From guiding startups to government agencies, and from Latin America to South East Asia, we have documented and researched the hurdles and challenges faced, even as we see tremendous growth in fintech adoption.
Here, in the first of a series of articles, we present an overview to the 5 key stages any organisation no matter how large, the best teams consider when embarking. Whether you're meeting your co-founders in Starbucks or sitting with executives in a board room, here's a journey we are equipped to take.
Clearly, the amount of time required at each leg of the journey varies considerably. It depends on the market in which you operate, the business you are in and the available resources. All things being equal, the importance of having a plan cannot be stressed enough.
Often companies who approach us at stages 3 and 4 invariably go back and revisit stage 1 and validate the right way forward before investing in technology and platforms.
You have an idea of where you are, but what tasks are to be completed to advance to the next stage? Let's consider two true life examples.
1. International Real Estate Crowdfunding
A leading Dubai based realtor has already begun drawing up plans to leverage crowdfunding as a way to increase the number of investors in UAE real estate. He has commited resources in an online platform and is several months away from a beta launch. They are looking at leadership in the Middle East and the possibility of attracting European and US based investors.
In traditional real estate, this company could be considered stage 3, looking at stage 4. But as we found, that doesn't necessarily mean they are the same when it comes to crowdfunding real estate.
Equity crowdfunding is a complex area, with layers of regulation and compliance (for issuers and investors). To succeed, there are specific areas that need to be identified and addressed. For example, what are the (different) marketing strategies that can need to be developed and who is the relevant target investor? What are the regulatory differences when dealing with international vs. local investors. In which markets are investors more likely to invest through crowdfunding platforms and what are they looking for? How can processes be automated to allow better scaling. Fine tuning the concept is a critical step and a pre-requisite to Getting Started.
In subsequent instalments of this series, we will take a closer look at some of these questions and how understanding the fintech environment gives you an edge, and can save costly revisions.
2. Raising Funds in the US
On March 25, 2015 the SEC voted and approved Title IV of the Jobs Act, also known as Regulation A+. These new rules will allow companies to raise as much as US$50 million among both retail and accredited investors.
The changes have far-reaching implications and welcomed by both the startup community and investors. How can crowdfunding platforms leverage the change and what are the requirements? Crowdfunding service providers and US based broker dealers have started looking at concepts to ultimately build a competitive edge through Regulation A+. At the same time, a number of startup companies are looking at how to structure and raise funds.
The rules will come into effect 60 days after the law was passed. During this time, we are helping companies get prepared. Find out how we can help you get an edge.
Grow Advisors offers consulting and professional services on crowdfunding, crowd investing and p2p finance globally. Our advisors develop platforms that connect startup ecosystems, set up marketplaces and co-investment models, structured investment instruments, and find innovative ways to create finance solutions globally.