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Equity Crowdfunding Ecosystems (by @jsandlund) by Mind Map: Equity Crowdfunding
Ecosystems (by @jsandlund)
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Equity Crowdfunding Ecosystems (by @jsandlund)

Pre-Funding Nodes

Internal Due Diligence

Draws on domain expertise to curate deal flow; advertises a 2% curation rate

Due diligence team consists of individuals with deep experience investing in the consumer product & retail space

Partnership with MVCtest

Sends samples to consumers across the country. Scores perception of the brand, both the price point and the quality of the product

Valuable data to the company that also augments investor due diligence

Partnership with SPINS

Provides nationwide retail sell-through data. Very expensive data for companies to purchase themselves — most companies wouldn't have access to it individually.

Valuable data to the company that also augments investor due diligence

Offline Events

Currently, selectively coordinating offline investor events.

The Platform/Technology

Making it efficient for investors to (i) discover; (ii) engage with; and (iii) invest in companies, Embedded pitch decks, Integrated scheduling (conference calls, etc.), Investor Q&A forum, "Collective diligence" -- If one investor ask a question, all investors benefit, Integrated legal docs -- executed online

Crowdsourcing mechanism, Enables investors to vote on which companies, out of a pre-screened population, are listed next, (Distributing some of the pre-listing due-diligence to investors)

Comments

I believe the value of the platform/technology is becoming more commoditized by the day

Other critical nodes, which I'm unaware of, but surely exist, include relationships with individuals/companies that provide sources of deal flow

Post-Funding Nodes

Partnership with General Mills

Incubator days: provides valuable mentorship to companies

Growth/Exit Opportunities

Partnership with Procter & Gamble

Incubator days: provides valuable mentorship to companies

Growth/Exit Opportunities

Company/Investor forum

Allows for bilateral updates and communication; e.g. investors can make value-added introductions

CircleUp relationships and know-how

By nature of having previous investment experience in the industry, CircleUp is likely to have influential relationships with key industry participants, including buyers, suppliers, consultants and investors (important for follow-on financings)

Other Considerations

Here a few general thoughts, outside of CircleUp specifically

How will platforms augment the value-add of investors?

e.g. Pre-Funding: Aligning Company A with an Investor B because he/she has more relevant experience/relationships

e.g. Post-Funding: Fostering more meaningful investor communication/support by doing X,Y or Z

Sourcing deal flow: What relationships will platforms build to source high-quality deal flow?

Liquidating the marketplace: What relationships will platforms build to bring additional liquidity to the marketplace?

e.g. Angel Group: "Crowdfund $200k on X platform, and we'll come in for the remaining $300k"

Reference

Nodes: points of value-add, for the investor, business, or both.

CircleUp's equity platform is used as an example

Supplemental Article: http://www.thecrowdcafe.com/crowdinvesting-ecosystems/