The First $100K Is Always The Most Difficult
We’re happy to announce that AppGyver Inc. has successfully closed its first crowdfunding investment round, totaling 100,000 USD. As all the investors were from Europe, the burden related to the SEC regulation did not cause any trouble.
As far as we’re aware, this is also world’s first real crowd investing round! This is also a great milestone for Venture Bonsai as it has now been proven that the whole end-to-end process works well.
Lessons Learned
As this was the first of its kind, we learned a few things (in the process) that companies like AppGyver should pay more attention to.
Lesson #1: Get the Papers Ready!
The first thing regards preparing the paperwork. The round was started on February 9th but some of the must-have documents, such as the Shareholders’ Agreement, weren’t actually ready until late April. As one of the requirements for the investors is to sign (electronically)… Continue reading
Press Release: New Crowd Investing Service Venture Bonsai Launched
NEW CROWD INVESTING SERVICE VENTURE BONSAI LAUNCHED
Venture Bonsai is a new tool for startups running Crowd Investing investment rounds. This means raising money from many parties in small chunks instead of a few larger investments. Venture Bonsai enables versatile pre-investment communication between the investor prospects and the entrepreneurs, combined with social media mechanisms. Venture Bonsai is first of its kind in offering a complete tool set for all parties to manage the whole investment process.
Supporting growth companies is largely seen as important for Europe and its future. However political intentions alone do not help, it is positive action that’s required. That is the idea behind Venture Bonsai, founded by experienced serial entrepreneurs with the courage to implement real and useful tools using private funds.
“Venture Bonsai is the first startup funding tool accessible by any private investor. It allows anybody to become an angel investor with investments just… Continue reading
Introducing Equity Crowdfunding
Venture Bonsai is now open! It still requires an invitation, but it’s easy to get one. Just make sure you include your LinkedIn profile link and briefly explain whether you’re an entrepreneur with a start-up looking for funding next year or an investor, willing to invest 5000 euros to one or more companies. Brief introduction is here.
This first release of Venture Bonsai already enables two very important things:
- It has an end-to-end process (following the financing regulation) for an entrepreneur run a funding round
- It has an end-to-end process for the private investors invest money in the companies
Crowdfunding for entrepreneurs
You can learn more about how to prepare for a funding round (as an entrepreneur). The whole process (preparing and running the round) has been implemented from a view point of an entrepreneur (as we are entrepreneurs ourselves and know what we’re talking about). One of the… Continue reading
The Statue of Liberty was Crowdfunded
So you knew crowdfunding is not actually a new idea. It was, after all, used already for years in the music and movie industry.
But did you know that it dates way beyond that. Even The Statue of Liberty in New York was in a way “crowdfunded”. The statue was a gift to the United States from the people of France. They agreed that the French finance the statue and the Americans provide the pedestal and the site.
But the Americans ran out of money.
Here’s the story…
The price tag for building the pedestal and erecting the Statue topped $300,000. The American Committee raised half this sum between 1877 and 1884. Then a crisis occurred: the Statue was due to arrive, funds had run out, and work on the pedestal stopped. In March 1885, publisher Joseph Pulitzer and his newspaper, The World, came to the rescue with a highly successful… Continue reading
Crowdfunding and the Benefits of Standardized Documents
Traditionally, running an investment round has meant a lot of work with the legal documents. Getting the Term Sheet and Shareholders’ Agreement into such a document that all parties agree on, can mean a lot of work and legal costs. Quite often it’s also the investors who bring the initial document on the table (as often the entrepreneurs don’t have those in the first place).
But what is the definition of a standardized document?
For me it is a document that is acceptable for all parties (investors and entrepreneurs alike) as such, without any tough negotiation concerning the key issues. The parties could just select between some key options (like in this Term Sheet Generator) and fill-in the blanks, such as the company name, valuation and the amount of funding.
With the “old way”, agreeing on the Term Sheet and the creating the actual financing documents requires a lot… Continue reading
What About the Exit?
So you got your friends, family and even some angels believing in you to invest in your startup. But what if it takes a bit longer than anticipated to make it a success? Wouldn’t it be nice to have a mechanism for the early-stage private investors to make a partial exit?
Many people believe that having a possibility to exit a private investment withing 3 years would greatly accelerate the willingness to invest. The effect would probably be much greater than any of those planned tax breaks. Tax breaks are useful, after all, only after making an exit.
Why should you, as an entrepreneur, worry about the exit strategy of your private investors?
Aren’t there already enough challenges of your own?
There are quite a few things that make this important aspect to think about.
Well, at least to think about whether it concerns you or not.
According to the… Continue reading
Demystifying (Vendor) Due Diligence
If you’re a company preparing for a financing round in the near future, you should already know what is a Due Diligence (commonly known also as DD). If not, read on. If you do know what Due Diligence is, you might be interested how to do is cost-efficiently.
Wikipedia defines Due Diligence as follows:
Due Diligence is a term used for a number of concepts involving either the performance of an investigation of a business or person prior to signing of a contract, or the performance of an act with a certain standard of care.
Nowadays there are many kinds of Due Diligences, for example Legal, Financial, Technical, Commercial and Environmental. The scope of the Due Diligence will depend on the size and scale of the transaction and the surrounding risks.
We will focus here on investment-round related Legal Due Diligence, and more specifically on Vendor Due Diligence which is… Continue reading
Elevator Pitches on the Video!
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 seconds video and another 5 minutes non-public video which can be shown to potential investors.
To our knowledge, this is the first time elevator pitches are really made 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 high quality of the message.
The filming itself was done by a professional as will be done 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 about 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
- Offers tools and processes to follow the financial regulations
- Offers 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 “Elevator Pitch on the Video”
- Includes communication… Continue reading