Over the years I have been running TodoCrowdlending.com and talking to my community, I have noticed a certain pattern, a very specific niche in the crowd investments business that seems to be almost like a forbidden tabu for many crowd investors who -no matter how many P2P platforms they have in their portfolios- still look at this particular type of investment with awe, fear and doubt, Yes, I am talking about equity crowdfunding, and perhaps today is the day to start changing that…
…And precisely today we have with us, Janis Blazevics Founder & CEO of CrowdedHero, equity crowdfunding platform that is trying to do things in a different way and actually focus on what investors want for a change… Thanks for coming to TodoCrowdlending.com!
1) First of all, for all our readers that still are not familiar with your brand, can you please briefly describe the platform and its investment proposal for crowd investors?JB
CrowdedHero is a group of young and passionate enthusiasts who have found the blue ocean in the investment industry and are willing to provide investors to invest in companies with great future value.
Our Main proposal is less risky investment opportunities with much higher potential, than traditional investments into the start-ups.
2) Why do you think equity crowdfunding is less popular than other branches of the crowd investment family such as P2P lending and how does CrowdedHero going to try to change that?JB
I would not compare these 2 different investment products because of the different investors profile.
Due to the huge market growths of alternative lending sector in Eastern Europe during last 10 years , platform like Mintos brings to Europeans the option to invest in short term, fixed income loans. Such investment BOOMED the P2p industry, nowadays almost every group of Lending companies have they own P2P platform.
Today in EU we can see lots of pay-day loan restrictions, implemented by governments and volumes are decreasing.
P2P investments are popular because of Short Term nature and second it promises fixed incomes, also investing in P2P loans doesn’t require specific education, deep knowledge and experience- its available for the masses.
Equity crowdfunding market in Eu is growing significantly due to the huge popularity of investment into Fintech start-ups and success stories like Revolut for example.
Equity crowdfunding is an investment product for medium term investors with ability to discover potential of the company’s success in future.
We want to bring in the mature approach to Equity crowdfunding by offering the investments into growing businesses with existing product/service, and already formed income stream.
3) Now, on the other side of the spectrum… While many investors run away from equity crowdfunding, some of us have already quite a few equity crowdfunding platforms in our portfolio, including market leaders such as Crowdcube, etc. so let me ask you this bluntly… why should we consider including Crowdedhero, what is the difference and value you can contribute with?JB
It’s a great Question! Lets take a look at biggest platform statistics….Less than 1% of funded companies has successful Exits and around 5% pays out dividends- that’s why most of the investments do not bring any profits and we see huge opportunity there by offering investments in companies in different stage of growth. Most of start-ups failed in product development and market entry stages, that’s why we DO NOT onboard companies if the product /service is not already fully finished and companies are not close to break even point or have positive cash flow tendency.
CrowdedHero offers Investment opportunities in already running, successful businesses with realistic dividend distribution and high possibilities of the successful Exit in nest 5 years.
4) Definitely an interesting approach, but next question that pops in mind is… how can you actually source those deals, those companies with such a fine equilibrium between growing potential and positive financials?JB
One of CrowdedHero founders Mr.Sandris Rugums is sole owner of Eventus group, which is successfully working in private equity and M&A (Merging&Acquisition) business for more than 25 years. Thanks to Eventus we have high quality Pipeline with growing companies form Baltics, Hungary, Poland and Czech republic .
5) OK, even if CrowdedHero can actually add value to our portfolio by sourcing high quality companies for us… With the ongoing war and the recession looming in the horizon… does it actually make sense to invest in this kind of equity crowdfunding at the moment?JB
We are facing the highest ever inflation in EU. It is the strong signal to invest money now!
Invest your funds in products which you fully understand or you have trust on service provider experience and business approach.
Of course, ongoing war will have impact of investment environment in the region. It’s extremely important to understand companies business model and its relation to East European region, for example we would suggest to avoid investments into companies which business greatly depends on resources and materials produced in this high risk region.
6) How about the onboarding process… there are some steps we must complete before investing… I have tried it myself and it is a fairly easy and straightforward process, but some people might be wondering what is the need and purpose of things like the Convenience Test or the Simulation… Can you comment on this?JB
Thanks for the question, this is very important for all your community.
Investors should know that New EU crowdfunding regulation is into force since November of 2021. Most of the platforms still have not adapted their client onboarding processes and investment model to the new one.
New process is much more complicated than the one investors are familiar with. Please be patient to pass knowledge test and simulation, more KYC documents are required to add during account registration procedure.
Also, platforms cannot accept investors deposits on platform corporate bank account, unless they have not obtained a special licence, EMI for example. Investors’ funds should be managed by Licenced Electronic Money institution.
CrowdedHero is one of the first EU platforms, implementing processes and procedures which are 100% complaint with New EU crowdfunding regulation.
7) Now, we can’t end this interview without talking a bit about the first opportunity published in the marketplace: The GeGe, the subscription-based e-commerce service for baby care products… Why is this company “the chosen” to open the CrowdedHero marketplace and what are the things that make it special?JB
The GeGe brand have proved they business concept in Latvia becoming very popular is short term. They have high quality products produced in Belgium and Germany, combined with modern e-commerce platform and strong multi-channel digital marketing strategy and they expansion plans- business looks very promising.
The key is clear Investment plan, where we can see how company will grow in next years. Product portfolio development , Scandinavian and German market entry is the main positions where this crowdfunding round investments will be distributed. We clearly see company share value increasing possibilities in next couple of years. Company major shareholders are ready to distribute net profit in the form of dividends to crowd investors .
At the beginning of 2027, with more than 100 000 active customer base GeBerry will be positioned as an attractive market player for the existing competitors and strategic investors. Another realistic exit scenario is to be acquired by a leading European or Scandinavian baby care product distributor.
8) Being TodoCrowdlending a web specialized in numbers and statistics, I really have to ask this: Fast forward to the end of this year… what would be the goals you would be satisfied with for CrowdedHero in terms of volume, number of investors, etc.?JB
We will publish 3 investment projects this year with total volume of 500 000 EUR. Number of investors is not a goal, more important is an average investment, together with retail investors will try to attract small investment funds and family offices.
9) And lastly, anything you want to share with all the readers in TodoCrowdlending?JB
Spend more time with your family and friends and enjoy the summer!!!
Thanks very much for your time, Janis!