www.seedrs.com

Equity Crowdfunding – An avenue for growth

• Tom Hörbye – Campaign Development Associate

3rd November 2016

• @t_horbye

Great ideas are everywhere

Investors aren’t… because it’s hard

Finance has changed

What are the different types of

crowdfunding?

Types of crowdfunding

Rewards

Money in exchange for perks

Backers

Altruistic

Best for creative products and to pre-sell products

Types of crowdfunding

Rewards

Money in exchange for perks

Debt

Money in exchange for interest yielding returns

Best for businesses with a track record of revenues

Backers Lenders

Altruistic Lower Risk

Best for creative products and to pre-sell products

Types of crowdfunding

Rewards

Money in exchange for perks

Debt

Money in exchange for interest yielding returns

Equity

Money in exchange for shares

Best for businesses with a track record of revenues

Best for growth-focused companies in areas where there’s potential for return

Backers Lenders Investors

Altruistic Lower Risk High Risk

Best for creative products and to pre-sell products

Is my business ready for equity crowdfunding?

Pre-seed Seed Early-Stage Growth Expansion MaturityS

ME

Rev

enue

SME Development Stage

Friends and Family

Rewards-Based Crowdfunding

SM

E R

even

ue Pre-seed Seed Early-Stage Growth Expansion Maturity

SME Development Stage

Friends and Family

Rewards-Based Crowdfunding

Business Angels

SM

E R

even

ue Pre-seed Seed Early-Stage Growth Expansion Maturity

SME Development Stage

Friends and Family

Rewards-Based Crowdfunding

Business Angels

SM

E R

even

ue

Venture Capital

Pre-seed Seed Early-Stage Growth Expansion Maturity

SME Development Stage

Friends and Family

Rewards-Based Crowdfunding

Business Angels

Venture Capital

Debt (P2P and Banks)

SM

E R

even

ue Pre-seed Seed Early-Stage Growth Expansion Maturity

SME Development Stage

Friends and Family

Rewards-Based Crowdfunding

Business Angels

Venture Capital

Private Equity

IPO

Debt (P2P and Banks)

SM

E R

even

ue Pre-seed Seed Early-Stage Growth Expansion Maturity

SME Development Stage

Friends and Family

Rewards-Based Crowdfunding

Equity Crowdfunding

Business Angels

Venture Capital

Private Equity

IPO

Debt (P2P and Banks)

SM

E R

even

ue Pre-seed Seed Early-Stage Growth Expansion Maturity

SME Development Stage

The Equity Crowdfunding Market Today

Tens of thousands of people have now had the chance to invest in businesses they believe in

5%Thousands of businesses have been given a new and efficient way to raise capital

Early-stage investment

Seedrs

Over 400 funded deals

Over £160 million invested

Pan-Europeanplatform

Most active investor in private companies in the

UK*

* Beauhurst report – The Deal H1/16

Why should your business consider raising finance through equity crowdfunding?

But first, let’s dispel one misconception…

But first, let’s dispel one misconception…

…a business doesn’t have to crowdfund OR raise from Angels/VCs

E.g. Seedrs £10m Series A

+£7.5m £2.5m

from hundreds of crowd investors

6 reasons why your business should raise financing through equity crowdfunding

#1 Money

#2 Validation

#3 Efficiency

#4 Speed

#5 Engagement and added value

#6 Marketing

Things to get sorted before you start equity

crowdfunding

1) Do you have your team in place?

2) Have you done everything that you can do without money?

3) Do you have a marketing strategy in place to promote your campaign to investors?

4) Have you talked to your own network to assess their willingness to invest?

5) Will you be able to create an awesome video to support your campaign?

Crowdfunding myths

“ “Businesses crowdfund because they can’t raise capital from VCs

or angels

“ “VCs don’t invest in crowdfunded businesses

“ “The crowd is ‘dumb money’

“ “Businesses looking to raise from the crowd are

overvalued

“ “Crowdfunding is an easy way to get investment

Businesses that have grown through equity crowdfunding

Curious Brew raised over £1,750,000

from 900 investors

Oppo has raised £650,011

from 666 investors

Landbay has raised over

£2,600,000 from 970 investors

www.seedrs.com

Thank youtom.horbye@seedrs.com@t_horbye