P2P equity site Crowdcube is a winner in the Smarta Top 100 Award 2011. The Smarta 100 is “a celebration of the most resourceful, original, exciting and disruptive small businesses in the UK“. Crowdcube has been selected in Top 5 for “Innovation”. Users can still vote for their favourite company on the Smarta site.
p2p equity
P2P Equity Service Seedmatch Launched
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: “… the silent partner’s holding are structured at Seedmatch to participate on dividends and capital gains of the start-ups. It was important for us to offer a good solution for both sides – for the micro-investors a fair deal and for the startups a manageable financial 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
Review of Symbid: My first investment in a startup
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.
First Business Offer Fully Funded at Crowdcube
On the peer-to-peer equity market Crowdcube (see earlier coverage) the first business succeeded in raising the desired funding in exchange for equity. Yesterday bodycare business Bubble & Balm hit its funding target of 75,000 GBP. The amount was funded by 82 investors which will in return receive 15% of the equity of the company.
I am one of those, albeit with a symbolic amount of 20 GBP invested, which means that in the future I will own a whooping 0,004% (=1/25000) of Bubble & Balm, once the transaction is legally finalized.
Investing so far was very easy – I contributed my 20 GBP (plus fees) via Paypal. There is the option to pay via bank transfer too. After uploading the money to the account I then selected the business to invest to.
For the moment it is fun to participate in this first public p2p equity process in the UK and I see it as an experiment with the ability to gain first hand experience how it proceeds.
I selected Bubble & Balm as an “investment target” for three reasons:
- It was clear that this pitch would be the first to fully fund
- It is an established business that already operates since 2009, not a startup with a mere idea
- The information provided in the pitch is sound (business plan, financials, background of founder)
The bodycare business will use the investment to expand its award-winning product range, increase marketing activity and to meet increasing demand from retailers such as Waitrose, Oxfam, Planet Organic and a growing number of independents.
Interview with Korstiaan Zandvliet, Managing Director Symbid
Symbid was first covered in the P2P-Banking blog two weeks ago. IÂ interviewed Korstiaan Zandvliet to get a deeper insight into the service.
What is Symbid about?
Symbid is the first online investment platform where the crowd directly invests in the equity of a start-up or existing company! Everybody can be an investor, each part has a nominal value of 20 EUR and you decide how many parts you would like to invest. The minimum is 20 EUR, the maximum is 2,500,000 EUR! The Symbid way of directly investing in equity is unique. It makes investors partial owners of the fully financed (newly founded) company. Entrepreneurs use Symbid as a quick, simple and fun new way to obtain start or growth capital with help from the crowd. Additionally, once fully funded an entrepreneur has the luxury to interact with his community of investors within a closed online collaboration workspace!
How did you get the idea for Symbid?
During my master degree in Entrepreneurship and new business venturing I noticed that many of my classmates did have an entrepreneurial dream but were reluctant to act upon it due to financial constrains. On the other hand I noticed that people became more connected using social networks such as Facebook and Twitter. By combining these ideas I came to the conclusion that social networks could also be used to communicate investment propositions to a large audience.
What’s the process for entrepreneurs?
Symbid provides an online platform where companies and individuals are able to submit a business idea (proposition). When you register your idea at Symbid, you indicate how much capital is required to start or grow your business. Users search for ideas they believe are viable in generating future profits. Investing is possible from €20,- per part and payable through all accepted payment methods.
Symbid uses a secure separate bank account for all investments on the platform. This way investors and entrepreneurs are assured that investments are used for no other purpose than the financing of business ideas. Until the funding goal is met, an investor has the possibility to freely withdraw his investment from Idea A and for example invest it in Idea B. This situation could occur when an entrepreneur has not made the right adjustments to satisfy his investor. When the target amount is met, the total invested amount, investments are fixed and can no longer be withdrawn.
When an idea is fully funded and all the final investors are known, they are gathered in one legal entity. The process occurs online and is completed when the entrepreneur and investors are being granted access to a secured online collaboration community. Subsequently, the entity buys the predetermined amount of shares with the attracted funding. People within the collaboration community can join forces to bring the newborn company to a successful organization. This online community offers various collaboration tools to actively manage and monitor the progress of the company and interact as one with the entrepreneur or management team. Every individual share is tradable, which makes it even more interesting to invest through Symbid and become a shareholder in a newly founded or existing company.
How is Symbid more attractive than other potential sources of capital (VCs, business angels, banks, …) for founders?
With Symbid, entrepreneurs are able to onboard a large group of shareholders combined into one entity. This group of people can be used for market research but also as launching customer group. By giving away equity to his investors, the entrepreneur can make sure all incentives and motivations are aligned from an entrepreneur perspective as well as from an investor perspective. Hereby an entrepreneur’s crowd becomes a think-tank for the respective company.
In comparison to the cost of capital, the 5% success fee is for most businesses lower than the average costs of receiving capital via a bank. If these businesses would get financing from the bank at all.
Who is able to invest? And what are the advantages?
Symbid allows investments from 20 Euro onward. Everyone can invest however for the moment we only serve Dutch companies. All investments done via Symbid are transferred into shares with voting rights, direct transfer- ability and dividends. This leads to the highest chance of a sound financial return, financing success and liquidity. Continue reading
Symbid Launches P2P Equity in the Netherlands
Symbid is the first service to launch the p2p equity concept in the Netherlands. Most of the site is available in Dutch only, but the info film is in English so I will embed that here. Apparently there will be an English language version of the site soon.