successful equity crowdfunding campaigns(3)

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Page 1: Successful equity crowdfunding campaigns(3)

SUCCESSFUL EQUITYCROWDFUNDINGCAMPAIGNS-A NORDIC REVIEW

PREPARED BY ALINA LUNDQUIST & MICHAL GROMEK

JUNE 2015, FUNDEDBYME.COM

Page 2: Successful equity crowdfunding campaigns(3)

FundedByMe is one of the onlyfull-service crowdfunding platforms,offering capital through equity, loanand reward based crowdfunding.

We have successfully funded some500 companies from 25 countries.

Our user base is a rapidlyexpanding network of more than54 500 investors from over 74

countries around the world.We have local presence in

countries around Europe and inSingapore, with headquarters in

Sweden.For more information, visit

www.fundedbyme.com.

REPRODUCTION AND PUBLISHING IS AUTHORISEDPROVIDED THE SOURCE IS ACKNOWLEDGED.

About

Page 3: Successful equity crowdfunding campaigns(3)

EXECUTIVE SUMMARY:

PREPARED BY FUNDEDBYME.COM

This report provides a review ofEquity Crowdfunding in the Nordics.

It is based on all cases that havebeen “live” on the platform since

2012. It discusses different aspectsof signaling based on netnographicreal time data. Results give generalindicators about which factors makesome campaigns more successfulthan others. This report finds that

there are aspects such as externalcertification that are effective tools

to reach “funding goals”.

This report also investigates thatthe analysis conducted has

limitations, including a small samplesize, different countries and size ofcampaigns. It reflects signals, that

have not been reviewed yet inEquity Crowdfunding such as thecorrelation between Social Media

and campaigns' success, thatrequire further investigation.

Page 4: Successful equity crowdfunding campaigns(3)

METHODOLOGY:

PREPARED BY FUNDEDBYME.COM

The campaign outcome was modelledby means of logistic regression as afunction of various explanatorycontinuous and category variables.

The dependent variable was binary andshowed either a successful orunsuccessful outcome. Successfuloutcome was defined as reaching atleast 80% of the initial funding goal.

The signs of the calculated coefficientswere used as a basis for interpreting thedirection of the relationships betweenthe campaign outcome and explanatoryvariables. Marginal effects at means reflected thechange in the probability of thesuccessful outcome given a one-unitchange in the dependent variableholding all other variables constant attheir means.

Page 5: Successful equity crowdfunding campaigns(3)

EURO IN 2014

*BASED ON THE EUROPEAN ALTERNATIVE FINANCEBENCHMARKING REPORT, ROBERT WARDROP, BRYAN

ZHANG, RAGHAVENDRA RAU AND MIA GRAY. UNIVERSITYOF CAMBRIDGE AND EY. FEBRUARY 2015.

European equitycrowdfunding market size(UK is excluded)*

82.56M

+116% CAGR 2012-14

VOLUME INTHE NORDICS

3.7M

Page 6: Successful equity crowdfunding campaigns(3)

PREPARED BY FUNDEDBYME.COM BASED ON OWNFINANCIAL DATA FROM OCTOBER 2012 - APRIL 2015

CUMULATIVE SUM OFMONEY RAISED IN EURO

± Q4 2012 - Q2015

9.541.842 EURO RAISED

Page 7: Successful equity crowdfunding campaigns(3)

FUNDEDBYME'SDEVELOPMENT

Market share in equitycrowdfunding in theNordics

Compound Annual GrowthRate (CAGR) in equitycrowdfunding between2012 - 2014

CAMPAIGNSSTATISTICS

€122,706

83%

449%

€551 MedianInvestment

Average money raisedper campaign

Average amount ofequity offered14%

Median amount ofinvestors in a campaign 46

Average price pershare € 149

€5,935 Average Investment

Page 8: Successful equity crowdfunding campaigns(3)

SOCIAL MEDIAVS . CAMPAIGNSSUCCESS

10 likes on LinkedInincrease theprobability of successby 6%

10 likes on Facebookincreases the probabilityof success by 5,6%

GENDER HAS NO EFFECTON CAMPAIGNS SUCCESS

FEMALE49,7%

MALE50,3%

PREPARED BY FUNDEDBYME.COM BASED ON OWN NETNOGRAPHY

A link to LinkedIn profilesof the company, on thecampaign page increasesthe probability of successby 32,58%

A link to Facebook'sprofile of the company, on the campaign pageincreases the probabilityof success by 31,67%

Page 9: Successful equity crowdfunding campaigns(3)

CORRELATIONBETWEEN A SUCCESSFUL

CAMPAIGN AND:

Campaigns submitted fromcapital cities are 21,2%more successful than others

NO IMPACT

Team members educatedwith relevant businesseducation increase thesuccess rate of campaignsby 24,98%

Team members withprofessional careers inmanagement and/orconsulting increased thesuccess rate of campaignsby 25,98%

on campaign success rate

Amount of employees within theteam displayed on campaign

Team members holding mastersdegrees

Previous entrepreneurialexperience

Page 10: Successful equity crowdfunding campaigns(3)

EXTERNAL AWARDS ANDRECEIVED FUNDING FROMOTHER SOURCES, DIDINCREASE THE SUCCESSRATE OF THE CAMPAIGNS

Campaigns that haveexternal awards are 27%more likely to succeed

Campaigns that receivedgrants or funding from otherinstitutions are 23% morelikely to be successful

Companies which havebeen mentioned onFundedByMe's blogwere 35% more likely to besuccessful

DOCUMENTS

Uploading market statisticsfrom a reliable sourceincreases the chances ofsuccess by 27%

Uploading of reliablefinancial forecast increasesthe chances of successby 37,3%

Page 11: Successful equity crowdfunding campaigns(3)

THIS REPORT HASBEEN PREPARED BY:

PREPARED BY [email protected], / +46 (0)8-559 207 60

Michal Gromek Head of Int. Financial [email protected]

Alina KoutunBusiness Developer [email protected]