Announcement Brokerstars

Some weeks ago we received worrying reports from investors in Brokerstars, who crowdfunded on FundedByMe April 2014, we have since tried to understand the problem by proactively reaching out to the entrepreneurs through various channels with no success.

What we have received is some inside information, but we cannot confirm whether the information is true or false.

What seems to be a fact, however, is that due to a fall out between the founding team members they have not delivered on the plans set out. Unfortunately we believe this means that Brokerstars can be considered a failure.

It is therefore our duty as an open and transparent platform to inform you about this.

What have we learnt?
Investor relations and communication is key in any company and by not communicating with your network properly you do not only miss out on opportunities but in dire times this can mean the difference between being able to cope or to fail. Furthermore, by not communicating, you risk your reputation. Failing is one thing, but failing from the wrong reasons something completely different.

Moving forward we will now start to develop a plan that will involve all future entrepreneurs. Most likely a binding contract or clause holding them to a communication plan. Investors putting their trust in entrepreneurs should never be kept in the dark.

For more information the former CEO of Brokerstars Jesus M Santos has made himself available and can be reached via email – txsantos@gmail.com

Please note that mr. Santos is not responsible for the failure rather the one most willing to cooperate.

3 Key Trends Will Change Crowdfunding in 2015

3 Key Trends Will Change Crowdfunding in 2015

Many people wonder what might happen in the future. We at FundedByMe don’t have a crystal ball, but we can forecast how the year 2015 will be for crowdfunding in Asia. So here it is.

Right now you can see 3 main phenomenons in the APAC region that lets you predict the future of crowdfunding:

  • The social / mobile / chat obsessed citizens
  • Economics of E-commerce and E-finance
  • Innovation in reducing the unbanked rate

You will find some of the numbers below. But what do they actually mean for the industry? Let’s take it step by step. More and more people who spend their lives on mobile chat applications will result in changing global behaviour patterns. Not only we will be able to do anything using our mobile devices, but also will expect shorter offers, long creditable relationships and faster payments that we can handle with any smartphone. And you know very well where there is demand, there is supply.

Strong growth of e-commerce is usually the first step of strong growth in P2P finance. If you want to talk about e-commerce market in Asia, the relevant word would be “explosion”. And so with crowdfunding you should probably use “booming” as well. In China alone the market size is estimated to be $40 billion USD, where just a couple years ago the industry didn’t exist at all. The Asian states are being more aware of the role of the industry and start to implement regulations for it – Malaysia was the first country doing this (and by the way, FundedByMe with its partner are one of the first companies receiving the license for equity based crowdfunding).

Finally, crowdfunding significantly helps to decrease the rate of people who are not banked at all or are underbanked. Why? Because it can be used by people who have no credit history! Just check what happened in Kenya thank to M-PESA, a Mobile Phone Payment System. Right now the number of M-PESA users is higher than bank account holders.

Want to learn more details? Watch the performance by Adrian Koh, FundedByMe General Manager in the APAC region, and check a presentation by him.

Download presentation here.

Asia – a new big thing

Asia – a new big thing

“It seems Asia has been bitten by the crowdfunding bug” – wrote Mary Ann LI. Reyes in “The Philippine Star”. Well, she’s 100% right!

FundedByMe has stepped into South East Asia last year .The timing turned out perfectly enough to let the company settle down a bit, gain momentum and take the leading position in shaping the crowdfunding industry.

Just in May, FundedByMe with CoAssets and New Union has formed a new three-party crowdfunding alliance in Singapore. With a combined record of S$200 million dollars raised through crowdfunding campaigns in 2014 and growth expected to accelerate in 2015, the three-party alliance has set its sights set on paving the way for FinTech to flourish in Asia.

The alliance is based in Singapore as a hub for the region, because of the business climate and favor of local authorities for entrepreneurship. Also the understanding of crowdfunding phenomena is raising there. In February the Monetary Authority of Singapore published a consultation paper, setting out proposals and clarifications to facilitate and better regulate how corporates may have access to alternative sources of funding through equity crowdfunding.

Right now the consultation is still pending but this month, good news came from Malaysia. The Malaysian Securities Commission as the first of this type of institution in the region offered equity crowdfunding licenses. FundedByMe and it’s partner Alix Global Sdn Bhd, have been awarded one of six of these licenses! The license allows FundedByMe to start operations in the new market.

That’s not the end. Djenee, a start up focused on personal on-demand digital concierge service raised almost S$500,000 on the first day of the campaign on FundedByMe. The campaign set a new standard for equity crowdfunding in Asia.

“We’re extremely excited about partnering with Djenee to raise their very first round of funding, which broke records for Asia and with investors from all around the world. This is a start for crowdfunding in Asia and we expect South-East Asia to exceed US$1 billion as a market by itself in the next few years. FundedByMe will give companies a global stage for companies in Asia to find investors, so that these companies accelerate and build powerful momentum from day one,” said Daniel Daboczy, CEO and Co-Founder of FundedByMe.

 

Carin Wester beats a record in crowdfunding for the fashion industry

Carin Wester beats a record in crowdfunding for the fashion industry

Carin Wester – a Swedish fashion brand running its crowdfunding campaign on FundedByMe – has raised the first 110 000 euro in the first 7 hours. After 2 days investors committed 200 000 euro on its shares. This is almost half of the crowdfunding goal needed for global expansion of the brand.

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Watch the 5 minute video pitch by Anton Granlund, CEO of Global Retail and a major shareholder of Carin Wester

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This was the fastest raised 110 000 euro via crowdfunding in the history of clothing brands in Europe. Only 7 hours were needed to achieve this milestone. The next hours were comparably successful – after 2 days investors declared to spend double as much for the company’s shares.

Carin Wester, one of the so called Swedish fashion wonders, known for unique forms and silhouettes combined with premium materials – needs capital for its international expansion. A year ago Global Retail came in as an investor and management of the company with the aim of creating growth and profitability. Very shortly the company is opening its brand stores, mainly in Scandinavia, Germany, Japan and Bennelux, as these markets already perform well.

However, the company did not choose to go the traditional route, by trying to get the attention of major investors or venture capital companies. The more natural choice for them, turned out to be a crowdfunding – a way of raising funds that’s increasing in popularity, allowing a group regular people to individually invest small amounts in exchange for shares of a company. This method is very well suited for companies that already have a finished consumer product – something that anyone can relate to, see and feel.

“We want to partner with people who love our brand, like our existing customers who are good ambassadors and want to make this trip with us and also highlight our brand to possible new customers,” says Carin Wester, the founder and creator of the brand. She believes that this is the future way to seek investment and that more will follow their example.

“The secret of the success of the crowdfunding campaign by Carin Wester lies in their perfect preparation. They treat crowdfunding as their next marketing campaign, which it is. Building tension in social media, catching attention of journalists, refreshing information on their website – all these elements pay their dividends now. Crowdfunding allowed the brand to reach new customers and achieve the snowball effect” explains Daniel Daboczy, CEO and co-founder of the FundedByMe platform, on which the Carin Wester crowdfunding campaign is listed.

In the 10 years since the Carin Wester brand was founded, it has won numerous prestigious awards in its home market. Recently the company experienced a number of changes: the company structure was optimized, more focus was put into sales and services, products are more balanced between commercial and high fashion and all costs has been reviewed.

“Now we can see, we are facing the right direction and are ready for the next step in making Carin Wester more accessible to a wider market. This sales season is becoming a huge success with an increase of at least 200% compared to the previous year, which is proof that the changes made have had a positive effect. Long-term a turnover of 25 million EUR within 10 years is expected” says Anton Granlund, CEO of Global Retail and a major shareholder of Carin Wester.

Global Retail Group was founded in 2007 and has since then mainly successfully introduced and expanded a retail business together with G-Star Raw. Global Retail has focused on building the strongest sales force in Sweden and has for three consecutive years (2013-2015) been ranked the number one service provider in fashion retail. Alongside operating stores, Global retail has also successfully performed several consulting assignments, for example for Björn Borg.

Eggs Inc – this is how history began

Eggs Inc – this is how history began

This the history of how Eggs Inc was laid: a journey to France and discovering a niche. Five years later you can visit the world’s first healthy fast food restaurant on Regeringsgatan 26, Stockholm. 

– I wanted to open a restaurant but I can’t cook. It took me about a year to figure this out and find Andreas Hedlund, the Chef of the Year in 2002, Fredrik Önrup, the revenue manager, and Kent Jonsson, the egg farmer – says Dan Lorentzon, founder of the Eggs Inc.

What was the most difficult part about setting up their business? Well, you may be surprised: finding a location for their restaurant. Landlords usually prefer big players with well recognisable brands.

A survey from Svenska Ägg, the Swedish trade association of companies operating in the egg industry, says that 97 percent of Swedes like eggs. This means there is huge demand. Because of the nutritional value of eggs and the fact that Eggs Inc. doesn’t have direct competitors, the perfect recipe is created for a dynamically growing business. That’s why they plan to develop a larger franchise chain in Scandinavia first and then the rest of Europe.

Watch the short video about Eggs Inc.:

Why European crowdfunding platforms will beat the US ones

Why European crowdfunding platforms will beat the US ones

Although Unites States is home to the most recognizable crowdfunding platforms, Europe has very strong advantages in the field of equity crowdfunding. If negotiations regarding the Transatlantic Trade and Investment Partnership (TTIP) agreement are finalized one day, European FinTech startups will be in a great position to beat the world’s biggest peer-to-peer finance market.

By Daniel Daboczy, CEO and co-founder of FundedByMe

FundedByMe_Daniel Daboczy_CEO_2One of the hottest business topics in the recent weeks is the Transatlantic Trade and Investment Partnership (TTIP). The negotiations between the American administration and the European Commission are held behind closed doors which leads to uncertainty and results in speculation on how the Treaty could be harmful for European business. Will it be? Well, I don’t know but I believe that there will be some disadvantages. However, TTIP means also big opportunities for enterprises from the old continent, especially the innovative ones.

I have just come back from my tour of American leading crowdfunding companies. They are observing carefully what’s going on in the market across the ocean, especially when it comes to equity-based crowdfunding.  Right now their managers responsible for their homeland market cannot do much more, because of legislation. Despite that President Obama signed The Jumpstart Our Business Startups (JOBS) Act in 2012, the Security Exchange Commission still has not finalised the implementation process, which was supposed to happen before  1st January 2013. Without this, no shares in crowdfunding model can be offered to the public (except friends, family and accredited investors), if the company is not registered. This is, however, pretty costly and very few of entrepreneurs in the early development phase of their business can handle this.

But one day the legislation process should be finalized and both JOBS and TTIP will become the new reality. What does it mean for the crowdfunding business?

Experience Advantage

Due to dynamic increase in equity crowdfunding, which can be expressed by more than hundred percent of growth annually, Americans will not loose a moment to enter the competition.  Well, some are already in – in the States they already operate platforms with offers for accredited investors only. Since September 2013 these platforms raised $400 millions for entrepreneurs listed on them.

This is, however, still a drop in the ocean of the US startups – in 2011 alone Facebook Inc. raised $50 billion from private investors.  In terms of targeting a wider audience the US crowdfunding platforms will have to start from scratch. On the other hand European platforms have run equity-based crowdfunding for couple of last years now.  Crowdcube (UK), Ulule (France) or FundedByMe (Sweden-based but operating worldwide) hold firm positions at the global crowdfunding scene.

There is no better school than practice. Examples? Here you go. Groups of funders interested in rewards and those who invest instead of equities are very different. However, it is possible to convert the first one into more profitable segment. To do it you need a know-how gained from real life operations. Europeans should already have it.

Legislative Advantage

From an American point of view the European market is not transparent/easy. Around 510 million citizens is a significant number, but they live in relatively small countries, where legislation varies significantly   from country to country. Even the interpretation of some particular provisionslooking similar on paper may be differ, depending on the legal landscape. Not so long time ago the Spanish government considered to significantly limit opportunities for peer-to-peer lending, when the British Financial Service Authority incorporated the provisions in its regulations just couple months later.

Although there aren’t many crowdfunding companies operating in cross-border mode, these that  do know how to deal with these issues. FundedByMe has its own representatives in 7 countries on 2 continents, but lists fundraising campaigns by entrepreneurs from many more. Because of this FundedByMe is much more used to balance between various watchdogs and fulfilling their requirements.

Looking at this from opposite perspective, American market should be much easier for European platforms: one law, one interpretation and ca. 320 million customers. A perfect opportunity for scaling up the business.

Advantage in mindset recognition

Last, but not least on that list, is a customer’s approach to apotential equity offer. The EU probably wouldn’t be so grateful for US crowdfunding companies as they may expect. Although capitalization of equity market in UK in 2013 was 121% of GDP, in Lithuania, Latvia and Cyprus it was less than 10%. There are many reasons for this , but one of them is that people in different European countries are much less keen to allocate their savings in such sophisticated financial instruments.

Americans are considered to be just the opposite. Investing and actively taking care of your own financial situation is one of the commandments of a successful Yankee. From a business perspective it is much easier to convince those who are familiar with the process to particular brand rather than running a long-term category awareness communication campaign. The US companies which dream about conquering America will have to do the first,; Europeans – the latter. Assuming that both parties will be equally determined in achieving their business goals, the competition opened by TTIP and JOBS will be really fierce.

 

The lead investor

The lead investor

What is a lead investor?

When raising capital for your company finding a “lead investor” is a critical piece to the overall puzzle.

A lead investor is someone that is willing to put in time and effort to help you secure that first investment.
This person won’t put in the whole amount needed, but will give you that initial feedback and help prepare you for further conversations to convey trust and quality with other investors.

Note: Typically this person might negotiate a better rate, this is okay as long as they put in the work needed. Make sure that this investor is willing to help with introductions to other investors.

Lead investor = trust and quality

When you have a lead investor it will make it easier to connect with other investors because this shows traction.

From a philosophical point of view if you walk past a restaurant that is empty you will just keep walking, right?
Why send a bunch of investors to a campaign page that shows zero traction.

If an investor can see that other investors are onboard, then in their eyes this means that the deal has been vetted and they are more likely to stay and engage with your campaign.

Note: A lead investor should not be your mom or dad. This does not convey trust and quality.

Size matters

Typically speaking a lead investor will put in 15-20% and make themselves available to speak with other investors.
A lead investor is different from sweat equity, make sure to get that first commitment.

Don’t start a round without one

We won’t stop you from starting your round if you don’t have a lead investor, however having one will make your life easier when taking in capital for your company during an equity crowdfunding round.

Example companies that have used lead investor(s) in their round

Public Announcement – SellAnApp discontinues it service

Public Announcement – SellAnApp discontinues it service

Not everyday is a great day in the life of an entrepreneur. For Dutch app platform SellAnApp, we just found out that they have notified their shareholders that they will file for bankruptcy.

SellAnApp was featured on FundedByMe in 2013 in a joint campaign by FundedByMe and the Dutch crowdfunding platform Symbid, who brought in the case. To both FundedByMe and Symbid, SellAnApp is the first case where a crowdfunded company discontinues its services.

Through the campaign SellAnApp got a select few of FundedByMe’s members as shareholders, amongst those are senior advisors to FundedByMe itself and well-known investors.

Since transparency and communication are core values to us at FundedByMe, we want to share both successes and failures. After all, life gives us both and charges us to learn from them.

What then can we learn from the SellAnApp case?

  1. It is risky to invest. We place great emphasis on always reminding our members about this fact. We will be even more persistent in the future. Please bear with us.
  2. We need to continuously improve our processes for on-boarding companies. While we cannot – and should not – judge business ideas, we will always be on the look-out for suspicious signs (for the matter of record, there were no such indications in the SellAnApp campaign). We will keep on encouraging our users to flag any suspicious companies or signs.
  3. We will encourage all companies even stronger to take an open approach to information and communication vis-à-vis the shareholders.
  4. We will strive to bring even more trust into the system, which is why we will launch the ”lead investor” feature. A lead investor is an individual or company that takes the lead in an investment round. Implicitly, the lead enables more investors who trust the lead to follow with their money. Typically the lead investor will take a seat on the board and help build and guide the company. In many cases the lead investor also gets a sweetened deal, for instance stock options in return for his or her extra contribution. This is nothing to be upset about. On the contrary, someone who puts his or her name to a deal risks more than just money. A lead investor of the right stuff is a core asset to any company.

We have always told our fund-raising entrepreneurs that they should consider bringing in a lead investor. In a short while, it will be obvious to everybody if a case on FundedByMe has one or not.

To us, this is just one step further in emphasizing the core, trust aspect of business and investment. We continuously strive to empower you with knowledge and networks that will let you to take advantage of all the fine investment opportunities you can find on FundedByMe. That journey will not stop with the measures above. It will never stop.

If you have further questions, concerns or comments regarding the situation around SellAnApp please do not hesitate to contact our CEO Daniel Daboczy, daniel@fundedbyme.com who has been their contact person here at FundedByMe.

Sincerely yours
Johan Jorgensen – Chairman of the board

Crowd Control: How Kickstarter’s Loss Became Sweden’s Gain

Crowd Control: How Kickstarter’s Loss Became Sweden’s Gain

Read a great story on Forbes written by Alison Coleman:

Entrepreneurs are starved of investment alternatives. Investors are starved of investment alternatives.

Crowd investing offers a solution for both, but even the most successful crowd platforms have funding issues of their own, and nowhere more so than in Europe.

Sweden, like other Scandinavian countries, survived the global financial crisis and was attracting investors while the Eurozone teetered on the brink of collapse, yet the funding climate for start ups is as bracing as its winter weather.

Back in 2010 Romanian art curator Daniel Daboczy and Namibian coder Arno Smit, who had both moved to Sweden and had met up when they collaborated on a web project, had a business idea that needed funding.

….

Read the rest of the story here: http://www.forbes.com/sites/alisoncoleman/2014/03/30/crowd-control-how-kickstarters-loss-became-swedens-gain/

First German Live Crowdfunding Event – 12.09.2014

First German Live Crowdfunding Event – 12.09.2014

FundedByMe Germany presents 6 promising Start-Up-Projects as part of the first german live crowdfunding campaign

PROGRAM:

15.00h – 16.30h: 

Our Premium Partners, service providers with huge experience introduce themselves:

http://audalis.de/
http://www.quadriga-communication.de/
http://wearebattalion.com/
http://i-potentials.de/
http://www.lacore.de/

Starting 17:00h:

The founders introduce themselves, their business models and their crowdfundig campaigns. After the official launching of the campaigns they will be running 8 weeks, possible to be watched on a Live Ticker! By campaigns kick-off you will get the opportunity to invest right on the spot with your smartphone.

  • Clicc  is your mini solar charger to go – the perfect solution for travelling.
  • Karmanoia  aims at the rebirth of their Peristal Singum, a labyrinth which shows impressive illusions like for Alice in Wonderland.
  • Dondobbin intents to produce a disposable ashtray to go.
  • Nightfox  is an app for Android and iOS which helps the users to find a proper Party or Club in their surroundings.
  • CapClean Protection for your Headware

Finally:

Buffet-Opening and Networking.

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Attention! Limited Space! To reserve a space kindly register here.

Furthermore it is necessary to register on the FundedByMe Platform to assure that youare ableto do investmensts.

Unfortunately attendance isn’t possible without those registrations.

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We are looking forward to seeing you on that exciting Funding! One day later, on 13th september 2014, there will be the world’s largest Crowdfunding Festival for the first time in Berlin: The One Spark Berlin Festival!