October 28th, 2014 by: Grow VC Group

Jouko Ahvenainen, Founder and Chairman of Grow VC Group, gave speeches yesterday and today in Washington D.C. and New York to financial professionals and top institutions about the new digital ecosystem for investing and lending. He especially emphasized that when we talk about crowdfunding, p2p lending and other online investing models, we cannot only think one platform that makes some match making. We are talking and building much larger ecosystem that must follow local and global laws and regulations and meet the needs of different of kind of investors and assets.

He, for example, highlighted the following points:

  • There is and will be strong finance (local and global) regulation to this market, starting from Know Your Customer (KYC) and Anti-Money Laundering (AML) to required information and traceable transactions,
  • There are different kind of investors from supporters with $100 to institutional investors with $100M,
  • There are many security and asset classes and investing vehicles and models
  • It is not only the regulation, but also investment policies, due diligence requirements and legal responsibilities,
  • Also existing finance institutions want to use online models and processes more,
  • This is not only about startups, this is about all kind of securities and assets.

The reality is that success of in this market can be based only on the well working ecosystem and cooperation of different services providers. The pioneers are now working on this market. Those who are able to build a larger enough partner network and offer the full service are able to win users.

He concluded the speech to the following points:

  • No one can build this ecosystem alone and have credibility to play all roles,
  • Extremely important to get new digital platforms to work with existing investors, financial institutions and professional services (e.g. research, analysts and underwriting),
  • Digital services can cut unnecessary middle-men (e.g. those whose position has been to be a gatekeeper to information, deals and investors), but it still requires top level value added services to help all parties and bring credibility to the market,
  • The winners in this market focus to do their own part very well according to laws and regulation and partner with other similar actors.

See the whole presentation below or in Slideshare.

October 23rd, 2014 by: Grow VC Group

Today Crowd Valley publishes Crowdfunding Market Report for Q3 2014, unveiling the latest trends of this fast-growing industry, as observed by the company during the last quarter.

Since the start of 2014, the international crowdfunding market kept developing fast, with new actors moving the first steps into the arena and many policymakers inserting the topic in their agendas.

In particular, in the third quarter of 2014, regulatory changes allowing online investments through crowdfunding portals have been taking place in Malaysia and in many US states. Peer to peer lending has been reaching new milestones with one of the biggest US players preparing for the IPO and the UK regulator officially recognizing it as an alternative finance source for SMEs to which bank loans are denied.

Read the whole article and download the report on Crowd Valley site.

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October 22nd, 2014 by: Grow VC Group

After the US and Europe, crowdinvesting is slowly developing in Asia as well. Most of the activity is concentrated around equity crowdfunding, with Malaysia’s new crowdfunding regulations and Japan’s crowdfunding bill, allowing companies to raise equity capital through crowdfunding portals. However, little is known about peer-to-peer lending in the area, which in Western countries is instead showing great potential.

As reported in a recent article on Crowd Valley’s blog, China has a large market for peer-to-peer lending, which after a rapid growth is currently encountering some difficulties mainly due to a loss of faith by lenders, a liquidity squeeze enacted by the Central Bank at the end of last year and also an intense market competition. However, according to a Chinese crowdfunding expert we interviewed, a good set of regulations for P2P lending would probably help this market to recover and establish itself as a valid source of capital in the area. A few P2P platforms are also operating in Japan, with the first one having started its activity back in 2007.

Read the whole article on Crowd Valley Blog.

tokyo-nightlife

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.

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