2. WHO’S MIGUEL?
• International Advisor in Finance, Crowdfunding, Management, and
Entrepreneurship
• Country Manager Spain. Fundedbyme Crowdfunding (Sweden).
• BA International Partners (Spain and USA)
– Investment Events. Business Angel Trainings
• European Business Angel Network - EBAN (Brussels), COO
– 100 members. 28 countries
• Crecer+ Accelerator (Basque Region, Spain). Director
– 15 companies. Investment Events. Business Angel Network
• University Knowledge Transfer Association (Madrid).
Spin-off Departament Manager
• Entrepreneur
• Investor: Partizipa, Samastah, Naturix, BrokerStars, FundedByMe
3. • Who has raised money for their venture
before?
• Who has invested in unlisted companies
before?
• Who has backed / invested a crowdfunding
campaign before?
WARMING UP!
4. • Why crowdfunding?
• FundedByMe
• What’s in a Crowdfunding Project?
• Safe and legal?
• How to do a successful crowdfunding
campaign?
• How to integrate a crowd of microinvestors in
the company (Spain’s case)?
• Success cases
CONTENTS
5. • Finance a project or company by collecting
small and medium amounts of capital from
many individuals, usually through the Internet
• The key lesson: “crowd” first. Then, “funding”
• Models
– Donation
– Reward
– Equity
– Lending
WHAT IS CROWDFUNDING?
7. MONEY VISIBILITY TRUST
•Entrepreneurs
get funded
•Investors earn
money
•Businesses are seen by
thousands
•Investors coinvest and
share risks with
hundreds
•100% legal,
secure and
transparent
WHY CROWDFUNDING?
8. “FBM opened an unexpected
financial opportunity for my
company”
“I reached hundreds of
international investors”
“A new way to impulse innovative
businesses”
WHY CROWDFUNDING?
FUNDEDBYME ENTREPRENEURS
9. “An innovative, trustful and
profitable way to invest”
“An alternative to traditional banks,
which helps entrepreneurs too!”
“A window to new projects and
good investment opportunities”
WHY CROWDFUNDING?
FUNDEDBYME INVESTORS
11. • One crowdfunding campaign:
• Increases quarterly sales 351%
• 28% start-ups raise money from angels in 3
following months
• 1 hour of work on crowdfunding = ROI 813$
• 39% businesses create 2.2 jobs
Source: Crowdfund Capital Advisors
WHY CROWDFUNDING?
12. 2. More than money
–Marketing
–Ambassadors
–Team test
–Market, value proposal, and MVP validation
–100% compatible with other sources of
finance: business angels, VC, participative
loans (ENISA), public money…
WHY CROWDFUNDING?
13. 3. New possibilities
–Richer type of investors
• 70%: “I want to be part of the Next Big Thing”
• 30%: “I want a x4 ROI”
–Crossborder investors
–Shareholders’ agreement proposed by
entrepreneur
WHY CROWDFUNDING?
19. • Why crowdfunding?
• FundedByMe
• What’s in a Crowdfunding Project?
• Safe and legal?
• How to do a successful crowdfunding
campaign?
• How to integrate a crowd of microinvestors in
the company (Spain’s case)?
• Success cases
CONTENTS
21. • Why crowdfunding?
• FundedByMe
• What’s in a Crowdfunding Project?
• Safe and legal?
• How to do a successful crowdfunding
campaign?
• How to integrate a crowd of microinvestors in
the company (Spain’s case)?
• Success cases
CONTENTS
22. • Current legislation allows crowdfunding
– +70 platforms in Spain only
– 1000s of deals closed in Europe in 2013.
– 0 official frauds in Spain. 2 official frauds in USA
LEGALLY SECURE
23. • National cf laws in Italy, Denmark, and France
• Other countries (Sweden, UK) regulate cf by
general financial laws
• EU is touching financial laws and directives,
and would issue a directive to promote
continental harmonization
LEGAL SCOPE
24. • Current legislation allows crowdfunding
• Upcoming legislation (2015)
– Good: market regulation
• Compulsory registration at securities authority (CNMV)
and Bank of Spain
• Protection to retail investors
– Bad: excessive protections due to politicians’ cf
ignorance could jeopardize market’s growth
SPAIN’S LEGAL SCOPE
25. • Current law does not allow us to touch the
money in Spain
• After the crowdfunding round is over, the
invested companies are fully liable for any
legal and fraud issues that may arise between
the investors and them
LEGALLY TRUSTFUL
26. • FBM only presents high quality projects to
investors
• Miguel recognized professional of the industry
(IE, EOI and Deusto Business Schools, EBAN)
• High investment in legal knowledge in 7
countries
LEGALLY TRUSTFUL
27. • Why crowdfunding?
• FundedByMe
• What’s in a Crowdfunding Project?
• Safe and legal?
• How to do a successful crowdfunding
campaign?
• How to integrate a crowd of microinvestors in
the company (Spain’s case)?
• Success cases
CONTENTS
28. • No easy money
– Microinvestors don’t get active by themselves
• No 2nd division money
– As important (and difficult) as angels or VC money
• No alternative but complementary money
– Business angels and public money want to
coinvert
LET’S BE CLEAR FIRST
29. 1. Documentation and investment proposal
2. Marketing and comunication campaign
2 KEYS
30. • Prepare, prepare, prepare
• Time, time, time
• Resources, resources, resources
HOW TO SUCCEED?
32. • Identify, define and locate your targets
• Research their needs, problems, aspirations,
behaviors, demographics
• Typical equity investor persona
– 75% men, in their 30s-50s, urban, highly
educated, net worth +50k€ / yr, engineer, liberal
professional, entrepreneurial background,
business owner, some financial education
1. CLIENTS’ SEGMENTS
33. • Backers
– I want that reward!
• Great value for the backer
• Perceived value => economic value
– Average backing: 50-60€
• Investors
– “I want to be part of the next big thing”
– “I want an x4 ROI, and an exit in 4 years”
– Average investment: 1500-3000€
2. VALUE PROPOSAL
34. – Crowdfunding Plataform
• Description: Video, Presentation, Team Info, Social
Networks
• Documents: Exec Summary, Pith Deck, Financials,
Investment Proposal, Shareholders’ Agreement,
Annexes
• Walls of questions and activity
– Own Channels
• My crowd
• My social and media activity
3. CHANNELS
35. • Goal: find, motivate and build investor or
backer loyalty
– Fast and customized assistance
– Entrepreneurial team directly available for
questions by phone, mail, in events and exclusive
meetings
– Shareholders’ agreement ready
– VIP treatment for VIP investors or backers
4. CLIENTS’ RELATIONSHIPS
36. • Rewards
– Something the backer wants
– 4 levels recomended: 1st level is a “low-barrier”
one (cheap), 4th level is a “no-brainer” (expensive
but lots of value)
– Exclusive, scarce, much more vaule than price
• Investments
– Reasonable valuation, ROI, exit strategies
– Reasonable minimum investment (eg. 500€)
5. REVENUE STREAMS
37. • Upload in the platform professional
documents to stimulate investors
– Business-Angel standard quality
– Proof that your business is possible, viable and
investment-ready
– Document cascade
• Video > exec summary > pitch deck in power point >
business plan > financials > investment proposal
6. KEY ACTIVITIES
38. • Plan and execute a marketing and
communication campaign to reach 5,000-
10,000 targets
– Preparation: 1-2 months
– Minimum: 1-2 persons 2-3 hours / day
6. KEY ACTIVITIES
39. • 100 days before: presentation and web ready
• 80 days: list and first activity on relate fora and
groups online and offline
• 60 days: warm-up campaign in social networks
and own crowd. Build a mail list. First pre-
investments. People in waiting list
• 40 days: identify influencers (bloggers) and
talk with them in person
EXAMPLE OF COMMUNICATION PLAN
40. • 20 days: create campaign’s pitch in the platform
with the feedback received
• 1 day before launch: people queueing to invest
• 2 hours after launch: 20% goal raised. Big start.
Spread the news (press releases, blog posts,
social networks)
EXAMPLE OF COMMUNICATION PLAN
41. • 2 days after: launch party, potential investors
invited, speeches to talk about the launching
success, make people invest live
• During the campaign: request
recommendations to current investors,
organize meetings, webminars, new content
every day in social networks, personal
meetings, Facebook ads
EXAMPLE OF COMMUNICATION PLAN
42. – Entrepreneurs’ team
– My crowd (contacts, social network followers)
– Entrepreneurs’ knowledge
– Partners, consultants, collaborators (FundedByMe
advisors, lawyers, video producers, community
managers, event organizers, journalists, etc.)
7 AND 8. KEY RESOURCES AND ALLIANCES
43. • Platform’s commissions
• Payment Provider commissions (reward)
• Marketing and communication campaign
• Premium service providers (eg. Strategic
consultants)
• Lawyers, notary
• Total Estimate: minimum 10-15% capital
raised. Up to 30% in complex projects
9. COSTS
44. • Why crowdfunding?
• FundedByMe
• What’s in a Crowdfunding Project?
• Safe and legal?
• How to do a successful crowdfunding
campaign?
• How to integrate a crowd of microinvestors in
the company (Spain’s case)?
• Success cases
CONTENTS
45. Solution 1: Direct Investment. No vehicle
• Agile & cheap option
• No need to go to the notary to purchase new
shares (“ampliación de capital”). Just invest &
sign. No problem for foreign investors
• The shareholders’ agreement could establish
limited political and economic rights (or
shares A and B)
• Samastah used this option
LOTS OF PARTNERS. NO PROBLEM!
46. Solution 2. Vehicle: “Comunidad de bienes”
• Fastest & cheapest option
• Potential conflicts should be foreseen in the
shareholders’ agreement
• No notary. Just a contract written by a lawyer
• No problem for foreign investors
• Very limited legal protection
• Investors a fully liable inside the “comunidad”
• Good option for small deals
LOTS OF PARTNERS. NO PROBLEM!
47. Solution 3. Vehicle: SL (Limited Liability Co.)
• Most secure option (but higher cost)
• Foreign investors sign a power of attorney
(cost: 30€) not to be at the notary’s office and
to get the Spanish Tax ID
• Full legal protection to investors
• The most professional, recommended option
LOTS OF PARTNERS. NO PROBLEM!
48. Solution 4. Phantom options
• Private contract that purchases only the
economic rights of the share, not its legal
property
• No notary. No problem for foreign investors
• Brokerstars used this option in their
crowdfunding round
LOTS OF PARTNERS. NO PROBLEM!
49. Solution 5: Join Accounts Contracts (Cuentas en
Participación)
• Easy & cheap
• No share purchase, but a “right” in the
business
• Only economic rights. No influence in the
company
LOTS OF PARTNERS. NO PROBLEM!
50. VERY GOOD OPTION FOR MATURE COMPANIES
• 2 options: participative loans & regular loans
– Best option: participative loans (loan money =
company equity)
• Private contracts. No notary
• No problem for foreign investors to join
• Waiting for the 2015 legislation. Current
legislation poses no problems.
• Available in FBM Spain in 2015
WHAT ABOUT CROWDLENDING?
51. • Why crowdfunding?
• FundedByMe
• What’s in a Crowdfunding Project?
• Safe and legal?
• How to do a successful crowdfunding
campaign?
• How to integrate a crowd of microinvestors in
the company (Spain’s case)?
• Success cases
CONTENTS
52. • FundedByMe. March 2014. 682.000€ in 5 days
• Samastah. March 2014. 76.800€. 23 investors.
• Naturix. To be launched in October. Total deal
66.000€. Already raised 28.500€ from 4
investors (last 2 joined yesterday)!
SUCCESS CASES
54. 1. Innovative, transparent, legal and safe
vehicle
2. Entrepreneur gets capital, an army of
ambassadors, an awesome marketing
campaign, clients, and lots of visibility
3. Attracts business angels and coinvestors
4. Market and entrepreneurial team is tested
5. Capital as serious and as difficult (or easy) to
raise as any other
KEY TAKEAWAYS
55. VC is now what private equity was
before. Angels are now what VC was
before. And crowdfunding is now
what angels were before.”
Hall T. Martin
Director. Texas Entrepreneur Networks, USA
56. Miguel Ángel L. Trujillo, Country Manager Spain
miguel@fundedbyme.com - (+34) 626 007 140
56
THANK YOU!