Grow VC in Transatlantic Economic Council 2012 12-03

Grow VC Group ++ www.growvcgroup.com ++

@growvcgroup ++

Transatlantic SME Finance White House Conference Center, Washington DC December 3, 2012 / Jouko Ahvenainen

Copyrights © Grow VC Group 2012

Develop SME Finance ++


§  The Purpose: The JOBS Act is intended to encourage a wide range of companies to raise capital

§  The JOBS Act includes provisions that: 1.  Increase the number of shareholders a company with assets in excess of $10 million

may have before being required to register with the SEC from 500 shareholders of record to 500 “unaccredited" shareholders or 2,000 total shareholders.

2.  Create a new exempLon whereby a company may raise up to $1 million during any 12 month period by selling securiLes through “crowdfunding,” (i.e. raising a small amount of money from a large number of unaccredited investors via a website (or a “funding portal”)).

3.  Create a new category of issuer called an “emerging growth company” with reduced disclosure requirements and greater regulatory flexibility for a 5 year period aRer an IPO/registraLon.

4.  LiR the current ban on “general solicitaLon” and “general adverLsing” in specific kinds of private placements.

5.  Raise the limit for securiLes offerings exempted under RegulaLon A from $5 million to $50 million.

Summary of the JOBS Act ++


Effec/ve Dates of the JOBS Act Title I (CreaLon of EGCs; “IPO on ramp”) Largely effecLve on enforcement

Title II (Amendments to General SolicitaLon/AdverLsing)

The SEC had been schedule to propose new rules by 4 July but did not do so unLl 29 August. Final rules not likely before end of 1st quarter 2013.

Title III (Crowdfunding) The SEC is required to adopt new rules by 31 December but most expect these changes to be implement in mid/late 2013

Title IV (Increasing Reg A offerings to up to $50 million)

Not yet effecLve, date unclear.

Title V (Increased thresholds for registraLon with SEC)

Largely effecLve on enforcement.

Title VI (Increased thresholds for registraLon with SEC for banks)

Largely effecLve on enforcement.


Funding type Problem Solution candidate Non High Growth Companies

Bank or credit card lending doesn’t work properly

Peer-to-peer lending models and instruments

Seed How to build the first product Angels, crowdfunding, new p2p lending models

Series A VC’s pick only a few companies Other funding models like lending and crowdfunding for non-VC cases

Series B to C No many investors in this area New market place models: crowd-based funds, syndicate market places and instruments

Exit of investors before Exit

The market is not liquid, i.e. very long-term investments, decrease investment willingness

Market places for different phases

IPO Big step Easier transition thru different market places

New Solutions Are Needed ++


For example, Grow VC Group, activities: ü  Crowdfunding Regulatory Intermediary Association (CFIRA) ü  Crowdfunding Professional Association (CFPA) ü  National Crowdfunding Association (NLCFA) ü  Cooperation governmental investors, e.g. Singapore Investment

Company, ü  European Crowdfunding Network (ECN) ü  US Delegation in Transatlantic Economic Forum ü  Cooperation with Securities and Exchange Commission (SEC)

and Financial Industry Regulatory Authority (FINRA)

Conclusion ü  Important to find common solutions and guidelines in order to

get the market work better and make it easier for investors and companies

Regulation ++

6 Copyrights © Grow VC Group 2012

•  Crowdfunding brings more money to SME, but also creates more effective and democratic funding markets from seed phase to IPO •  US JOBS Act is not only early phase (<$1M) seed funding regulation, but

allows market private investments generally and make IPO easier

•  Already now first market places for later phases and other asset class too

•  Open transparent market places offer more opportunities to entrepreneurs, but also make them immediately more market oriented

•  Crowdfunding is not only an isolated model, there are already now models how it works with angels and VC’s, and how e.g. VC’s can also utilize it to leverage their own investments and also raise capital to funds

•  Any market place need critical mass, similar regulation and policies help the market to work better

•  The market will be a combination of different phases, industries (e.g. IT or life science) and geographical areas market places that can also work together

Conclusions ++

7 Copyrights © Grow VC Group 2012

About Grow VC Group ++


Over 17,500 investors Over 4,500 startups

10% monthly growth

Almost $35 Million investment money

Users from 200 countries

The most global market place for equity

Over 400 3rd party crowdfunding network on the platform

Dozens of investments, millions of money


Finance and Services Portfolio

Samples:

Infrastucture

Grow VC Group ++


Turn key solution to start crowdfunding for any assets, equity or lending, www.crowdvalley.com

Consulting and investment bank services for crowdfunding ecosystem, www.growadvisors.com

Crowdfunding co-investment fund, works with many crowdfunding services, www.mutualseedfund.com

The leading global market place to invest money or work into early phase startups, www.growvc.com

UX & development services to create web and mobile applications that convey experiences www.changelab23.com

Services and Solutions for all Crowdfunding Ecosystem Needs ++


Jouko Ahvenainen [email protected]

+44 7889 833 165 (UK) +1 646 363 6664 (US)

Grow VC Group ++

www.growvcgroup.com ++ @growvcgroup ++

Grow VC in Transatlantic Economic Council 2012 12-03

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Transcript of Grow VC in Transatlantic Economic Council 2012 12-03