October 21st, 2014 by: Grow VC Group

A historic shift is taking place in the world economy: record numbers of small and mid-size companies, microenterprises, and garage entrepreneurs are going global. Before content to sell in the giant U.S. market, now even the smallest American businesses are courting overseas shoppers. One attractive target is middle classes in emerging markets, a $30 trillion market by 2025. Aiding these globalizing companies are disruptive technologies such as digitization of products, 3D printing, Bitcoin, and ecommerce, all of which are shrinking costs for small businesses to do cross-border business.

Today’s exporters are smaller and younger than ever. Many are “born global” companies that internationalize very early in their life cycles, and sell in many markets all over the world. The shrinking of exporters is most intuitive in consumer products sold online: 97 percent of U.S. eBay sellers, most of which are micro and small businesses, also export, to an average of 28 markets – a stark contrast to the traditional pattern where 1 percent of American companies export on average to 1-2 markets. Exporters are small also in such sectors as IT, biotech, and cleantech, where U.S. technologies can be even better suited for emerging markets than they are for the U.S. market. One of countless examples is Sunsaluter that provides energy off-grid for underdeveloped markets, devised by a 21-year Princeton grad Eden Full. But also smaller “heartland” companies in manufacturing, food and beverage, and financial services, among others, have realized that overseas markets are often great fits for what they have to offer.

But problems loom. The export infrastructure writ large, from complex customs procedures to high fixed costs of international transactions and benefits of shipping large volumes in bulk, is created for the traditional engines of U.S exports, giant corporations.

Finance is a particular pain point. Exporting is a capital-intensive endeavor. Globalizing companies need substantially more money than the domestic companies, to cover the many up-front costs associated with going global, such as creating overseas distributor networks and rejiggering products to meet foreign standards. The costs of each transaction also grow in the international context: there are higher shipping, logistics, and trade compliance costs. Companies need quick access to working capital when needing to fulfill large international orders. And toughest of all is to secure growth capital to expand a company’s sales force and production capacity to serve the global buyer.

What’s in it for investors? As we laid out in our previous blog, access to globalizing companies, a high-growth, outperforming asset class with global growth prospects and mitigated downside. International upside at U.S. risk. With equity to exporters, everyone wins.

Read the whole article on TradeUp Blog.

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October 20th, 2014 by: Grow VC Group

The post is written by Paul Higgins, COO of Crowd Valley Inc.

Last week on October 9th I took part in a roundtable discussion panel on Alternative Financing at the Invest in Photonics event in Bordeaux, France. The event is the primary European conference looking at investment across the photonics industry including applications in environment and energy efficiency, life sciences, consumer electronics, aerospace and transport, 3D printing and advanced manufacturing. I was joined by a sector-specialist serial entrepreneur and angel investor, a partner at a VC firm, B-to-V, with a focus on photonics, and a director of the French growth-stage SME stock exchange, Alternativa.

Previous panels represented both companies looking to raise capital and investors, including Venture Capital and corporate R&D funds. Both sides of the capital raising equation made the process in Europe sound challenging. The role of a photonics company’s CEO is now, according to several panelists, a full-time fundraiser. Meanwhile, the number of specialist funds in this area is decreasing and there was little evidence to suggest that Private Equity or larger development funds would support by taking an interest at lower fundraising levels. The average funding goal for the twenty photonics companies pitching at the event was €2.5m.

Read the whole post on Crowd Valley Blog.

Photonics Industry Conference.

Photonics Industry Conference.

October 14th, 2014 by: Grow VC Group

One year has passed since the SEC released Title II, which removed the ban on general solicitation and general advertising for private issuers. Since then the entire US crowdfunding sector has been waiting the famous Title III, which would eventually allow also non accredited investors to invest through equity crowdfunding portals. Nevertheless, even though Title III is still missing, the US market of equity crowdfunding has been flourishing with interesting numbers.

As reported in the last Crowd Valley Market Report, the most diffused asset class among the US securities crowdfunding portals is private companies. During this year, since the release of Tite II, an estimated total of 534 out of 3,361 private companies successfully hit their equity crowdfunding target, collecting all together $217.7 million equity capital, which averages $407,685 per company. Not a bad start, especially considering that this sum comes only from accredited investors and that it is estimated that only a minority of the existing 9 million US professional investor signed up on equity crowdfunding portals. Most of the equity crowdfunding activity (both raising capital and investing ) is done in California, New York, Florida, Texas and Illinois.

Read the whole article on Crowd Valley Blog.

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October 10th, 2014 by: Grow VC Group

Crowdinvesting is a relative recent phenomenon which is growing in many different countries around the world. Several people have heard about equity crowdfunding or peer to peer lending only in the last couple of years. Nevertheless, as young as it may seems, crowdinvesting, especially in the form of P2P lending, has been out in the market for while: some pioneering companies have been operating since the early 2000s, while Grow VC Group itself – i.e. Crowd Valley’s parent company- has been active in the online investment space since 2009. In the past few days crowdinvesting has reached a new milestone with the IPO filing of one of the most established peer-to-peer lending platform in the US.

The fact that a crowdinvesting platform is going towards an IPO does not just increase the company’s value itself, but gives a lot more value or – better – validity, to the the entire crowdfunding sector. Even though this new financial source has gained legitimacy under several aspects in the past couple of years – with national authorities showing interest and working to release ad hoc regulations, early stage investors financing platforms to support their growth and allow them to deal with an increasing demand – the IPO filing of one of these companies gives a new, strong signal to the world about where crowdfunding stands.

Just by looking at the numbers of the most established peer-to-peer lending platforms one can quickly understand that this is a phenomenon that could not be longer ignored by public markets: Lending Club, the platform that filed for the IPO, for example, said it has facilitated more than $5 billion in loans since its inception in 2007, of which more than $1 billion were made in the second quarter of 2014.

Read the whole article on Crowd Valley Blog.

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October 9th, 2014 by: Grow VC Group

In the last week TradeUp was opened to accredited investors – angels, PE funds, VCs, banks, lenders. So what’s in it for investors to get on TradeUp? Here are 7 answers:

1. How is TradeUp different in the crowdfunding space?

TradeUp Capital Fund (tradeupfund.com) is the first equity crowdfunding platform for globalizing companies and savvy accredited investors. We enable globalizing companies and accredited investors (angels, super angels, VCs, PE funds, family offices, lenders, etc.) to connect and transact on debt and equity deals of $100,000-$20 million.

In contrast to the many crowdfunding platforms that cater to pre-revenue businesses, companies on TradeUp are proven and pre-screened, and typically have been in business successfully for several years. Most companies are U.S.-headquartered.

We are also different from other platforms in that all companies on TradeUp are already exporting – or at the very minimum have very clear pathway to go global, such as some have foreign purchase order ready to go. In short, these are companies with global growth potential with mitigated downside.

If you want to stop reading now and go and browse deals on TradeUp, please see home page tradeupfund.com; to sign up and see company documents and interact with companies, please go to http://tradeup.platform.crowdvalley.com/sign-up and select as your role “investor”.

Read the whole article on TradeUp Blog, and get answer also to the following questions:

2. Why focus on globalizing companies?

3. Why exactly do globalizing companies outperform?

4. So how big is this market – how many globalizing companies are there? 

5. Why are globalizing companies raising – and not going to banks?

6. Why do crowdfunding for globalizing companies?

7. How do I see and contact companies on TradeUp?

Growth and Globalization Correlate: Highest-Growth U.S. Middle Market Companies Are Also Most Globalized

 

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