In Crowdfunding, The First $100K Is Always The Most Difficult
We’re happy to announce that AppGyver Inc. has successfully closed its first crowdfunding investment round, totaling 100,000 USD. As all the investors were from Europe, the burden related to SEC regulation did not cause any trouble.
As far as we’re aware, this is also world’s first real crowd investing round! This is also a great milestone for Venture Bonsai as it has now been proven that the whole end-to-end process works well.
Lessons Learned
As this was the first of its kind, we learned a few things in the process that companies like AppGyver should pay more attention to.
Lesson #1: Get Your Papers Ready!
The first point regards preparing the paperwork. The round was started on February 9th but some of the must-have documents, such as the Shareholders’ Agreement, weren’t actually ready until late April. As one of the requirements for the investors is to sign (electronically) the Deed of Adherence to the Shareholders’ Agreement, nobody could really invest until that was completed. AppGyver also used its own set of documents (which is perfectly fine of course) but one must also keep in mind that Venture Bonsai offers, free of charge high-quality documents for companies to use. Even if… Continue reading
The Crowd Effect
Stop for a second and imagine what you could do if everybody (yes, everybody) was helping you. Unlimited possibilities! Anything could be done! However, in order for that to happen it might be required of you to be in the business of saving the earth (but maybe you are?).
For rest of us, we could still get a lot done with a little help from a few other people. Maybe you are in the business of selling something many can understand. And if all of those people end up investing little bit of money in your company, they all got an owners’ incentive to help you.
Let’s call this The Crowd Effect.
Let’s take an example.
Say you have a new start-up producing custom-made shoes based on individual measurements. If you run a crowdfunding financing round and get 200 individuals all over Europe investing in your company, you just got 200 new marketing agents.
In the old world, you were supposed to get this 1 M€ from one or two Venture Capitalists who said “they have connections” and therefore are “value-adding”. Ever heard these things before? Probably yes. So what happens after that? Afterwards you may find out they don’t really… Continue reading