Digital Investing and Lending Ecosystem Jouko Ahvenainen PODIM CONFERENCE – May 14, 2015 Presentation available on http://www.slideshare.net/growvc

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

@growvc ++ MARKETS – ASSETS – CROWD ++

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Finance and Services

Infrastructure Consulting & Professional Services

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

How is the landscape?

•  Some  opinions  have  been  that  there  will  be  one  global  pla3orm  to  dominate  the  market,  like  Facebook,  or  at  least  like  eBay  

•  The  reality:  •  There  is  and  will  be  strong  finance  (local  and  global)  regulaAon  to  this  

market,  starAng  from  KYC/AML  to  required  informaAon  and  traceable  transacAons  

•  There  are  different  kinds  of  investors  from  supporters  with  $100  to  insAtuAonal  investors  with  $100M  

•  There  are  many  types  of  securiAes  and  asset  classes  and  investment  vehicles  and  models  

•  It  is  not  only  the  regulaAon,  but  also  investment  policies,  due  diligence  requirements  and  legal  responsibiliAes  

•  More  and  more  exisAng  finance  insAtuAons  want  to  use  online  models  and  processes  

•  This  is  not  only  about  startups,  this  is  about  all  kinds  of  securiAes  and  assets  

•  It  is  fundamental  to  think  and  build  the  ecosystem,  not  only  try  to  make  one  killer  app  

Think about the digital ad ecosystem

And build a real digital investing and lending ecosystem

Issuers   Investors  

Investor  Side  Pla3orms  or  Dashboards  

Digital  Market  Places  

Issuer  Side  Pla3orms  or  Dashboards  

Data,  Research  &  Services  

Back  Office  Services  

P2P  lending  

Startup  crowdfundin

g  

SME  funding  

Real  Estate  

Crowd  pla3orms  

Family  offices  

InsAtuAonal  Investors  

Automated  Funds  

Equity  offer  

Borrow  request  

Investment  vehicles  

Directory  services  

Source: Grow Advisors market analysis, growadvisors.com

•  The Challenge: •  The world’s largest and deepest market is very fragmented. •  It’s too difficult for investors to find companies, and vice versa. •  3% of Accredited Investors participate. •  New finance regulation (JOBS Act) and other new rules will greatly

increase the size of the world’s largest market.

$905B

Friends & Family Venture Capital

Reg D

$75B $23B

Executive Summary

This is US only, but the phenomenon is global

It is the largest market in the world

•  No  one  can  build  this  ecosystem  alone  and  have  credibility  to  play  all  roles  

•  Extremely  important  to  get  new  digital  pla3orms  to  work  with  exisAng  investors,  financial  insAtuAons  and  professional  services  (e.g.  research,  analysts  and  underwriAng)  

•  Digital  services  can  cut  out  unnecessary  middle-­‐men  (e.g.  those  whose  posiAon  has  been  to  be  a  gatekeeper  to  informaAon,  deals  and  investors),  but  it  sAll  requires  top  level  value  added  services  to  help  all  parAes  and  bring  credibility  to  the  market  

•  The  winners  in  this  market  focus  to  do  their  own  part  very  well  according  to  laws  and  regulaAon  and  partner  with  other  similar  actors  

Grow VC Group is a part of this but important for everyone to partner

Current Digital Investment Ecosystem Actors

Build an open and networked ecosystem

Issuers   Investors  

Investor  Side  Pla3orms  or  Services  

Digital  Market  Places  

Issuer  Side  Pla3orms  or  Services  

Data,  Research  &  Services  

Back  Office  Services  

Source: Grow Advisors market analysis, growadvisors.com

1:  Startup  Commons  Tools  for  startup  ecosystems  to    develop  and  measure  startups  

“Only  things  that  can  be  measured,    can  be  improved.”  

startupcommons.org  

Build / Release Validate / Iterate

Ideation Scalable product or service idea for a big enough target market. Some initial business models for how it would make money. One person or only a vague team; no confirmed commitment or no right balance of skills in the team structure yet.

Concepting Clear and meaningful target with direction for at least 3 years with milestones how to get there, -> 3, 6, 12, 24, 36 months… Team of two or three core founding partners with balanced ownership. Can also already have some extended team with lighter commitment (stock options and or cash compensation)

Commitment Committed and balanced founding team. Able to develop the product or service (Minimum Viable Product) without dependency of uncommitted external resources, or already an initial product or service in place. Existing signed shareholder agreement between founders, with milestones, committed time and money use, for at least 2+ years with vesting.

Validation Can demonstrate some user growth and or revenue (initial traction). Continue to attract additional resources (money or sweat equity) for equity or future revenue. Looking for clear market validation (Product Market Fit), to move into scaling.

Scaling Showing a clear, growing and measurable user and or market traction in a big or rapidly growing target market. Can and wants to scale fast. May have attracted significant funding.

Establishing Achieved great growth, that can expected to continue. No longer needs to struggle to get resources and can acquire those easily. Continues to grow and often wants to culturally continue behaving like a "startup" for as long as possible. Founders exit or continue business as usual.

Minimum Viable Product

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www.startupcommons.org

Vision > Target > Mission Growth

Idea / Team Fit Product / Market Fit Business Model / Market Fit

STARTUP DEVELOPMENT PHASES

●  Business Model Canvas ●  Co-founder Team Building

Scale / Expand

-2 -1 3 0 2 1

-2 -1 3 0 2 1

Startup Commons Back-end infrastructure

Startup Ecosystem Funnel

Applicants Graduates

%

Entry per source

Drop out %

Total #

Total #

Total #

Total #

Total #

Total #

Applicants Graduates

%

Entry per source

Drop out %

Total #

Applicants Graduates

%

Entry per source

Drop out %

Total #

Applicants Graduates

%

Entry per source

Drop out %

Total #

Applicants Graduates

%

Entry per source

Drop out %

Total #

Indentified

Source & paths

Total #

startupcommons.org  

2:  Deal  Index  One  Place  Globally  to  Find  All  InvesAng    Deal  Flow  and  Data  

Data becomes a powerful tool

Source: Deal Index Ltd., dealindex.co

Source: Deal Index Ltd., dealindex.co

Source: Deal Index Ltd., dealindex.co

Source: Deal Index Ltd., dealindex.co

3:  Crowd  Valley  Full  service  pla3orm  and  backoffice  to  start  a  digital  invesAng  or  lending  service  

The  Full  Crowd  Valley  Offering  

2nd  generaAon  pla3orm  with  configurable,  integrated  services  for  domesAc  and  global  transacAons:  

•  TransacAon  documentaAon    •  Investor  educaAon    •  Investor  verificaAon  and  accreditaAon    •  AML  and  OFAC  checks    •  Credit  and  background  checks    •  Global  payment  services    •  Custodian  and  escrow  services    •  Private  company  research  services    •  Broker  dealer  services  

 Each  service  is  an  opportunity  to  increase  revenue  for  Crowd  Valley.  

crowdvalley.com  

•  Multiple payment services providers •  “Know your customer” services •  Due diligence and data room services •  Cap Table/Share registry management

Our  API:  A  Simple  Solu=on  to  Complex  Transac=ons

•  Ongoing company/shareholder communication

•  Private company research •  Transfer documents and e-sign

Deal management with automated backend closing processes

Flexible front-end solutions for customer acquisition

Simple investor and company areas to maximize engagement and encourage investment

Automate the lifecycle of a deal:

23 crowdvalley.com  

•  Fully compatible with the API •  Modern and intuitive features

Sleek  Template  or  Custom  Front-­‐Ends

•  Suitable for all segments: private securities marketplaces, VC, angels, brokers, peer to peer, crowdfunding 24

crowdvalley.com  

Platforms for many assets and investment models

Source: Crowd Valley, Inc., crowdvalley.com

4: Grow Advisors Expert to help and build digital startup and finance ecosystems

growadvisors.com  

Key resources: 1.  Digital finance and startup ecosystem competence globally 2.  Real experience to build new global services from scratch 3.  Pioneers of new online funding and lending models 4.  Experience to work with regulators, decision makers and

legal experts 5.  Competence from technology to regulation and business

growadvisors.com  

Jouko Ahvenainen jouko@growvc.com

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

Grow VC Group

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