Grow VC Group: crowd investing and governance

From startup crowdfunding to finance sector disruption Aalto University April 29, 2014 –Jouko Ahvenainen

Grow VC Group ++ www.growvc.com ++

@growvc ++ MARKETS – ASSETS – CROWD ++

Copyrights © Grow VC Group 2014


Jouko Ahvenainen ++

Corporates: Entrepreneur:

Other Activities:

Transatlantic Economic Council

TOP 100

TOP 15

Finance and Services Infrastructure Consulting & Professional Services

Grow VC Group ++


Hong Kong - London - New York - San Francisco - Sao Paolo

The Grow VC Group is a worldwide pioneer and leader in the crowd investing, peer-to-peer and online investment market.


Market places in our portfolio ++


#1 market place infrastructure ++

Technical platform, services like investor background check, investment escrow accounts, due diligence services, credit check, transaction settlement, investor communications

Finance to a new era ++


WE HAVE A DREAM: more equal opportunities,

where entrepreneurs and private investors unite

to accelerate innovation


Short history ++

•  We were probably the first equity crowdfunding service, launched the startup crowdfunding in 2009

–  The regulatory environment was very complex then, and it was the main reason not to start in the US.

•  We have done a lot of pioneer work in the market and also work finance regulators e.g. in the US, UK, EU and Singapore

•  With new innovations it is always difficult to predict the timing –  We decided that our model is to survive and adapt until the market really takes

off •  Important strategic review in May 2012 à from startup crowdfunding only to Grow VC

Group –  Grow VC Group is more like a holding company that have majority share in some

key ecosystem and infrastructure companies and minority in vertical oriented crowdfunding or p2p market places typically with a partner that has strong competence in the vertical in question

•  Crowdfunding concept has really grown from startups to all kind of securities and assets

•  Also institutional investors are coming more interested, i.e. diversify their portfolio through automated co-investing and co-lending platforms, and e.g. avoid the costs of funds.


Internet has been a distribution channel ++


Disruption now – global virtual market places++


Go back to the idea of stock market ++


Create a new effective finance retail market ++

Crowd investing

Market Place

P2P Lending

Companies / Assets Market Places Investors / resources


Three big things for finance ++

1.  Crowdfunding and similar market places enable effective investment and lending models for all kind of investors, companies and assets

2.  Market places enable new co-investment and lending models, i.e. get many kind of investors and investment models to work together

3.  ‘Platforms’ can also ‘automate’ a fund, i.e. investors don’t always have to pay for fund management fees, when a platform with investment criteria and co-investing models can do the same (a kind of index fund)


New regulation is coming ++

Title I (Crea'on of EGCs; “IPO on ramp”) Largely effec've on enforcement.

Title II (Amendments to General Solicita'on/Adver'sing)

Effec've since September 2013.

Title III (Crowdfunding, i.e. investments from non-‐accredited investors)

The SEC collected comments by January 2014, now SEC processes the comments, expected to be effec've in 6 to 9.

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

Not yet effec've, date unclear.

Title V (Increased thresholds for registra'on with SEC)

Largely effec've on enforcement.

Title VI (Increased thresholds for registra'on with SEC for banks)

Largely effec've on enforcement.

Read more: http://www.crowdvalley.com/1/post/2013/10/jobs-act-where-are-we-now.html


Opportunity for traditional finance companies too ++

1. Funding round or loan application

• A company opens a funding round or apply a loan

2. Crowd investing or p2p lending

• Crowd, i.e. ordinary people, can offer an investment or loan, and if enough money available, the company gets money

3. Co-investment or

co-lending

• A bank or investment company can join to a deal, i.e. make co-investment or participate the loan

§  http://www.growvc.com/blog/"§  http://www.crowdvalley.com/news.html "§  http://www.startupcrowdfunding.com/blog.html"§  http://www.growadvisors.com/news.html"§  http://www.startupcommons.org/blog.html"

More about new finance models ++

Group Governance and Management ++


§  Majority and minority shares"- Over 50% - clear control; under 50% - board and strategic decisions"

§  Grow VC Group Management"- Strategic targets and decisions, e.g. new businesses"- Monthly entity review: sales, revenue, costs, strategic targets, issues"

§  Each entity has its own management "- Group representative in the board (Chairman position in the key companies)"

§  Some decisions require Group and entities to make a decision together"- For example, at the moment we discuss a case to offer the p2p platform,

business and investment instrument planning and Group investment in one new p2p lending service in Asia"

Grow VC Group Governance ++

§  Very entrepreneur type people – many team members have had their own companies"

§  Very de-centralized organization"- Key locations London, New York, San Francisco, and Hong Kong"- Some resources in Helsinki"- Team members in e.g. Germany, Italy, Brazil, Zimbabwe, India"- Software development also e.g. in Vietnam, Ukraine, Pakistan, Thailand"

§  Online project management tools"§  Regular calls"§  Very self-driven people"

Management ++

New Strategies – in business and military •  Guerilla and terrorist organizations are fighting with small and self-organized cells, rapid

attacks to a strategic target, and leave the enemy to wonder, how and where to respond •  How someone can build an IED for a few hundred dollars and use it to destroy millions

of dollars military vehicles and fighters who have got top training and equipment •  Generally they mean that resources are not used to any other goal than the creation of

value for the end customer •  A lean startup gets a product beta version to the market as soon as possible, and then

based on the feedback and results develop it further •  Big organizations often like to build expensive systems and always expand •  Often you actually need more competent people and versatile technology and tools

Then they can better adapted to different kind of situations and needs, and they can also surprise the competitor (or enemy)

•  http://www.suomensotilas.fi/en/artikkelit/only-end-result-matters

Some visions ++

§  We cannot have one optimal model for all people"§  Many people respect independent and self-driven roles, but they

are not easy"§  Crowdsourcing and crowdfunding also have influence on

organizations à old centralized sourcing and funding structures are not the only way to operate"

§  Agile organization, operations and teams"§  Global organizations, capability to work in different cultures,

versatile competence and flexible attitude"§  You must be genuinely in main market and respect their culture

and how the market work"- No old-fashion export attitude, no teaching, and no arrogance"

Jouko Ahvenainen [email protected]

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

Grow VC Group ++

www.growvc.com ++ @growvc ++

Slideshare: Grow VC

MARKETS ASSETS CROWD

Grow VC Group: crowd investing and governance

Education

Transcript of Grow VC Group: crowd investing and governance