Crowd-Investing: Your first IPO
With LinkedIn, Groupon, and other tech companies in the news for going public, you can now pay attention to their IPO process and see the similarities to your crowdfunding strategy on Venture Bonsai. The motivations for IPO’s and crowdfunding are the same, and both involve drumming up demand, picking a price, and issuing securities to a large number of investors. Once your company makes it to an IPO (of course, if you decide to turn down all the acquisition offers) you will feel confident and in control, because hey, you’ve done this before.
The American IPO Process
1. Initiation
The IPO process is initiated by appointing roles to outside entities whose job it is to make the process run smoothly. Here, the company will decide on its underwriter and registrars.
2. Pre-Issue activities
The company now prepares its forms and documents. One such document is called the Prospectus, which is a part of the Due Diligence process, and contains all the facts an investor needs to make an educated investment. This document also fills a marketing role because the SEC limits the company’s marketing activities while it’s in the IPO process.
3. Filing the documents
The company then files its… Continue reading
Elevator Pitch Videos!
As part of the Venture Bonsai concept, we shot the first five elevator pitches today in Helsinki.
The idea is to make two videos for start-ups looking for funding: one public 100 second video and another five minute private video which can be shown to potential investors.
To our knowledge, this is the first time elevator pitches were really produced professionally.
Same questions were asked from each entrepreneur and if the answer filmed did not go well enough it was shot again. All the aspects of each answer were fine-tuned towards the highest quality of the message.
The filming itself was done by a professional as well as the editing.
Looking forward seeing really cool videos next week!
Crowdfunding Made Easy: Venture Bonsai Is Coming
Last Friday we released some information on our crowdfunding project, now officially named as Venture Bonsai.
Venture Bonsai is a tool for companies (start-ups and others alike) enabling them run a crowdfunding-style financing round successfully.
I’ve covered some of the challenges of the crowdfunding model in my recent blog articles (Part 1 and Part 2). Venture Bonsai is ready to solve some of those, if not all, challenges.
The key benefits of using Venture Bonsai are:
- Demystification of the crowdfunding process, and a funding process in general
- Tools and processes to follow the financial regulations
- Tools for acquiring or creating the key documents such as Business Plan, Shareholders’ Agreement and Term Sheet
- Offers a platform for Vendor Due Diligence (DD), including DD done by certified partners
- Includes tools for company valuation
- Includes a “Show Room” for your marketing material
- Includes your “Elevator Pitch Video”
- Includes communication tools required during and after the financing round
- Tools for escrow account and signature mechanisms
We already have the first companies lined up to use this tool in the piloting phase. Venture Bonsai is also utilizing this model for its own funding process. Please contact us if you’d like to use the upcoming pilot… Continue reading
Practical Challenges of Crowdfunding (Part 2)
Last week week we discussed the first five items of the following list, this week we cover rest of them.
- How do I find potential investors?
- Which regulations apply and what can I actually do?
- How do I get the investors’ attention?
- How to deal with all the required documents?
- How can I negotiate all the terms with so many investors?
- What about company valuation?
- What is Due Diligence and why do I need it?
- How on earth do I get all the papers signed by a large number (say, 90) of investors all over Europe?
- How can I securely communicate with all those potential investors without answering the same questions over and over again?
- How to take advantage of a large number of investors, after I got them?
6. What About Company Valuation?
Company valuation is always a tough call. There is no real truth available for this, but typically (we entrepreneurs) over-estimate the value and the potential investors under-value the company as they want to “get a good deal”. So what would be fair price for a share issue?
The easiest way to set the price is just decide a value that you think would be acceptable for… Continue reading
Practical Challenges of Crowdfunding (Part 1)
Crowdfunding is gaining some momentum as a potential investment vehicle for startups. As the traditional Angel Investors and Venture Capitalists have become more careful on the early stage investments and number of investments has dropped dramatically, there is a need for new methods.
But how do you actually run a crowdfunding investment round? There are no tools currently available for this so it may seem like a lot of work. And it is. This means it’s just another challenge to be solved.
The issues you have to consider and solve when running a crowdfunding round (or any investment round):
- How do I find potential investors?
- Which regulations apply and what can I actually do?
- How do I get the investors’ attention?
- How to deal with all the required documents?
- How can I negotiate terms with so many investors?
- What about company valuation?
- What is Due Diligence and why do I need it?
- How on earth do I get all the papers signed by a large number (say, 90) of investors all over Europe?
- How can I securely communicate with all those potential investors without answering the same questions over and over again?
- How to take advantage of a large number… Continue reading