Dutch Symbid will power the new platform Herofunding.eu. Herofunding is a new crowd funding platform of Idea Fabrik Plc., creators of the HeroEngine, an integrated platform for online game development and operation. The platform is scheduled to go live in in the beginning of April 2012 and solely concentrates on the video game industry. Interested game developers are already invited to sign up their projects. Once Herofunding is launched the crowd can directly invest in these game projects in exchange for an equity stake in the project. Hint: since Symbid users will also be able to invest, you can already sign up as an investor at Symbid, if you are interested to invest in game projects – then you won’t miss the launch. HEROFUNDING.eu uses a plug and play, white label crowd funding solution for video games developed by Gambitious.
Investments are possible for as little as 20 Euro. Both the investor and the developer (company) must be located in the EU.
In August I discovered Appbackr. Appbackr is a marketplace where everyone can invest in IPhone apps and Android apps. Crowdfunding for app development? That sounded very interesting and innovative. I read the information supplied and the way it works is that investors prefund future sales of apps. The investor buys the copies at a lower wholesale prices and makes a profit later, when the copies actually sell in the app store. Clearly the risk is the uncertainty as to when the prepurchased copies will sell or if the sales volume will not be high enough at all and the copy will not get sold, which will result in a total loss of that investment.
Funding is done during an open bidding period. The developer lists his app on the marketplace and provides a description and information what the funding will be used for. Provided a minimum reserve is met, the funding will be successful, even if the maximum amount the developer seeks is not reached during bidding period.
Concept versus Live Apps
Appbackr differentiates between ‘Live Apps’ and ‘Concept Apps’.
A ‘Live App’ is already online in the Apple or Android Store and has started selling. For most Apple Apps Appbackr provides sales stats, which allow an educated guess how good the app is selling. The markup investors earn on Live Apps is 27% (once they are sold).
A ‘Concept App’ is an app that is under development or just an idea with a plan. The developer states a date, when he plans to launch in the store. For ‘Concept Apps’ the markup is 54%. The higher margin reflects the added risk for possible developing problems, which could in a worst case scenario lead to the app never making it into a store with zero copies sold.
A major difference between these two kind of apps is that the payout for ‘Live Apps’ is ‘sequential’ whereas the payout for ‘Concept Apps’ is ‘simultaneus’, meaning that those investors, who invested first during the bidding period ,get paid first for sales of Live Apps (you are informed how many copies need to sell before your copies will sell). For the ‘Concept Apps’, each backr will receive a fraction of each sale. That means you only get full payout for ‘Concept Apps’ after the last funded copy has been sold, too.
I had a good start – everything looked promising
After a lot of reading and browsing I did my first purchases/investments in early September. And it looked like I had a lucky start with good picks.
Screenshot of the Appbackr Dashboard for my Apps in status ‘Completed’. I unfolded the details for the AppZilla 2 app and the iScape App. It shows that ‘my’ 100 copies of iScape sold over the course of only 7 days. For the AppZilla 2 app it went even better. It took only 1 day for all ‘my’ 500 copies to sell. Note that Appbackr calculates annualized profit solely on the duration of the sales period. De facto I purchased the copies on Sep., 5th and was paid back $330.60 on Nov., 7th. My money was tied up for roughly two month which translates to a tremendous annualized profit of roughly 160%.Continue reading →
Starting next weeks Americans can help to jump-start the economy sipping coffee at Starbucks. By donating 5 US$ they help to fund community loans to community businesses—including small businesses, microenterprises, nonprofit organizations, commercial real estate, and affordable housing— all across the country committed to creating and sustaining jobs. Donors who contribute $5 or more will receive a red, white, and blue wristband with the message “Indivisible.â€
The initiative is called Create Jobs for USA. Loans will be given out by the Opportunity Finance Network (OFN), which represents a nationwide network of 180 Community Development Financial Institutions (CDFIs) set up to provide financing to community businesses in underserved markets where accessing credit through traditional lending institutions is challenging or not available. The Create Jobs for USA Fund at OFN will be seeded with a $5 million contribution from the Starbucks Foundation.
The donations to “Create Jobs for USA” will not be loaned to the CDFIs. They will be turned into equity that can be leveraged. If that equity can be leveraged 7 to 1, that would result in 350 million US$ loan funding, if Starbucks customers donate 50 million US$.
Last week, following 2 years of preparation, Seedmatch launched the first p2p equity service in Germany. Startups can pitch for up to 100,000 EUR (approx. 142,600 US$) funding. Investors can bid amounts starting form 250 EUR.
Due to the legal and regulatory situation Seedmatch uses a construct (“Stille Beteiligung”), where investors do not become shareholders of the funded startup, but rather participate on the profits of the company. Founder Jens-Uwe Sauer says: “…thesilent partner’s holding are structured at Seedmatchto participateondividendsandcapital gainsofthe start-ups. It was important for ustooffera good solutionforbothsides– for themicro-investors afair deal and forthestartupsa manageablefinancial model.” (translated from German by P2P-Banking.com).
The startups have the choice to buy-out investors after 6 years. The Seedmatch model thereby gives much more control to startups and less rights to investors in comparison to Symbid and Crowdcube. On the other side the raised funding is not paid out in one sum, but rather in steps according to milestones reached (which were specified in the pitch). Seedmatch charges startups 5 to 10% of the raised amount. Continue reading →
Time for me to personally test Symbid (see earlier coverage) and try out how smooth the process is and how easy it is to invest in a startup with Symbid.
No matter how remote you live – be it India or Argentina – you can invest in an internet startup online within minutes and get shares – all you need is a credit card
This article is a step by step review of the signup and investment process.
If you have not read the previous articles, watch the brief video on the Symbid homepage which explains the concept. First step to use Symbid is the free registration. Most parts of the website can be used without a registration, but registration is needed to view detailed company information and to invest.
To register either click on “Join Symbid” via “Start Investing”. Instead of the registration form I expected to see, I got this screen:
It wasn’t obvious at first to me that I need to click on the symbid key symbol to reach the registration form (I did not want to use my Facebook or Twitter account). Next hurdle was the missing country field in sign-up (Symbid is open to international investors – seems they forgot adding it when opening to international). I solved it by adding country into the city field (city, country).
Once registered, I could add some information about me on the profile.
To start investing the next necessary step is to ‘upload’ money (minimum is 20 Euro which equals approx 29 US$). To upload money you first request a security code. They send an email with a link. After I clicked on it I could setup a personal 4 digit code.
With that code the process to upload money is started (‘upgrade Balance’). The selection allows for 20 Euro steps, as 20 Euro is the minimum unit that can be invested.
P2P Lending and crowdfunding are two totally different concepts you say? True so far. P2P Lending means the lender loans the borrower money. The amount is repaid together with interest. Crowdfunding is usually applied to describe concepts were a crowd decides to finance project. The motivation there is to see the project getting done. The funds are not paid back but spent on the project and investors are sometimes rewarded with the art or products that are a result of the project. A good example for a crowdfunding platform is Kickstarter, which P2P-Banking.com covered earlier – see article: ‘Kickstarter – Pledge Money to Fund an Artist‘.
Moneyauction creates ‘Reward Funding’ – merges P2P Lending and Crowdfunding
