Ten Things You Need to Know Before Engaging in Accredited Crowdfunding
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CEP Discussion Paper No 1498 September 2017 Equity
ISSN 2042-2695 CEP Discussion Paper No 1498 September 2017 Equity Crowdfunding and Early Stage Entrepreneurial Finance: Damaging or Disruptive? Saul Estrin Daniel Gozman Susanna Khavul Abstract Equity crowdfunding (ECF) offers founders of new ventures an online social media marketplace where they can access a large number of investors who, in exchange for an ownership stake, provide finance for business opportunities that they find attractive. In this paper, we first quantify the evolution of the ECF market in the UK, the world leader, as well as the benign regulatory environment. ECF already represents more than 15% of British early stage entrepreneurial finance. We then use qualitative methods to explore three research questions. First, do these large financial flows via ECF platforms supplement or merely divert more traditional forms of funding for entrepreneurs? Second, do investors understand and appropriately evaluate the risks that they are bearing by investing in this new asset class? Finally, does ECF finance bring with it the spillovers, e.g. advice and guidance critical to entrepreneurial success, associated with other sources of funding such as Venture Capital? Our study is based on extensive interviews with investors, entrepreneurs (including some who chose not to use ECF in favour of traditional funding sources) and regulators. We conclude that ECF provides real additionality to the sources of entrepreneurial finance while not bringing major new risks for investors. This suggests other jurisdictions might consider implementing the British “principles based” regulatory framework. Keywords: equity crowdfunding, early stage entrepreneurial finance, financial regulation, investor choices JEL: G3; G21; L26; M21 This paper was produced as part of the Centre’s Growth Programme. -
Annual Report
Building Long-term Wealth by Investing in Private Companies Annual Report and Accounts 12 Months to 31 January 2021 Our Purpose HarbourVest Global Private Equity (“HVPE” or the “Company”) exists to provide easy access to a diversified global portfolio of high-quality private companies by investing in HarbourVest-managed funds, through which we help support innovation and growth in a responsible manner, creating value for all our stakeholders. Investment Objective The Company’s investment objective is to generate superior shareholder returns through long-term capital appreciation by investing primarily in a diversified portfolio of private markets investments. Our Purpose in Detail Focus and Approach Investment Manager Investment into private companies requires Our Investment Manager, HarbourVest Partners,1 experience, skill, and expertise. Our focus is on is an experienced and trusted global private building a comprehensive global portfolio of the markets asset manager. HVPE, through its highest-quality investments, in a proactive yet investments in HarbourVest funds, helps to measured way, with the strength of our balance support innovation and growth in the global sheet underpinning everything we do. economy whilst seeking to promote improvement in environmental, social, Our multi-layered investment approach creates and governance (“ESG”) standards. diversification, helping to spread risk, and is fundamental to our aim of creating a portfolio that no individual investor can replicate. The Result Company Overview We connect the everyday investor with a broad HarbourVest Global Private Equity is a Guernsey base of private markets experts. The result is incorporated, London listed, FTSE 250 Investment a distinct single access point to HarbourVest Company with assets of $2.9 billion and a market Partners, and a prudently managed global private capitalisation of £1.5 billion as at 31 January 2021 companies portfolio designed to navigate (tickers: HVPE (£)/HVPD ($)). -
The Economics of Crowdfunding : Entrepreneurs’ and Platforms’ Strategies Jordana Viotto Da Cruz
The Economics of Crowdfunding : Entrepreneurs’ and Platforms’ Strategies Jordana Viotto da Cruz To cite this version: Jordana Viotto da Cruz. The Economics of Crowdfunding : Entrepreneurs’ and Platforms’ Strategies. Sociology. Université Sorbonne Paris Cité, 2017. English. NNT : 2017USPCD030. tel-01899518 HAL Id: tel-01899518 https://tel.archives-ouvertes.fr/tel-01899518 Submitted on 19 Oct 2018 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. |_|_|_|_|_|_|_|_|_|_| UNIVERSITE PARIS 13 U.F.R. DE SCIENCES ÉCONOMIQUES ÉCOLE DOCTORALE : ERASME NO 493 THÈSE Pour obtention du grade de Docteur de l’Université Paris 13 Discipline : Sciences Économiques Présentée et soutenue publiquement par Jordana VIOTTO DA CRUZ Le 13 novembre 2017 « The Economics of Crowdfunding: Entrepreneurs’ and Platforms’ Strategies » Directeurs de thèse Marc BOURREAU, Télécom ParisTech François MOREAU, Université Paris 13 Jury Thierry PÉNARD, Professeur, Université Rennes 1 Président Paul BELLEFLAMME, Professeur, Aix-Marseille Université Rapporteur Jörg CLAUSSEN, Professeur, Ludwig-Maximilians-Universität München Rapporteur Françoise BENHAMOU, Professeur, Université Paris 13 Examinateur Marc BOURREAU, Professeur, Télécom ParisTech Directeur de thèse François MOREAU, Professeur, Université Paris 13 Directeur de thèse UNIVERSITÉ PARIS 13 U.F.R. -
The Role of Crowdfunding in Reducing the Equity Gap in Poland
RUCH PRAWNICZY, EKONOMICZNY I SOCJOLOGICZNY Rok LXXXI – zeszyt 3 – 2019 MICHAŁ ŁUKOWSKI, PIOTR ZYGMANOWSKI THE ROLE OF CROWDFUNDING IN REDUCING THE EQUITY GAP IN POLAND I. INTRODUCTION Technology changes the way financial intermediaries act. It is notice- able especially in Western European countries, both in the banking sector (for example Revolut or N26) and the capital market sector, where the use of equity crowdfunding platforms (for example Seeders and Crowdcube) by early stage companies for capital raising is becoming increasingly popular. These platforms are connecting entrepreneurs (issuers) and investors, acting as intermediaries in the conclusion of transactions on financial instruments. The importance of equity crowdfunding can be demonstrated by the value of transactions carried out with the use of such platforms, which in 2017 reached GBP333 million in the UK, and EUR211 million in the countries of continen- tal Europe. The growing importance of equity crowdfunding has made it the subject of many studies, such as those carried out by Agrwal, Catalini and Goldfarb,1 or Ashlers, Cumming, Guenther and Schweizer.2 This technological revolution has also reached the Polish capital market with the recent regu- lation from 21 April 2018, which allows public offerings up to EUR1 million to be carried out without a prospectus or memorandum. This enables public offerings organized by equity crowdfunding platforms. Taking the above into consideration, we decided to analyse the development of equity crowdfunding in Poland due to its growing popularity and the changes to Polish law. The main purpose of the article is to characterize equity crowdfunding in Poland and place it among other sources of equity capital. -
Their Billion-Dollar Tax Loophole
APRIL 18, 2018 HEDGE PAPERS No. 56 CALIFORNIA HEDGE FUNDS & Their Billion-Dollar Tax Loophole Simply stated, the carried interest loophole is the mistreatment of hedge fund and private equity fees as capital gains, rather than ordinary income. CONTENTS 3 | Introduction: the Carried Interest Loophole 7 | What is the Carried Interest Loophole? 10 | The Fight to Hold California Billionaires Accountable 11 | Meet The Billionaires – Oaktree Capital – TPG Capital – Ares Capital Management – Leonard Green & Partners – Altamont Capital Partners – Vista Equity Partners 24 | Key Findings 27 | Private Equity, Discrimination & Pay Equity 29 | Carried Interest Bills By State 29 | Summary of Key California Bills Outlined in this Report 32 | Methodology 35 | Who Are the Hedge Clippers? 36 | Press + General Inquiry Contacts INTRODUCTION: THE CARRIED INTEREST LOOPHOLE Understanding what the Instead, with last year’s new federal tax law, Trump and Republicans chose to increase the trillions of Carried Interest Loophole dollars going to billionaires and corporations while is and why Trump and threatening vital investments in housing, education 2 Congressional Republicans and healthcare. During his presidential campaign, President Donald kept it alive in the Federal Trump pledged to close the loophole, saying that “the Tax Law. hedge fund guys are getting away with murder...I have hedge fund guys that are making a lot of money The carried interest loophole is that aren’t paying anything.” among the most costly and wasteful Now, of course, many of those “hedge fund guys” are tax loopholes out there. in the Trump administration or otherwise advising or funding Trump. It’s a massive giveaway to hedge fund and private equity firms that costs federal taxpayers $18 billion each year. -
Crowdfunding, Crowdsourcing and Digital Fundraising
Fundraising for Archives Crowdsourcing, Crowdfunding and Online Fundraising Crowdfunding, Crowdsourcing & Digital Fundraising Aim of Today This session will help to demystify the landscape surrounding crowdsourcing, crowdfunding, and online fundraising providing you with information and tools essential when considering these different platforms. Plan for today • Understand the digital fundraising techniques • Evaluate what components are required for an online campaign to be successful • What does a good online case for support look like • Reflect on examples of good practice • Build a crowdfunder plan 4 5 Apples…….oranges……or pears? Digital isn’t complicated – change is! 7 DO YOU HAVE THE RIGHT TOOLS FOR THE JOB TO NAVIGATE THE MAZE 8 Your Crowd… • Internal Stakeholders • External Stakeholders Databases: Which one do you choose? Microsoft Dynamics 10 Who’s Online ONS 2015 ONLINE DONATION METHOD Blackbaud 2014 12 DO YOU HAVE THE RIGHT TOOLS FOR THE JOB TO NAVIGATE THE MAZE • Email • Website / online platform • Social Media • CRM System / Database • Any others…… You need to be able to engage with your online audience on multiple platforms! 13 Email "Correo." by Itzel402 - Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons - 14 https://commons.wikimedia.org/wiki/File:Correo..jpg#/media/File:Correo..jpg http://uk.pcmag.com/e-mail-products/3708/guide/the-best-email-marketing-services-of-2015 15 Social Media 16 Social Media Channel Quick Guide •Facebook - Needs little explanation. Growing a little older in terms of demographics. Visual and video content working well. Tends to get higher engagement than Twitter. •Twitter - The other main channel. Especially useful for networking and news distribution. -
Innovative Financing of Creative Projects on the Kickstarter Platform: Ukrainian and Polish Experience
E3S Web of Conferences 166, 13019 (2020) https://doi.org/10.1051/e3sconf/202016613019 ICSF 2020 Innovative financing of creative projects on the Kickstarter platform: Ukrainian and Polish experience Iuliia Gernego1,*, Liudmyla Petrenko2, Mykhailo Dyba1, and Vitalii Tsarov2 1Kyiv National Economic University named after Vadym Hetman, Corporate Finance and Controlling Department, 54/1 Peremohy Ave., Kyiv, 03057, Ukraine 2Kyiv National Economic University named after Vadym Hetman, Business Economics and Entrepreneurship Department, 54/1 Peremohy Ave., Kyiv, 03057, Ukraine Abstract. In the era of digital economy, the crowdfunding platforms provide the background to mitigate cross-country differences within project financing. In particular, creative projects are important as a vital driver in maintaining business and social sector competitive. Thereby, research problem lays upon the potential of providing crowdfunding support to overcome the creative project divide in different countries. The paper aims to provide scientific support on creative projects innovative financing in Ukraine and Poland within Kickstarter. The research methodology is based on Kickstarter data (10 years; 83 industries and 898 projects) processed by statistical analysis. The Concentration Ratio (CR) was modified to measure the concentration of efforts, considering the largest creative industries within Kickstarter platform. The results section represents high rates of concentration of efforts for Ukrainian creative projects that commercialize tangible physical goods: Product Design and Gadgets. At the same time, in Poland the main concentration of efforts is in the field of intangible intellectual products: Tabletop Games and Video Games. Thus, digital platform is a reflection of interrelations between intangible and tangible values in economies. The study results can be used within national programs of creative innovative projects financial support. -
Israel's Ourcrowd Takes Lead in Equity Crowdfunding
Embargo until 6AM PST May 22, 2013 Israel’s OurCrowd takes lead in equity crowdfunding Has raised more funds than any other platform worldwide Latest round for Jeff Pulver's Zula breaks $12M in funding for companies Jerusalem, Israel May 22, 2013: Israel's hybrid VCcrowdfunding platform OurCrowd announced today that it closed financing for Jeff Pulver's latest startup, Zula, pushing its total raised for early stage companies above $12 million. This $12 million is in addition to the $5.5 million in funding OurCrowd raised for its own platform in February this year. Zula is OurCrowd's 18th completed funding round. OurCrowd CEO Jon Medved says "Passing this funding milestone makes OurCrowd this year’s fastestgrowing vehicle for angels and accredited investors to find and back early stage companies online. From our roots in Israel we have actually taken the global lead in funds raised." Zula cofounder Jeff Pulver said, "I am excited about the value that OurCrowd brings to early stage investors who invest in startup companies. Not only did we raise our seed round online in less than a week, but we had people from all over the world invest in Zula thanks to this platform." Zula provides an innovative cloudbased mobile collaboration platform for teams. It is lead by Jacob NerDavid, who cofounded DeltaThree, and Pulver, who is a wellknown early investor in Twitter and FourSquare. "While initially focusing on the Israeli early stage ecosystem, OurCrowd has now brought together investors and companies from around the world," explained Medved. -
Equity Crowdfunding: a Market for Lemons? Darian M
College of William & Mary Law School William & Mary Law School Scholarship Repository Faculty Publications Faculty and Deans 2015 Equity Crowdfunding: A Market for Lemons? Darian M. Ibrahim William & Mary Law School, [email protected] Repository Citation Ibrahim, Darian M., "Equity Crowdfunding: A Market for Lemons?" (2015). Faculty Publications. 1792. https://scholarship.law.wm.edu/facpubs/1792 Copyright c 2015 by the authors. This article is brought to you by the William & Mary Law School Scholarship Repository. https://scholarship.law.wm.edu/facpubs IBRAHIM_4fmt 1/3/2016 1:00 PM Article Equity Crowdfunding: A Market for Lemons? Darian M. Ibrahim† INTRODUCTION Everything is online now—the way we connect with others, the way we shop, even some forms of education. We keep up with friends on Facebook we cannot see in person, buy light bulbs from Amazon rather than making a trip to the hardware store,1 and obtain an MBA at night on our computers from the comfort of our own home after the kids have gone to bed.2 One area that has initially resisted the move to cyberspace, howev- er—eschewing the virtual world for the real one—is entrepre- neurial finance. Venture capitalists (VCs) and angel investors have long valued close networks and personal relationships when select- ing which entrepreneurs to fund, and they closely monitor their investments in person after they fund.3 These practices lead to intense locality in funding—i.e., investors funding entrepre- † Professor of Law, William & Mary Law School. My thanks to Brian Broughman, Joan Heminway, Don Langevoort, Alan Meese, Nate Oman, Ja- son Parsont, Gordon Smith, participants in a faculty workshop at Washington & Lee for helpful feedback on this Article. -
TIPS for STARTUPS – UNDERSTANDING the STAGES of EQUITY FINANCING Posted on July 11, 2016
TIPS FOR STARTUPS – UNDERSTANDING THE STAGES OF EQUITY FINANCING Posted on July 11, 2016 Categories: Insights, Publications In the earliest stages of a new venture, founders will often seek to bootstrap (i.e., self-finance) operations in order to build value through their own sweat equity. Once bootstrapping is no longer enough to sustain their pre-revenue startup, or the need for financing to grow the business outstrips modest initial revenues or friends and family contributions, it becomes essential for these founders to begin looking for external sources of financing. If conventional bank loans and lines of credit are not desirable or sufficient, then they may consider seeking private investment. For founders unfamiliar with fundraising, it can be very daunting when terms like "angel investing", "venture capital", "series B financing", and "seed round" are being thrown around. Understanding the terminology surrounding the financing process is essential for startup leaders hoping to secure financing, or for individuals in the business world hoping to understand the startup landscape. What is equity financing? Who participates? When many people hear terms like "venture capital", they think of television programs like Dragons' Den, in which business founders pitch their ideas to a group of wealthy and successful business personalities. Much like in Dragons' Den, the process of early-stage financing involves investors providing funds to startup companies that have potential for long-term growth. Early-stage equity financing is a great option for startups that are not in a position to seek funding through public capital markets, and wish to avoid being loaded with debt. -
Equity Crowdfunding & Peer-To-Peer Lending
LEGALINK I EQUITY CROWDFUNDING AND PEER TO PEER LENDING EQUITY CROWDFUNDING & PEER-TO-PEER LENDING 2019 1ST EDITION 1 LEGALINK I EQUITY CROWDFUNDING AND PEER TO PEER LENDING INTRODUCTION Crowdfunding has already an established and proven recognition worldwide as a powerful alternative financing tool. Three main points should be signaled in this respect. On the one hand, the volume of the crowdfunding market keeps increasing sharply at global level. On the other hand, the crowdfunding market is very dynamic as new crowdfunding platforms have recently started to operate. Finally, the projects to be financed through crowdfunding platforms are more and more diverse. In this context, at a time when crowdfunding regulation is subject to discussion around the globe (namely in the context of the Proposal for a EU Crowdfunding Regulation), is seems important to assess the legal responses from various relevant jurisdictions, in respect to Equity Crowdfunding and Peer to Peer Lending. Such is the purpose of this publication. This book is dedicated to the memory of Georg Van Daal, Former Deputy Head of Legalink FinTech Forum. Georg was a brilliant lawyer and a partner at Ekelmans & Meijer from 2014 to 2018. He was key to the structuring and to the development of this project but unfortunately could not live to see its final form. He is dearly missed. October 2019 Paulo Câmara Managing Partner of Sérvulo & Associados Leader of the Legalink FinTech Forum 2 LEGALINK I EQUITY CROWDFUNDING AND PEER TO PEER LENDING INDEX ARGENTINA ..........................................................................................................................................................................................................................................................................................................................................04 -
Alternative Investments 2020: the Future of Capital for Entrepreneurs and Smes Contents Executive Summary
Alternative Investments 2020 The Future of Capital for Entrepreneurs and SMEs February 2016 World Economic Forum 2015 – All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system. B Alternative Investments 2020: The Future of Capital for Entrepreneurs and SMEs Contents Executive summary 1 Executive summary Over the past decade, the external environment for alternative investments has seen 2 1. Introduction enormous changes. The areas affected the most are start-up capital and venture 3 1.1. Background funding for entrepreneurs, crowdfunding and marketplace lending for small businesses, 3 1.2. Scope and private debt for mid-market enterprises. 6 2. The shake-up of traditional start-up capital 6 2.1. Overview In all three cases, a set of interlocking factors is driving the emergence of new 8 2.2. What you need to know capital sources: 11 2.3. What to look out for 11 2.4. Take-away Regulation: where regulation constrains a capital flow for which there 1. is demand, a new source of capital will emerge to fulfil that demand; 12 3. The rise of crowdfunding 12 3.1. Overview 14 3.2. What you need to know Changes in demand for capital: where capital destinations develop 16 3.3. What to look out for 2. demand for new forms of funding, investors will innovate to meet it; 17 3.4. Take-away Technology: where technology enables new types of origination, 18 4. Mid-market capital 18 4.1.