There is really no way of writing about crowdfunding platforms, without mentioning Kickstarter and Indiegogo. They are by far biggest platforms we use and talk about. But these two aren’t the only ones out there and not all the platforms are created equal. With just a quick look at the rest of the offer on the market, we can find a lot of other platforms, which possibly suit businesses in different (better) ways, than two major ones.
Conda is not just another crowdfunding platform. Conda is crowdinvesting platform. Although the name refers to similar ways of gaining financial means, there is quite a big difference.
Crowdfunding vs Crowdinvesting
Crowdfunding is probably the term more widely recognized by the people. With crowdfunding people make a donation for, usually small reward in return. Crowdinvesting on the other hand gives the investors a chance to participate in future profits a Startup might attain. This is how Vladimir Miloševič, cofounder of Conda Slovenia, explains their crowdinvesting model: “Crowdinvesting is different than crowdfunding in the sense that those who invest also benefit from the growth of the company based on EBITDA growth. The projects are very thoroughly screened (financial and legal due diligence), the contracts are alligned with local laws and directives from central banks (for Slovenia it is Bank of Slovenia).”
Since Conda is a crowdinvesting platform, it’s model consists of a special virtual shareholder loan, with no managerial rights or shares option. However, they can participate in the growth of the company, based on a EBID valuation. This allows scaling companies (i.e. Startups and “grown up” companies with new projects, which are in the phase of growth) to acquire funding without having to dilute their companies.
Two-parted funding system
The investments consist of two funding parts – a private round and public round. Private round is initially conducted to find out whether there is a market interest or not. If the company (or project) draws interest from large investors, they can invest unlimited amount of resources. Once the market interest is confirmed, a public round comes up. In a public funding round, there are certain limitations, as the amounts of investments are limited from 100€ to 5000€. Mr. Miloševič explains why: “We could have allowed larger amounts to be invested but for that Slovenia would need to have a record of registered investors according to the new AIFMD (alternative investment funding management directive) which we don’t have yet.”
Another part where Conda differs from standard crowdfunding platforms is their two level support. With the second part obviously being fundraising, the first one consists of cooperation with several partners like ZMAG, Poligon, Styria, Schoenherr, etc. This way Conda helps its customers maximise their marketing and PR reach. The main reason behind Conda’s two level support system is to make sure the companies or projects succeed even before they are offered to the public to invest. “If the growth of the company is successful the investors can expect the planned or higher return on investments,” says Mr. Miloševič and continues: “but this is different for each company and is visible prior to investing, if the company value according to EBITDA valuation grows 10x the return could be up to 10x depending on the industry. “