Wednesday, June 27, 2018

Crowdfunded Jayride provides investors an exit

VentureCrowd founder Steven Maarbani and Jayride CEO Rod Bishop believe crowd-sourced equity funding will become a ...
VentureCrowd founder Steven Maarbani and Jayride CEO Rod Bishop exit crowdfunded equity startup at a $37m valuation giving investors 107% return (Peter Braig).

The first crowd-sourced equity funding raise was priced at 24¢ per share and was one of three rounds the company raised in this manner, equating to about $700,000. 

Jayride listed earlier this year on the ASX at a 50c listing price raising $15m with “follow the seed”investing $8m 

Mr Bishop with the Jayride team at the company's Sydney headquarters.
Rod Bishop with the Jayride team at the company's Sydney headquarters.

Access to capital is a key part in the startup world - and crowd funding is a great source says Maarbani 

If funding is not found in Oz - they will go overseas .

The one that got away 

"ThreatMetrix is a case in point . Raising capital in the  USA and was sold for $US817 million and that growth story was lost to Australia," Mr Maarbani added.

So what is Jayride 

It is an airport travel comparison service covering  2000 ground transport operators and 500 airports and most recently it recorded 28 per cent quarter-on-quarter revenue growth to $633,000 for the third quarter.

A crowd funding investor 

Serial entrepreneur and Sydney Angel, Justin Butterworth, invested $50k into  Jayride's first crowdfunding round as one of a portfilio of  25 “high risk startups” including Instaclustr, taxi booking app Ingogo, photography start-up Snappr and property tech venture 

Mr Butterworth told AFRs Yolanda Redrup 

"Investing in early stage businesses is a high-risk activity and investing smaller parcels with a trusted platform with quality deal flow like VentureCrowd helps minimise the downside risk," 

"It also gives opportunity for diversification and, in my view, gives you a better chance of a reasonable return for this class of asset."

Justin  Butterworth founded home rentals business Rentahome, which was acquired by Fairfax Media for $29 million

Crowd funding and Venturecrowd

Since being founded  in 2014 , Venturecrowd has facilitated 45 deals (10 a year) raising about $25 million.

There are clearly a lot more backable deals out there - the question is how to find them, commercialise them and get them invested.

Crowd funding is a great way of funding - and will be part of the  "traditional capital stack" for start-ups when legislation is enacted later this year, enabling public companies to take part in public crowdfunding.

In the UK, 24 per cent of all venture capital invested done through either of the two leading crowd funding platforms, giving the mum and dad an opportunity to invest and have the same opportunities as Angel investors and venture capitalists.

Venture capital investment returns can be significantly higher than traditional asset classes but also present high risk. With risk diversification and access to information, this risk can be mitigated.

 If you get 10 per cent in superannuation you think your fund manager is a genius - here is an opportunity to invest in an asset class that can give you significant higher returns - albeit with higher risks - with the knowledge that you are supporting innovation and growth! 

The Australian Superannuation  is over $1 trillion - 1000 billion - 1pc invested in startups ($10b) would make Australia the world focal point of innovation .

Opportunities to watch 

An investment opportunity to watch in the future is Anwar Khalil’s “My Recruitment Plus” increasing its annuity by $100k quarter in quarter! - watch this space for more details! 

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