Grow VC Group and crowdfunding business presentation.

1. HOME STARTUPS PEOPLE
Create new funding solutions
Jouko Ahvenainen, Co-founder & Chairman Grow VC Group
October 23, 2012
Skolkovo

2. Summary: Grow Group
 Grow VC Groups develops new models to build and fund companies
globally
 The Group focuses especially to offer crowd based market place
and community technology, and investment products that can work
with or used by 3rd parties
 Crowd Valley offers platform and backoffice functions for
crowdfunding services
– Already over 400 services in the platform
– #1 equity crowdfunding platform in the world
 Mutual Seed Fund offers a crowdfunding co-investment service
 Grow Advisors, Grow Developers and Grow Global Program offer
services to build startups globally
 Grow VC Group has a growing startup portfolio
2 www.growvc.com

3. Grow VC Group has grown to have globally 5 companies for new
investment models and growing number of portfolio companies
3

4. Grow VC has built a leading position in startup crowdfunding globally and also
got reputation with generic crowdfunding platform and funding models
4

5. Grow VC Group – growvcgroup.com
Finance and Services Infrastucture Portfolio
Samples:
5 21.10.2012 www.growvc.com - confidential

6. Over 16,500 investors
Over 4,300 startups
Users from 200 countries
Almost $35 Million investment money
10% monthly growth
Dozens of investments, millions of money
Over 400 3rd party crowdfunding
network on the platform
The most global market place for equity
6 Nov 1, 2011 www.growvc.com

7. 3rd parties can easily start
crowdfunding on Grow VC service
Full solution: investment community, tools, payments,
backoffice and reporting – set up in a minute
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8. Participating in many crowdfunding
activities
 The team has invested three years into the crowdfunding industry
globally, and positioned itself in the ecosystem globally
 The team has been part of the US Delegation in Transatlantic Economic
Forum, had cooperation with Singapore Government Investment
Company,
 UK Trade and Investment, and is a founding member of Crowdfunding
Regulatory Intermediary Association (CFIRA), Crowdfunding
Professional Association (CFPA), National Crowdfunding Association
(NLCFA), European Crowdfunding Network, cooperation with Securities
and Exchange Commission (SEC) and Financial Industry Regulatory
Authority (FINRA)
 We have a jumpstart on any direct competition with 400+ existing
business customers, ranging from small communities to large networks
of communities like the World Bank
8 21.10.2012 www.growvc.com - confidential

9. Grow VC – crowdfunding media
 Podcast - 150,000+ listens total for 103 episodes; guests incl.
Congressman Patrick McHenry, Randy Mitchell (US Government), Eric
Ries, Michael Robertson (founder mp3.com), David Hornik (August
Capital) etc..
 Blog – over 450 blog posts total, 1M+ unique readers; top posts shared
thousands of times on social media
 YouTube channel - 121 videos, 5,000+ video views
 Social media - 10 000+ people reached weekly
 Highly ranked blog – e.g. ranked #17 startup blog in the world in April
2012
 Events - 30+ keynote speaker slots at events such as SXSW, WBT
Innovation Marketplace, EBAN Conference, Crowd Conf, Digital Matters
Singapore etc.
9 21.10.2012 www.growvc.com - confidential

10. Case: Cintep, Australia
First $100,000 from crowdfunding, excellent progress since then
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11. Case 2: The Tip Card, USA
Money and resources (Work Investments) thru crowdfunding
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12. Networked Society is coming
It also changes business and funding

13. Building ecosystem
 Grow Advisors is the first really global investment bank
that focus on crowdfunding
 We must see crowdfunding in a larger way
- It is not only $100 small investments or donations
- Generally speaking it is create more open, lower transaction
cost market places for different kind of purposes with different
instruments
 The target is to activate more investors to participate,
help investors to diversify better, and get the market
more global and effective
13 Nov 1, 2011 www.growvc.com

14. WE HAVE A DREAM:
more equal opportunities,
where companies
and investors unite
to accelerate innovation

15. Not to replace but offer more
 Friends and Family market = $41.6 B, while the existing VC and Angel
markets combined = $27.4 B (GEM, 2011)
 Potential to create a "$300B market in the US" - Fred Wilson
 Current SME funding market is much larger than the angel and venture
funding market. Different instruments in the crowdfunding market for
different types of startups, e.g. business loans and convertible bonds
 "A healthy crowdfunding marketplace will create a 10% increase in new
businesses and 170,000 new jobs over the next five years" - Kauffman
Foundation
 Future verticals being explored:
- Real estate, funds, lending, co-investment models, commodities
- Framework set to be similar as outlined by JOBS Act
15 21.10.2012 www.growvc.com - confidential

16. global
transparent
open
collaborative
efficient
scalable

17. Virtual Silicon Valley

18. A new language:
Read & write, participatory, conversational:
markets are conversations, marketing is a
conversation, business is a social science!

19. Co-creation + networked
economics + communities of
interest can be and are,
proven & powerful platforms
and processes to stimulate
innovation and commerce

20. A
cultural
challenge
…for corporates
…for governments
…for human beings

21. To resist will
lead to
financial and
organisational
exhaustion

22. Regulation

23. JOBS Act in the USA
23 Nov 1, 2011 www.growvc.com

24. Activities around the world
 JOBS Act expected to be implemented by January, 2013
 US regulation is a leading example for other governments (e.g.
Canada, UK)
 The global crowdfunding infrastructure is going to be put in place
within the next 5 years; those that get market share of that
infrastructure will have an extremely strong position against the
competition with very stable long term revenue
 European Crowdfunding Network and Transatlantic Economic
Forum
24 21.10.2012 www.growvc.com - confidential

25. Ecosystem is needed

26. Crowdfunding and ecosystem
 It is typically important to get crowdfunding to work
with other investment models
- Get other investors and money
- Help to manage investments
- Continuity for the next funding rounds
 Investors can also offer other value added
 There can be several co-investment models, passive
or active
 It is typically important to build co-operation with
business angels, VC’s and incubators
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27. A deal flow and investment model example
27 October 21, 2012 www.growvc.com

28. Several investment models
1. Direct investments
- An investor invest directly in a company, become a shareholder,
company can have hundreds of small shareholders
2. Investments through an instrument
- An investor can select a company he/she invest in, but the actual
investment is done by an investment company that aggregate all
investments together, the investment company is the shareholder
3. Crowdfunding of investment instruments
- Crowdfunding model is used to raise capital in a fund and the fund
makes investments
4. Co-investment models
- Different models to make co-investments with crowdfunding
28 21.10.2012 www.growvc.com - confidential

29. Models to use with Grow VC Networks
• Co-investors can be e.g. business angels, VC’s, or funds
1. Co-investment partners
a. Partners follow crowd-investments, typically no automated
investments, but use crowdfunding to filter investment opportunities
b. Leading investors offers cases to crowd, and crowd follow them
2. Syndicate models
- Can have two models as above, but formalized co-investment
models with pre-defined models, shares and responsibilities
3. Built-in investment instruments
- Investment instruments that are built to work with the crowdfunding,
e.g. automated co-investment
- The instruments can be like traditional funds or modified versions
29 21.10.2012 www.growvc.com - confidential

30. Go With The Crowd
• Grow VC is building a special co-investment
instruments
• The instrument and concept is built especially for the
crowdfunding co-invesments
• Investment decisions are based on crowd
investments, i.e. if a company gets 70% from crowd,
the rest 30% is invested from the co-investment
instrument
• Investors can join the instrument online, by defining
their investment criteria like total sum and the number
of companies (diversification)
• The instrument is launched in six months
30 21.10.2012 www.growvc.com - confidential

31. Future
• Crowdfunding is here to stay, equity crowdfunding is
just starting to grow
• Crowdfunding is not to replace all other models or
solution for needs
• It is crucial to build an ecosystem where different
investment models work better together, including
crowdfunding – new solutions are needed
• Crowdfunding is not only for startup funding, it will
have influence on the whole finance sector to make it
more effective
31 21.10.2012 www.growvc.com - confidential

32. HOME STARTUPS PEOPLE
“You don’t have to be
Steve Jobs, to be
an entrepreneur”

33. HOME STARTUPS PEOPLE
”You don’t have to be
Bill Gates to be
an investor”

34. HOME STARTUPS PEOPLE
”Everyone must start
somewhere”

35. CONTACT
Jouko Ahvenainen
Grow VC – Co-founder & Chairman
jouko@growvc.com
+44 7889 833 165 (UK), +1 646 363 6664 (US)
http://www.growvcgroup.com/
Twitter: @growvc
Facebook: Grow VC
Podcast: ”Grow VC” in iTunes
35 21.10.2012 www.growvc.com