agents to manage listings in real time on the cloud, provide 24/7 access of their listings to the market, and in the future offer more advanced features that allow them to manage their contacts and tools to help perform better and more efficiently.

1. Ministry of Land, Infrastructure and Transport: http://www.molit.go.kr/USR/NEWS/m_71/dtl.jsp?id=950769782. CBRE Research: Details can be provided upon request 3. Ministry of Land, Infrastructure and Transport: http://www.molit.go.kr/USR/NEWS/m_71/dtl.jsp?id=95076978

The potential within the commercial real estate market in South Korea is huge. The stock of office space is estimated to be approximately 110 million sqm(1), industrial (logistics facilities) space of approximately 4.9 million sqm with another 2.3 million sqm expected to be supplied over the next three years(2), and retail space of approximately 492 million sqm(3). Research on South Korea’s leading search engine Naver shows over 76,000 commercial real estate listings across South Korea listed by minor agencies. It is estimated there are approximately 9,000 registered agencies focusing on commercial real estate in South Korea.

Venn Korea’s infrastructure and platform is already built and catering for users, listings, advertising and accepting payments. The founders have successfully executed a soft launch where they have already on-boarded strategic partners and are in talks with many more.

This Offer is an opportunity for early-stage investors to join the business now at an attractive valuation and enjoy solid capital gains within a standard venture capital investment time frame of five to seven years. This may be in the form of a listing on a stock exchange, a merger or trade sale depending on what form of corporate action will bring the best possible return to the shareholders.


Business Overview

The South Korean commercial real estate market comprises of three major tiers:

offering and brand power. However, legislation restricted the way these companies could market real estate as they weren’t licensed agencies and could not directly list properties online.

This resulted in a number of issues:

Fee shareTo counter this issue, the major agencies relied on using the traditional method of distributing leasing flyers to the market once a month to increase the reach of their listings. The database that they distribute to include tenants but also includes other major and minor agencies. This resulted in the minor agencies (who are licensed agencies) looking at the leasing flyers and listing it online under their own brand placing a significant portion of their commission at risk.

Limited reachReach is limited to the mail out database of each of the respective major agencies

Time Delay Because the major agencies don’t have an online presence there is a time lag in their listings reaching a part of the market (dependent on each agencies database).

The majority of major agencies have registered as licensed agencies and can now advertise property online.

The Problem

Currently the South Korean commercial real estate market does not have a listings aggregator that spans across all three tiers and which specifically targets commercial real estate only.

The founders have identified different problems for each of the tiers:

1. Major agencies

Korea is a unique market where up until late 2014 the major agencies operated solely as ‘consulting’ firms as opposed to licensed real estate agencies. Yet these consulting firms were the ones that institutional asset managers appointed to market their property because of their multi service

a.

B.

C.


2. Minor agencies

As the minor agencies are all licensed agencies they have been listing online for much longer than the major agencies and they are currently listing on existing listing aggregators.

Some of the issues that have been identified are:Existing aggregators are not focused solely on commercial real estate and covers all property users with their primary focus being residential.The listing format is not specifically tailored to commercial real estate (uses the same format as residential) and does not offer the best user experience.The user interface is outdated and is typically the same across all existing aggregators.

Business Overview

3. Direct listings

Another tier in the market are those that market their own space which include co-working space operators, subsidiary real estate companies of conglomerates that own real estate and private owners. Although this tier is nowhere near as significant as the first two, there is an opportunity to capture this market which currently is not being serviced well.

There is an absence in the market for a dominant listings aggregator for commercial real estate across all three tiers and for tenants and buyers the current process is inefficient and does not offer the best user experience.

The following diagram illustrates the current situation:

a.

B.

C.


Business Overview

Venn Korea was created as the founders saw a genuine gap in the market for an ‘online’ marketplace that specifically focuses on commercial real estate. It is a modern, independent, online commercial real estate aggregator that provides 24/7 access to commercial real estate targeting listings from all three tiers; major agencies, minor agencies and direct listings.

The Venn Korea website application has been built in Korean to offer three core services to the market:

The Solution


Business Overview

Tenants or buyers searching for commercial real estate can search on Venn Korea using the unique search tab tailored to commercial real estate based on their specific criteria and have access to a wide range of listings across all tiers of the market.

When listing a property, users can simply upload photos with full listing/contact details, and immediately gain exposure through the platform which has already been developed to be optimised for mobile. This means that users can take photos of a property, fill out the details, and upload the listing, in a matter of minutes all on their mobile devices.


For the major agencies our objective is to allow them to replicate their traditional leasing flyers online and we will continue to improve the format on an on-going basis.

Ultimately, over time the major agencies should shift away from updating their offline leasing flyers and rely solely on the Venn Korea platform which allows them to manage listings in real time on the cloud, provide 24/7 access of their listings to the market, and in future offer more advanced features that allow them to manage their contacts and tools to help perform better as agencies.

Business Overview


Business Overview

By having an online presence major agencies can reach tenants/buyers directly and increase their reach beyond their mailing database. They can also reduce their reliance on minor agencies and maximise revenue.

Figure 1 Real time listings management Figure 2 Listings online 24/7 Figure 3 Agent profile

For minor agencies, as they have already been listing online with existing aggregators, in addition to the above benefits they will now be able to market on a platform that focuses solely on commercial real estate, is specifically tailored to commercial real estate, and utilise the modern user interface that is completely different from the existing aggregators.

Figure 1 Listing template of Venn Korea in front end specifically tailored to commercial real estate


Venn Korea is also built to cater for co-working space operators to create listings within their own category ‘co-working space’. The co-working space industry is rising globally and is no different in South Korea and recently had a global co-working space operator launch their first centre in South Korea taking up 10 floors of a building.

Independent from all agencies, our aim is to be the premier hub for all tenants and buyers searching for commercial real estate in South Korea. Combining all three tiers into one place is expected to be more efficientand offer a better user experience than current offerings as illustrated by the following diagram:

Business Overview


1. Property Listings

Business Model

Free for a basic listing, $69USD for a featured listing

The platform has already been developed to allow banner advertising throughout the site to allow visitors to click through to their business website.

Current pricing $79USD for 30 days, $142.20USD for 60 days and $177.75USD for 90 days.

2. Advertising

Business Overview


3. User membership subscription Users have their own profile which essentially facilitates their own website within Venn Korea. The profile contains their personal blurb, contact information, the ability for tenants/buyers to email the user directly through the platform as well as view all of their current listings. Venn Korea’s objective is for agencies to ultimately rely solely on the Venn Korea platform.

Once Venn Korea has shown value to the users, and has a larger audience/web traffic, we will start charging agent users a monthly subscription fee.

Business Overview


Market Opportunity & Competitor Analysis

1. Major agencies

The office stock of select A and B grade buildings in the major business districts of Seoul is approximately 16.8 million sqm(4).

Based on our investigation of leasing flyers across Major Global and Local Agencies we estimate there are approx. 694 properties being marketed across 12 major agencies.

The major industrial (logistics facilities) stock in South Korea is estimated to be approximately 4.9 million sqm with another 2.3 million sqm expected to be supplied over the next three years(5).

Based on our investigation it is estimated that there are approximately 200 people servicing the major stock of commercial real estate in the major business districts of Seoul.

2. Minor agencies

Across the whole of South Korea, the office stock is estimated to be approximately 110 million sqm(6).

Approximately 492 million sqm(7) of retail space in South Korea.

Research on South Korea’s leading search engine Naver shows over 76,000 commercial property listings across South Korea listed by minor agencies.

Based on our investigation it is estimated that the total number of registered agents in South Korea is just under 94,000. Venn Korea has investigated the number of agents focusing on commercial real estate in the major business districts of Seoul and estimate that around 13% of agents are servicing commercial real estate. Based on this we estimate that approximately 10% of the total number of agencies in South Korea may focus on commercial real estate.

Market Size

4. CBRE Research: http://www.cbre.com/research-and-reports5. CBRE Research: Details can be provided upon request6. Ministry of Land, Infrastructure and Transport: http://www.molit.go.kr/USR/NEWS/m_71/dtl.jsp?id=950769787. Ministry of Land, Infrastructure and Transport: http://www.molit.go.kr/USR/NEWS/m_71/dtl.jsp?id=95076978

Commercial Property Listing in South Korea- as at July 2016

Office Retail Industrial

1476320231

41162


Another target market are the private owners that want to market their own space. At this point in time we do not have accurate data on this sector estimate the potential market size.


3. Direct listings

Co-working space is a category that is experiencing rapid growth globally.

Based on our research we estimate that there are 16 major serviced office centres across Seoul. Although we are not able to identify the exact number it is expected that there are many more co-working space throughout South Korea that are not operated by the global brands who are also part of the target market.

There are a number of subsidiary companies of conglomerates that own real estate and manage their own portfolio. Based on leasing flyers we estimate that there are 99 major buildings across seven companies in this category. Again there could be many more that we are not aware of.

No. of licensed Agents as at July 2016

30000

25000

20000

15000

10000

5000

0

Gyeongg

i-do

Seoul S

pecial C

ity

Busan M

etropolita

n City

Gyeongs

angnam-d

o

Incheon M

etropolita

n City

Daegu M

etropolita

n City

Gyeongs

angbuk-d

o

Chungech

eongnam-d

o

Gwangju M

etropolita

n City

Jeollabuk-d

o

Chungcheongb

uk-do

Daejeon Metro

politan City

Ulsan M

etropolita

n City

Jeollanam-d

o

Gangwon-d

o

Jeju Specia

l Pro

vince

Sejong S

pecial C

ity



Competitive Analysis

There are existing listings aggregators in South Korea but they are predominantly focused on residential and are not tailored to commercial real estate nor do they provide a seamless commercial real estate search experience and all share the same outdated interface.

The current pricing model has been implemented toensure Venn Korea secure sufficient listings to be viable. Cost models will be revised regularly to ensure they are market competitive while also maximising revenues.

There are also minor agencies that have their own website and who are trying to differentiate themselves by having a more user friendly website. However, these are not an open platform like Venn Korea’s model and the stock is limited to their own. Ultimately, over time once Venn Korea has built enough traffic and becomes the no.1 authority in commercial real estate we feel that the above websites will also need to list on Venn Korea. Similar to how all the major agencies in New Zealand have their own websites but yet they still list on aggregators.We do not view the above agencies that have their own website to be our direct competitor.

Venn Korea will enable the major and minor agencies that do not have the same technology to compete on the same level by providing the technology based on a monthly subscription fee rather than having to invest capital in creating their own.


Strategic Growth Plan

To date all market research, brand and platform development has been funded by the founders and have completed a soft launch with a combination of users signed on.

The founders are now looking to raise capital to take the brand above the line and drive extensive growth for both listings and users.

Venn Korea will target growth by appointing a marketing strategist in South Korea with expertise in local digital and traditional marketing. Initially the role will be to build the go to market plan in conjunction with the board of directors, and to execute and evolve the plan as the business matures. The key tasks being to grow awareness as well as significantly increasing web traffic which in turn will allow us to adjust our pricing structure and attract paid advertising.

Venn Korea will also appoint a local business development/ relationship manager to target all three tiers of the market. Our primary goal will be to support our marketing strategies to drive the property listing and agent membership targets.

Once the listings and the traffic on the website are significant the pricing structure for the existing services will be amended to maximise revenue. Furthermore, new revenue streams will be added by activating the user membership subscriptions. The website has already been developed to offer the user profile service but requires further development for more advanced features that will maximise return to subscribers.

Use of Funds Amount if Minimum Raised Amount if Maximum Raised

Use of Funds Table

$35,500

$17,500

$37,000

$4,000

$6,000

$198,000

$85,000

$183,000

$4,000

$30,000

Advertising & marketing

technology & Product

Sales + Operations

Costs to build campaign

Fees payable to AlphaCrowd

TOTAL $100,000 $500,000


Further Capital Raising Exit Strategy

In the future, the Company may raise further capital by the issue of shares in the Company subject to the terms of the Investor Agreement.

In all future capital raisings, the Company will endeavour to ensure that there are no down rounds, that is each subsequent capital raising will be offered at a higher valuation than any previous capital raising round. This implies a steady appreciation in value of the investment made by early-stage investors under this current Offer.

Venn Korea may target a liquidity event within a standard venture capital investment time frame of five to seven years. This may be in the form of listing on a stock exchange, a merger or an acquisition depending on what form of corporate action will bring the greatest possible return to the shareholders.

Strategic Growth Plan


Sandy Moore - Director

Board of Directors

Directors and Corporate Governance

David Kim - Founder and Managing DirectorDavid’s market insight is invaluable to Venn Korea with numerous years of experience at a top global commercial real estate firm in the Asia Pacific region of which a considerable period was in Seoul where he developed a deep understanding of the commercial real estate market and forged strong industry relationships.

His immense understanding of the Asia Pacific real estate market allows him to leverage existing networks and identify opportunities that might otherwise go unseen. It is his ability to accurately identify the needs of agents and understanding both sides of the equation (agent and tenant), through himself being an agent as well, that is immensely valuable to Venn Korea.

Education: Bachelor of Property (Hons) – The University of Auckland

As a member of the Board of Directors, Sandy is invaluable to the overall strategy of Venn Korea as a company. He has extensive experience and a strong market reputation in senior business management, company performance and growth, fiscal responsibility and governance, working with some of New Zealand’s biggest brands to create award winning campaigns.

Sandy’s achievements are impressive to say the least. His career at DDB (one of New Zealand’s most influential full-service advertising agencies) was the setting of some of his most notable work. In 1991, he was promoted to Managing Director, just four years after joining DDB. He continued to climb the ranks becoming Group Managing Director, then Deputy Chairman, then finally Group CEO. In this role, he was awarded ‘CEO of the Year’ multiple times.

Sandy Moore is regarded as one of the biggest names in advertising, and is renowned for being one of the nicest people in the industry. He was awarded for his incredible commitment to advertising with a Lifetime Achievement Award at AXIS in 2014.

Shaan has been heavily involved in a variety of different businesses, specializing in marketing, strategy and innovation. He has worked in investment and consultancy firms, both in the United States of America and New Zealand.

His extensive knowledge about various business models and markets transfers seamlessly to the commercial real estate sector. Shaan’s ability to unlock business opportunities and leverage his extensive network to transform strategy into reality adds significant value to the growth and evolution of Venn Korea.

Education: Bachelor of Business (Strategic Management and Marketing) – San Diego State University & Auckland University of Technology

Shaan Joshi - Founder and executive Director


Directors and Corporate Governance

Corporate Governance

To promote good corporate governance, the Company has appointed Alexander John (Sandy) Moore as an Independent Director as required under the Investor Agreement. As an Independent Director Sandy Moore does not own shares in the Company and does not have a material or pecuniary relationship with the Company or related persons, except for director’s fees. However, he is entitled to purchase shares/invest in this capital raise through AlphaCrowd and still remain independent as a minority shareholder.


Financial Information

1. Forecasting

Property Listing

Agent Profiles

revenue Model (per month)

revenue Forecast

Quarterly (Profit/Loss)

2017 2018

Target Market Share

Target Market ShareAgents

Basic ListingsFeatured ListingsAgent Profiles

Basic ListingsFeatured ListingsAgent ProfilesTotal Revenue

Expenses (000)Directors SalariesStaffSales and OperationsAdvertising and MarketingTechnology and ProductTotal Expenses

Total ListingsBasicFeatured

Q1 Q1

0.50%

0.00%0

$0

$69

$0

-

$8K

-

$8K

-$72K

$10K

$20K

$5K

$40K

$5K

$80K

381343

38

6.50%

3.50%329

$19

$69

$0

$254K

$102K

-

$356K

$206K

$20K

$50K

$25K

$50K

$5K

$150K

49504455

495

Q2 Q2

1.75%

0.50%47

$0

$69

$0

-

$28K

-

$28K

-$82K

$10K

$50K

$5K

$40K

$5K

$110K

13331199

133

8.00%

5.00%470

$19

$69

$0

$313K

$126K

-

$439K

$289K

$20K

$50K

$25K

$50K

$5K

$150K

60925483

609

Q3 Q3

3.00%

1.50%141

$0

$69

$0

-

$47K

-

$47K

-$63K

$10K

$50K

$5K

$40K

$5K

$110K

2285

2056

228

9.50%

6.50%611

$19

$69

$100

$371K

$150K

$183K

$704K

$554K

$20K

$50K

$25K

$50K

$5K

$150K

72356511

723

Q4 Q4

4.50%

2.50%235

$0

$69

$0

-

$71K

-

$71K

-$59K

$10K

$50K

$25K

$40K

$5K

$130K

34273084

343

10.50%

8.00%752

$19

$69

$100

$410K

$166K

$225K

$801K

$651K

$20K

$50K

$25K

$50K

$5K

$150K

79967197

800

All forecasting revenue is in $USD



2. User and Revenue Assumptions

Property Listings:

User Membership Subscription:

Property Listing

2017 2018

Target Market ShareTotal ListingsBasicFeatured

Q1 Q1

0.50%381343

38

6.50%49504455

495

Q2 Q2

1.75%13331199

133

8.00%60925483

609

Q3 Q3

3.00%2285

2056

228

9.50%72356511

723

Q4 Q4

4.50%34273084

343

10.50%79967197

800

Property listings have been split between standard and featured at an assumed ratio of 90% standard and 10% featured. Venn Korea will target 0.5% market share as we look to kick off our above the line campaign and with major strategic partners already signed on, we are over 70% of the way there. Venn Korea will look to incrementally grow our share to 10.5% by the end of 2018. For modelling purposes Venn Korea have targeted conservative market share

After successfully driving property listings for the first three quarters of above the line operation Venn Korea will adjust the costing to remain appealing, yet maximise revenue and start charging users for providing an online profile on Venn Korea from where all their individual listings can be viewed as well as use of the websites various tools. For modelling purposes Venn Korea has targeted conservative market share targets, however the marketing and PR plans will be to target a much higher share.

Agents Profiles

2017 2018

Target Market ShareListed users

Q1 Q1

0.00%0

3.50%329

Q2 Q2

0.50%47

5.00%470

Q3 Q3

1.50%141

6.50%611

Q4 Q4

2.50%235

8.00%752

targets, however the marketing and PR plans will be to to target a much higher share.

After 6 months of operation Venn Korea will adjust the property pricing models to remain market competitive, but increase revenue, specifically by revising the cost structure of the featured listings. 12 months after operation the cost structure will once again be revised for basic listings.



2017 2018Q1 Q1Q2 Q2Q3 Q3Q4 Q4

Advertising:

Venn Korea has considered the matters related to the provision of prospective financial information and believe that we do not have a reasonable basis to forecast future earnings through advertising because of the variable and uncertain nature of this particular revenue stream. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection. As such the above forecasts do not reflect any revenue through advertising.

The below revenue adjustments have been assumed for purposes of modelling:

revenue Model (per month)

Basic ListingsFeatured ListingsAgent Profiles

$0

$69

$0

$19

$69

$0

$0

$69

$0

$19

$69

$0

$0

$69

$0

$19

$69

$100

$0

$69

$0

$19

$69

$100

Dividends Statement:

The Company is raising capital to meets its growth objectives as outlined in its Strategic Growth Plan. Accordingly, the Directors do not expect the Company to pay dividends while the Company is in the growth stage. Investors should consider an investment in the Company to be an investment for growth not income.


Details of the Offer

Offer

Under this Offer, the Company invites Investors to subscribe for Shares at an issue price of $1.00 per Share to raise the minimum and maximum amounts described below. All of the Shares offered under this Offer will rank equally in all respects with Shares currently on issue.

Investment Amount

The minimum subscription in respect of the Offer is 1000 shares at $1.00 per share, a total investment of $1,000.00 minimum.

Minimum and Maximum to be Raised

The minimum amount to be raised under this Offer is $100,000.

In the event that this minimum amount has not been raised by the First Closing Date, the Offer will be deemed to have been withdrawn and all investors’ monies will be returned promptly.

The maximum amount to be raised under this Offer is $500,000.

At First Closing Date, if the maximum amount has not been raised, the Offer will be automatically extended until the Final Closing Date.

Opening Date

09:00 on 12 September 2016

First Closing Date

Is the date and time by which the minimum amount has been raised or 17:00 on 27 October 2016 whichever occurs earlier.

The Directors reserve the right to extend the First Closing Date should it be considered by them necessary to do so.

Last Closing Date

is the date and time by which the maximum amount has been raised or 17:00 on 11 december 2016, whichever occurs earlier.

The Last Closing Date is final and cannot be extended further in respect of this Offer.

Rights and Liabilities Attaching to Shares

Investors have rights under the terms of the Investor Agreement and also as shareholders. The Company Directors and officers of the Issuer have obligations under the laws of New Zealand including the Companies Act 1993. Shareholders may have additional rights and protections under the Constitution (if any) of the Company.

In general, shareholders are entitled to:The right to an equal share in dividends;The right to an equal share in the distribution of the surplus assets of the company upon liquidation.

In general, your liability as a shareholder is limited to:any amount unpaid on a share subscribed for or held by you.

This is not a full and conclusive statement of the law. You should seek independent legal advice if you wish to learn more about your rights and liabilities as an investor and shareholder, or if you wish to learn more about directors duties and company law.


List of Current Shareholders

1. Assuming maximum target is raised.

Shares to be Issued at Closing

At closing the company will issue up to 500,000 new Ordinary Shares to Investors.

Founding Shareholders Shares to Split at Closing

At closing the founding shareholders’ shares will split at a ratio calculated to achieve a total issued share capital of 4,000,000 Ordinary Shares and give each founding shareholder an equal number of shares. Each of the two founding shareholders will therefore end with the number of shares calculated as follows: (4,000,000 Ordinary Shares - Number of Ordinary Shares Issued to New Investors)/2

AlphaCrowd Fees

The Company will pay AlphaCrowd an amount of 6.0% in respect of the amount raised in the event of a successful Offer. No fees are payable by the Company to AlphaCrowd if the Offer does not succeed. The Company has additionally incurred its own costs in relation to the preparation of this Offer including accounting, consulting, graphic design, legal and other costs as disclosed in the Use of Funds.

Details of the Offer

Name of Shareholder

Shaan JOSHI

Won Joon KIM

New Investors

TOTAL

5,000

5,000

-

10,000

50.0%

50.0%

-

100.0%

1,750,000

1,750,000

500,000

4,000,000

43.75%

43.75%

12.5%

100.0%

Number of Shares Currently Held

Percentage Currently Held

Number of Shares To Be Held

Percentage To Be Held1


Risk Factors

Specific Risks

Limited Operating HistoryThe business began to be developed in early 2015 and the company was established in its corporate form in July 2015. Due to its limited operating history there is a risk that the Company will not generate sufficient revenues to enable it to meet its financial forecasts initially but as traction is gained, revenue will increase via multiple streams.

Adoption Rate Could Be Lower Than ExpectedThere is a risk that adoption rates could be lower than forecast which would have a material adverse impact on the financial performance of the Company. Since launched, we have major agencies on board.

General Risks

Investment in Unlisted SharesThis is an investment in unlisted shares and the Directors are targeting a liquidity event in a 5 to 7 year timeframe. While the shares are transferable subject to the Company Constitution and Investor Agreement, you need to be aware that there is no ready market for the shares at this time.

Shareholder DilutionIn the future, the Company will need to raise further capital to fund its evolution and growth. This will result in a decrease of each shareholder’s proportional share of ownership in the Company and, potentially, a concurrent increase or decrease in the nominal value of the shares.

Any future capital raisings will be in accordance with the Investor Agreement and the Constitution. Existing Shareholders may or may not be invited to participate in any further capital raisings.

General Economic RiskChanges in the general economic climate in which the Company operates may adversely affect the financial performance of the Company. Factors that may contribute to that general economic climate include the level of direct and indirect competition against the Company, industrial disruption and the rate of growth of the gross domestic product in the countries targeted by the Company, interest and exchange rates and the rates of inflation. If the target market countries’ economies do not continue to grow, slow materially, stop growing or go into recession, there may be a diminished market for the Company’s services. This would have a material adverse effect on the performance and profitability of the company.


How to Make an Investment

Investment Process

All legal documents relating to this Offer are on the Offer Home Page on the AlphaCrowd website. Your investment in this Offer is only possible online at the AlphaCrowd website.As part of the investment process you need to register as a user of the AlphaCrowd website and verify your identity. You then need to read, understand and electronically sign your acceptance or understanding of the relevant Offer legal documents after which you arrange to transfer the full investment amount into the trust account. At closing your shareholding details and settlement statement are sent to you and the share registry is notified.

Allocation of Shares

Allocation of Shares will be based on the receipt of the completed online investment application together with a completed deposit of the investment amount into the trust account and will be allocated based on the order that the investment monies are received into the trust account.

Share Registry Details

The Company has appointed Computershare New Zealand to act as the share registrar. Following the successful completion of the Offer, shareholders will be able access their shareholding details, update their address details, notify of share transfers and receive information via the registrar directly at www.computershare.co.nz the order that the investment monies are received into the trust account.

Invest Online

www.alphacrowd.co.nz/offers/vennkorea


Additional Information on Offer Home Page

The following additional information is available on the Offer Home Page at

http://www.alphacrowd.co.nz/offers/vennkorea

Updates

Any updates in relation to this Offer will be posted online.

Questions

Investors are able to ask any questions that they may have in relation to the Offer online.


Directors Responsibility and Consent

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that the statements made in this Memorandum are not misleading or deceptive and that to the best of the Directors knowledge no material facts have been omitted. In respect of any statements made in this Memorandum by persons other than Directors, the Directors have made all reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make them. The Directors consent to the issue of this Memorandum as at 12 September 2016.

Signed for and on behalf of Venn Korea Limited by


Glossary

All terms are as defined in the Investor Agreement which takes precedence and additionally:

AlphaCrowd

AlphaCrowd website

Company

Constitution

First Closing Date

Last Closing Date

Investor

Issuer

Offer Homepage

Share

Share Application

Memorandum or Investment Memorandum

Investor Agreement

Offer

Opening Date

is ALPHACROWd Limited (Company number 5563067)

is www.alphacrowd.co.nz

is Venn KOReA Limited (Company number 5743708)

is the constitution of the Company (as amended from time to time)

is the earlier of the date by which the minimum amount has been raised or close of business on 27 October 2016, unless extended by the Company

a person or entity investing in the Company as a result of the Offer

the Company

is www.alphacrowd.co.nz/offers/vennkorea

an ordinary equity share in the Company

is an application to invest in the Offer made via the Offer Home Page

is the earlier of the date the Company determines, the date by which the maximum amount has been raised or close of business 11 december 2016. this date cannot be extended.

is the agreement between the Company, its existing Shareholders and the investors which is available on the Offer home page

the equity crowdfunding offer, made by the Issuer via the AlphaCrowd website, referred to in the memorandum

means the time and day on which the Offer opens for subscription in accordance with its terms, as set out on the AlphaCrowd Website

is the investment memorandum dated 12 September 2016 issued by the Company in respect of the Offer

Investment memorandum - Amazon Web Services Korea Investment Memorandum 2016 3 this equity...

Documents

Transcript of Investment memorandum - Amazon Web Services Korea Investment Memorandum 2016 3 this equity...