EQUITY CROWDFUNDING

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MIA Crowdfunding Seminar

January 28th, 2015

crowdonomic.vc @Crowdonomic Facebook.com/Crowdonomic

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Crowdonomic Overview: Largest Crowdfunding Platform in SE. Asia

Business Summary •  Launched in Jan. 2013

•  Fin-Tech business

•  Full Crowdfunding (CF) portfolio

•  Asia-play

Performance •  Quarterly growth rate: > +40%

•  Internationally competitive

•  Industry pioneers / Thought Leaders

Platforms and Collaborations •  Own platforms

•  Crowdtivate – Starhub collaboration

•  EarthHourBlue – WWF Global platform

•  Strategic Advisory + Ops know-how

Organization •  Fin-Tech experts

•  SG, MY – building in Indonesia

•  Respected Shareholder and Advisory group

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A class team with >30 years fin/tech experience

Senior Consultant

Asia Strategy Lead

MBA BA. Law

Senior Consultant

Interest rate Trader MBA Engineering

Reona ShimadaCo-founder & CEO

Nicola CastelnuovoCo-founder & CCO

S.E. Asia

Innovation

S. Korea

Finance

China

M&A

South Asia

Tech

Japan

Strategy

UKS.E. Asia India

Tech

W.EuropeNorth Asia

Finance Operations InnovationInvestment

Experience and expertise

Agenda

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Your Issue: Efficient Access to Capital is #1 Obstacle to Growth

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of Micro-SMEs (Start-ups+SMEs) in Asia say access to finance is their largest obstacle to growth

Source: IFC/ Worldbank Enterprise Survey 2006-10; World Bank GDP 2008 - 2010

40% #1

Crowdfunding… This is Finance 2.0 What it is: Crowdsourcing for venture capital

How it Works: Fundraising accelerated by the power of social media and harnessing the wisdom of the crowds

Fill standard offer templates

Publish Online

Advertise via social media

Access virtual investor community

Reach $ targetGrow your business

Smaller amounts of money from many people to reach higher targets

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Publish Offer PageAccess virtual

investor community

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Acceleration Validation Traction

ECF: Fundraising accelerated by the full power of web, social media and technology

It will change how Start-ups raise Venture Financing

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Efficient outreach to multiple investors via internet

Startups

Low – mid digit FRsRecord millions

8 -12 weeksAverage online fundraise period

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Technology Consumer/Retail Real Estate Fund

• MedTech robotics firm

• Raised S$4.2 M on OurCrowd

•  IPO’d receiving S$46.2 M in net proceeds

• F&B Chain in UK

• Raised S$4.3M on CrowdCube

• Pool of 749 investors – accredited and retail

• Crowdfunding for a hotel in Palm Springs

• Raised S$1.9M on RealtyMogul

• Pool of 85 accredited investors

• Prolific early-stage venture fund

• Crowdfunding $100M fund with SeedInvest

Emerging Crowdfunding Verticals

No reported cases of Fraud

Shareholders can be bundled up into a

vehicle

Investors are also chosen; Use lead investors to

inform market

You can control the level of information disclosure

“I’ll be stuck with managing Thousands of Shareholders (and

forced to IPO)!” “High Risk of Fraud”

“Competitors will steal all of my information”

The Market will be over-flooded with NVA Capital creating a

bubble

Many concerns and challenges are being addressed as the industry evolves

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Agenda

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What if you invested today in a startup…

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…that would one day be worth $200 billion

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Malaysia is home to high growth startups

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Anthony Tan, Founder and CEO of Grab Taxi

Funding Rounds•  $15M – May 2014•  $65M – Oct 2014•  $250M – Dec 2014

Traction•  Dominating

Southeast Asia’s taxi app space in 2 years

•  2.5 million downloads

•  3 taxi bookings made every second

…but startup investing has been limited to the top 1%

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1.  Access to deal flow of high quality startups is typically limited to professional investors

2.  Regulations prohibit startups from advertising their fundraising to the greater public

3.  Not everyone who has investable capital can invest in startup due to minimum ticket size required

Platforms give investors a new way to build a startup portfolio

Without an online platform, building a portfolio is time

consuming

ECF will be a game changer for investors

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Easily make bite sized investments in high quality

startups to diversify portfolio

Centralized sourcing platform with transparent due diligence

process

Access to industry experts and follow experienced co-investors

Need to build up reputation to access competitive investments

Time consuming to find and assess startups to invest in

Need extensive knowledge in industry you are investing in

What’s the upside to startup investing?

Case Study: Rewalk

Equity Crowdfunding: investors put in $3.39 M for 5.4% ownership

Return: 300%-500% in 14 months*

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•  Invest in the next big thing before it becomes big•  Potential to get disproportionate returns

Source:  h4p://www.crowdability.com/arAcle/detail/912/116-­‐returns-­‐in-­‐only-­‐5-­‐hours-­‐peanuts  

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Invest in scalable companies that

have potential to achieve returns

of 20x in 5-8 years

Look for founders that can sell and build,

and have these qualities:

intelligence, energy, integrity

If you don’t have the expertise, invest

with experienced angels who do

Invest in an industry you know and understand well

How to choose which startups to invest in?

INDUSTRY   CROWD WISDOM  

SCALE   TEAM  

How much should you invest?

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No more than 10% of your investable assets. Balance with conservative, lower risk investments.

Don’t invest more than you would be comfortable losing

Non-Professional Investors can invest up to RM 5,000 per company*

(*) Proposed regulations pending parliamentary approval

Agenda

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All major markets in Asia are now at various stages of implementing CF targeted legislation

Countries in Asia debating Equity CF regulatory frameworks New Zealand Live Apr. 2014 – Equity / Debt CF

Malaysia Target Q2/Q3 2015 – Equity CF

Japan Target mid-2015 – Equity CF

India Proposal review – PCP* ended

Australia Proposal review – CAMAC

Singapore Under review - TBD

China Under review - TBD

Hong Kong N/A

Thailand SEC Public Consultation Paper released in December 2014

Source: Crowdonomic Analysis; Competitive Intelligence; Literature search* PCP: Public Consultation Process

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What to expect: ECF Regulatory Framework

(*) Note: Contents in this page are based on SC ECF Public Response Paper and they are still pending parliament final approval. Source: http://www.sc.com.my/wp-content/uploads/eng/html/consultation/140925_PublicResponse_2.pdf

Who: All Malaysia incorporated private companies + SC Registered Micro Funds  

How much: Private Companies (RM 3 mn / RM 5 mn) + Micro Funds (uncapped)

Offer: Primary (new share sale); Secondary (existing shares; 2 wks per 6 months)

Advertisements: May advertise to the public but ONLY via the ECF platform

Investors: Retail (RM 50k) + Angel (500k)+ Sophisticated Investors (Uncapped)

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Recap

•  Secret sauce… Social Media (Distribution) + Democratic Participation

•  Fundraising: Difficult and inefficient = > ECF: New way to do a difficult thing

•  Malaysia – a pioneer market, power to Start-ups

•  Combine with Lead Investors + Conventional best practice

•  Promote, Market and Execute…make full use of this New Freedom

www.crowdonomic.vc

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Contact Us

www.crowdonomic.com!!@crowdonomic!!www.facebook.com/crowdonomic!

Leo Shimada (Co-Founder / CEO) – leo.shimada@crowdonomic.com / (65)82236018!

Nicola Castelnuovo (Co-Founder / CCO)– nicola.castelnuovo@crowdonomic.com / (65)90056541!