After more than 5 years at eYeka, which have taught me a lot about marketing, communication, creativity, crowds, earned me a Masters and a PhD… I am happy to share that I will be joining WiSEED, the world’s first equity crowdfunding platform, as Marketing & Communications Director.
The platform has been a pioneer since its inception (created in 2008, online in June 2009), first by creating the equity crowdfunding model, then by diversifying investment opportunities to real estate or cooperatives, and many exciting projects are in the pipeline. I will participate in building the brand, growing and scaling the business, improving the user experience, among other things.
It is an exciting time to join WiSEED, and I hope to keep empowering crowds with this new endeavor. Here is a short post about what equity crowdfunding is, and why I think it’s a really interesting model for the future of business.
What is “equity crowfunding”? Here’s an example
I’ve invested in a number of big or small crowdfunding projects. For example, I’ve helped MainsLib set up its first helmet lockers in Paris (symbolic reward: your photo on the locker) or finance Panono‘s throwable panoramic camera (tangible reward: get a Panono camera when it’s ready for production), and seen the funding technique’s huge potential. It is a fantastic way to fund entrepreneurial and/or creative projects, one that a lot of people know about, even the everyday man on the street knows about crowdfunding.
But there are also many challenges in crowdfunding. For the Panono project I funded, for example, there have been a lot of delays. I have backed Panono on January 4th 2014, with the promise of holding a Panono in my hands within 12 months… more than 2 years later I still haven’t received anything. They mostly faced production problems, because crowdfunding hardware is difficult, but also finance problems.
To solve the latter, they turned to the crowd again, asking not for people to pre-buy the camera (like I did), but to invest in the company – to become investors by getting equity in their company. Below is their video, which shows the distinctive angkle that reflects this need to attract investors, not customers:
The call for investors was a hit. After successfully pre-selling on Indiegogo ($1.25 million), attracting consumer crowds, Panono also managed to attract investor crowds, securing over €1.6 million from over 1,870 investors. The company can keep developping its product, seek partners, grow its company, maybe even raise more capital from institutional investors… with the confidence and credibility of having secured crowd interest – twice. I still don’t have the Panono I was promised over 2 years ago, but I guess they’re working hard on it…
But that’s what equity crowdfunding is: investing in an early stage, unlisted company in exchange for shares in that company. And that’s what WiSEED does. If you’d like to have an animated explanation, here’s a nice short video (in French), created by the talented crew from Boys & Girls Stories, that explains the different crowdfunding models:
The Virtuous Circle, created for the French alternative finance association (Finance Participative France) by Boys and Girls Stories.
How is WiSEED positioned on the crowdfunding market?
WiSEED has a particular positioning on the market today: a pioneer spirit (it was the first EVER equity crowdfunding platform), a focus on building meaningful business, an ambition to create value by connecting investors and businesses, a desire to continuously innovate, and a will to have fun doing so. Something that some VCs and banks may have lost sight of. That’s for the “soft” positioning, here are some “hard” numbers.
The global crowdfunding market is often known through names like Kickstarter or Indiegogo, but these are just some of thousands of players which can be grouped in 3 categories: reward-based (ex: financing Panono & getting a ball camera in exchange), equity-based (ex: financing Panon & getting shares in return) and lending-based (ex: if Panono had borrowed money from the crowd, paying back the initial amount + interest rates).
The latter type is the biggest, in terms of numbers, as Massolution reported: “While rewards- and equity-based campaigns typically get the most headlines, it’s lending-based crowdfunding that dominates the industry: in 2014, it raised $11.08 billion dollars” – over 11 billion dollars! And the growth will continue, Massolution says.
While equity is one of the smaller categories – it’s more engaging and risky to invest in a start-up than to lend with a fixed interest rate – it is a growing one. In the UK, it now represents 15% of all seed and venture funding. In France, Statista notes that equity crowdfunding transaction value “is expected to show an annual growth rate (CAGR 2016-2020) of 23.02%.” WiSEED is one of the leading equity crowdfunding platforms in Europe, allowing individuals and organizations to invest their money locally in ways that are meaningful to the economy and create jobs.
WiSEED allows you to invest money locally in ways that are meaningful to the economy and create jobs
Here’s how much money we’re talking about, according to Investiere VC’s study, shared in March last year:
While this ranking is accurate in showing big players, I wonder where they found these numbers (and why they list their own VC fund among crowdfunding platforms). I must admit that I share this here because it’s the only ranking that I found in English, but I have a doubt about their methodology.
A look at this French crowdfunding study, with interactive charts and open data, looks more accurate. Here are some numbers from that website:
Beside the transparency of the data, and the fact that WiSEED is a major industry player in France, these number help clarify the picture. There are two clear leaders on the domestic market, Anaxago and WiSEED, with a rather distinct positioning.
Without going into details, one of the key differenciators is that the former requires a minimum investment of 1,000€ (average is around 8,000€), while the latter allows a minimum investment of 100€ (the average is around 2,500€). Note that some go to extremely low levels, like the Germany-based Companisto – listed above already – which doesn’t require any minimum.
What will my role at WiSEED be?
A recent Deloitte report showed that crowdfunding is very well-known by French consumers (38% know what it is) but few (6% of French consumers) actually use it. “Besides the absence of a need, lack of trust in platforms is the second most often cited restraint by French consumers,” the report says. This is both a decent basis to build on (notoriety), but also a great challenge to take (building trust), no?
So my role will be to build the WiSEED brand, to increase its awareness and raise its profile, to evangelize democratized investment, to scale the product and innovate service offerings, to improve acquisition & retention rates, to monitor investor satisfaction… and many other things that I won’t be able to do alone. I will have to assemble a team (are you interested to join? contact me) and oversee all the marketing- and communication-related activities of WiSEED, which will be a fascinating thing to do!
There will also be an important innovation aspect, connecting WiSEED to the smartest people in academia and beyond. I am happy that WiSEED is a very open & curious company – like eYeka is – and that there is a high interest in collaboration with researchers and analysts. So, while my focus will be on business and not on academia, do not hesitate to get in touch for research-related projects. I would be happy to facilitate your efforts in a spirit of co-creation and open innovation.
And since you never end blog posts without a clear call-to-action...
To find our more…
Last, here are some additional links that I found interesting, and that I would like to share in case you want to find out more. There is a bit of everything, a diverse mix of insightfull pages that I would encourage you to look at. Some of it helped me prepare for my future role. So, in reverse chronological order:
- “Companies ‘could do better’ at communication after crowdfunding rounds” (Press article, in English, Stuff.co.nz, on 10/04/2016)
- “Opération crowdfunding réussie pour Ethiquable” (Press article, in French, Lejournaldesentreprises.com, on 06/04/2016)
- “Minister of Economy Gives French Crowdfunding Sector a Boost” (Blog post, in English, Crowdfundinsider.com, on 30/03/2016)
- “WiSEED: Pleasing the Crowd” (Director interview, in English, Linkedin.com, on 25/05/2015)
- “Citizen bid to snatch Toulouse airport out of private hands” (Press article, in English, 02B.com, on 21/11/2015)
Bon courage et a tres bientot
Thanks & Best Regards, Alexandre