2. about me
thecrowdcafe.com
leading provider of research, data and analysis on the
global crowdinvesting industry
localinvestors.org
live, think, invest local
Jonathan Sandlund
j@thecrowdcafe.com
@jsandlund
!2
4. rewards vs. investment
Reward-Based
‣ Receive no financial return
‣ Rewards / Perks
‣ Legal today
Investment-Based
‣ Securities offered in return
for crowds’ investment
‣ Equity
‣ Debt
‣ Revenue share / Royalty
‣ Blended
‣ The JOBS Act
‣ Title II vs Title III
!4
5. The Legalities of Investment Crowdfunding
Title II & Title III of the JOBS Act
Jonathan Sandlund | @jsandlund
!5
6. The JOBS Act
Title II
Title III
‣ Lifts ban on general solicitation
and advertising on security
offerings to accredited
investors
‣ Businesses Raise up to $1mm
in 12-month period
‣ Amended Form D (Proposed
changes only—currently NOT in
effect)
‣ Rule-making includes SEC and
FINRA
‣ Effectuated September 24th,
2013
‣ Proposed rules released.
Commenting period open
through January 2014
Crowdfunding for
Accredited Investors
‣ Investors tiered limits on
investment amount
Crowdfunding for
Everyone
!6
10. Title II In Action
Global Deal Flow
“As a result of the new SEC regulations, effective today, all of
OurCrowd’s deals will be posted publicly for US investors
on OurCrowd’s website as well as on social networks, email, and
through online and offline advertising and public meetings.”
!10
11. Title II Impact
‣ Brings dramatic efficiencies to private capital
markets
‣ Geographically indiscriminate
‣ Creates frictionless access to deal flow for
investors
‣ Creates frictionless access to investors for
businesses
Jonathan Sandlund | @jsandlund
!11
31. Macro-Data: Selected Sample
Equity
180 Deals
$132 Million
Equity
11 Deals
$954k
* Selected sample of platforms; as of 12/4/13
Debt
3,142 Deals
$294 Million
Equity
83 Deals
~$26 Million
Equity
32 Deals
$3.3 Million
Equity
23 Deals
~$25 Million
!31
32. $300+ Million in Crowdfunded Security
Transactions...
300+ Equity
Placements
2,900+
Loans
!32
33. The Disruption — Not If, But When
Jonathan Sandlund | @jsandlund
!33
34. Investment Crowdfunding
Two mega-trends colliding
Technical
Disruption
Entrance of the internet
into private capital formation
process.
Crowd
funding
Cultural
Disruption
A desire to connect more
meaningfully with the
things we buy, the things
we do, and the things we
invest in.
!34
36. Nearly all service industries re-imagined by
the internet...
Source: Quora
Technical
But not fundraising... yet
!36
37. A fundamentally more efficient
capital formation process
Technical
A Big UK Bank
Source: http://www-core.nesta.org.uk/library/images/NestaBanks.jpg
!37
39. Technical Disruption
Summed up...
✓
✓
The first major change
in security law in 70+
years;
Invites the internet into
the capital formation
process.
Technical
What it means...
✓
Processes moved online
✓
Efficiencies realized
✓
Incumbents with
traditional cost structures
obseleted
✓
New markets served
40. Cultural
But it’s not just structural change
driving the disruption.
It’s also cultural.
!40
41. Chicago Booth: 13% of Americans trust the stock
market
Cultural
Chicago Booth Financial Trust Index
Distrust is pervasive
!41
42. Cultural
Today
little alternative to public markets
Tomorrow
individuals empowered to invest in the the companies,
people and causes they believe in
!42
