Crowd Equity

After three months hard work we are proud to present our Epipheo. You can reach it at: http://youtu.be/HCr4Cwzt6AQ .

Take a look at it and let us know what do you think of it.

I would like to thank Kirsten Kinne and Chris Ignizio (and their team) back at Epipheo for taking great care of us and our video.

Our platform is now a few weeks away. 

At the same time we prepare our new site which will be hosted at our .com domain.

Tell us what you think! After all everything we do, we do it for you!

We are adding music to our Epipheo. Probable release date next week.

A Swedish "delegation" of ten people from different public and private organisations attended the workshop "Financial instruments" in Brussels the 26 October 2012.

Approximately 100 people from all over Europe attended the same workshop; lots of interesting presentations on how different financial instruments have been implemented around Europe along with usability and result statistics. Some of the presenters went into details on regulatory topics and the upcoming programs. 

Crowd Equity (represented by Leo) got an opportunity to present its innovative model for rural financing (Local capital) using its Epipheo (www.epipheo.com ). The final version of our Epipheo will be presented on this site on Tuesday the 30/10. "Local Capital" is a "bottom - up" model in contrast of the many "top-down" models that are in use today. At the same time the model introduces a new financial instrument to the disposition of the regulators and the member States; Virtual Equity. 

Representatives from many countries showed interest in our model. 

We'll get the opportunity to further discuss our model and the possibilities that crowd equity funding offers to small business (especially those in rural areas) in an upcoming meeting the 16/11 in Brussels.

The Swedish Crowd Funding platform Funded by me released it´s Crowd Funding Equity format the other day. As we, Crowd Equity AB, have not yet launched our own platform it was with great expectations we reviewed their offer.

For those not familiar with the Crowd Equity market there are two main formats, brokerage and integrated ownership.  In the brokerage format the Crowd Funding initiator provides for the crowd to make direct investments.  The initiators job is over when the shares have changed hands.  In the integrated ownership format the crowd invest through an intermediary that will make the investment on behalf of the crowd.  The responsibility of the intermediary, which could be the crowd funding initiator, has just started when the crowd has made the investment. From the crowd perspective it may feel better to make a direct investment knowing that you actually are a traditional shareholder. To be honest I am not sure that the entrepreneur will feel the same having 200 shareholders even though they only own a few percentage of the company.  In an integrated ownership format the entrepreneur will only have one shareholder who will act on behalf of the crowd and take responsibility for providing the entrepreneur with competence and business advice.

There are pros and cons with both platforms and time will show which one of the two will be able to create a sustainable financial model for small companies.  I sincerely hope that the launch of the first equity based platform in Sweden will be a starting point for media and politicians to pay more attention to the crowd funding movement and the fantastic opportunities it can create for many.

Finally, after months of work, we got the sought after decision from the The Swedish Financial Supervisory Authority. This means that it’s a go ahead from the authorities to start the operation. We are still in the process to put the last pieces of the puzzle together so we are almost there... Keep your eyes open, as we will launch any day.  

My partner was interviewed by Euronews a couple of weeks ago regarding the former project e-factory and Crowd Equity. What a marketing opportunity for us!

  The video can be found on the following site: http://www.euronews.com/2012/07/24/business-parties-in-swedish-countryside/

In the early stage of crowd funding people donated money to funky ideas, musicians, artists or things they just liked.  We now see a new phenomenon; your “donation” makes you eligible to receive “a product” that the recipient will produce or has already has produced. It is common that these kinds of projects are “overfunded” which show that there is a market for this new crowd funding approach. It seems to us that crowd funding platforms now are turning into pre-ordering forums for new and exciting products. The only black cloud on the sky is the classification of the transaction.  Can it really be classified as a donation if you get something back?  In our opinion it´s very similar to a traditional sales transaction with its own pros and cons and legal framework. We will follow this trend with great excitement.

At the same time we also see that more advanced platforms are created to facilitate equity based crowd funding.  These platforms signify a shift from an unregulated environment (i.e. donations) to a regulated framework that will attract more attention from the authorities and legislators. It is therefore important that the platforms become more transparent, attract experts from related industries and redefine their relationship with the Crowd. It is too early to say how this industry will develop. Nevertheless, we think that this industry will have a very positive impact on creating new companies, more jobs and improve our economy.  To be continued…

Stockholm 29/05/2012

New partnership offers one-stop-shop for Crowd Equity Funding

European regulated marketplace operator GXG and Swedish equity based crowd funding innovator Crowd Equity are delighted to announce that an agreement has been signed to integrate respective companies business platforms for the establishment of an unique format and process for the new and booming crowd equity market.

 The cooperation combines in essence a primary crowd equity issuance with a regulated branded secondary trading market for crowd equity funded small and medium sized companies.  GXG and Crowd Equity are first on the market with this offer.

The founders of Crowd Equity, Leo Padazakos and Peter Sjögren together with Peter Almberg the CEO of GXG, are convinced that the crowd equity market, after the introduction of the JOBS act in America, will turn into a real game changer. In order to make crowd equity funding sustainable they strongly believe that it is essential to provide a secondary regulated market.

“A well functional crowd equity market will contribute to the creation of jobs and a more sustainable economy,” says Peter Sjögren, Chairman at Crowd Equity.

“Crowd funding will radically lower the cost for fund raising and investors will enable growth, rather than providing venture capital,” says Peter Almberg, CEO at GXG.

For further information please contact:

Peter Almberg, CEO GXG Global Exchange Group, [email protected]

Peter Sjögren, Chairman, Crowd Equity AB, [email protected]

   About Crowd Equity AB

Crowd Equity has pioneered the Equity based Crowd Funding industry. Crowd Equity has invented the ”local capital” model primarily aimed at the development of local economies through “local investment companies (LIC)”.  The model is equally suited for other thematic groups with a strong and active Crowd. Based on a hybrid financial instrument the model successfully avoids all complex valuation issues, simplifies Due Diligence and consolidates the crowd investment to one single shareholder (the LIC). The model is based on transparency and is licensed through an end-to-end web based platform.

 About GXG Global Exchange Group AB

GXG Global Exchange Group is a holding company that through its fully owned subsidiaries GXG Technology AB and GXG Markets A/S run marketplaces and offer one stop solutions for exchange operators.

 About GXG Markets A/S

 We were on a hearing in Brussels two weeks ago to talk about Crowd Equity Funding. The main purpose for the people attending the hearing was to get some attention from the EU administration to make it easier for Crowd Equity Funding initiatives to start and develop. The representatives from the EU Commission were very positive to the concept and to help out if needed. One thing that EU should look upon is the possibility to promote cross border Crowd Equity Funding.

 Crowd Equity Funding is still in it´s early stage in the world and we all need the attention and help from our politicians and public servants to get a fair chance to develop our platforms and get the crowd engaged.  Crowd Equity Funding in it´s right format may be a unique chance for the society to re-connect the crowd with a direct responsibility for the growth of our country.  These are big words but I truly believe that this is something we can´t ignore. 

I read an article yesterday in the leading Swedish business paper.  The key in this article was that Investors (mainly large investment companies and Institutional investors) should look upon the value of the investment not purely from a financial point of view. The investment should also create value for the society. The question is whether this in a short-term perspective will help the world economy to recover and get energized. I like the trend and I think it´s here to stay.

I hope that this “value perspective” will be part of the strategy of many Investors. I am sure that it will give the society a stronger financial system and a more sustainable business environment. Those Investors adapting this strategy will most likely, in the longer perspective, be able to attract more capital and be more profitable.

To optimize the benefit for the society in connection with investments I think that Crowd Funding is a fantastic opportunity that we cannot afford to ignore. With Crowd Funding it is possible to create a close and active link between consumers and companies/entrepreneurs. This link will create financially stronger companies and more vibrant communities as the consumers will be more interested in supporting these companies/entrepreneurs. The other thing that will be difficult for the Institutional investors to pick up is the concept of Slow Equity.

Whatever is on the macro level I think that the foundation of a new financial environment has to start with Crowd Funding. Changing the mind of the mass will most likely change the way the institutions invest in the future. Connecting the money, the benefit and the crowd is the core heart of energizing our economy and make people aware and responsible. It is now time for the government to take a more active role in the development of Crowd Funding and give Crowd Funding a chance to exist along with other initiatives that are sponsored by our government. 

We have now received state funding from several state agencies giving us the necessary resources to speed up education of people in Crowd Funding and to market the great potential and benefits using Crowd Equity as a basis to capitalize smaller companies. The word has spread and the politicians have now shown an interest in our platform. It would of course be a fantastic combination if state funding of small companies could be combined with equity from the crowd. Another alternative route that would give crowd equity a boost as well is a tax deduction for investment in companies being financed with Crowd Equity. We hope that the politicians will see the benefit with crowd equity and begin to transform the opportunities into real value for the society. From a macro perspective the crowd equity platform will give the state a better and more precise instrument for funding companies. The financial risk for the state will decrease as a result of the loyalty the crowd will build around these companies as new customers of the services and/or goods provided.

In turbulent times as this it is vital to find and try new solutions in order to kick-start the gloomy economy. We hope that the government in Sweden will be leading the progress towards more vital economies. We will meet with the Minister of Rural Affairs this week and will be on the same panel as the Minister of Enterprise in the beginning of February. We hope will get their attention and that we with a joint effort can take Crowd Equity one-step further. 2012 will be an interesting year for Crowd Equity and we hope to introduce our platform in Portugal, Greece and France.

After five fantastic days in San Francisco attending the Crowd Funding Conference my brain is going warm about the crowd sourcing method and thinking. The crowd participating in the conference were a mix of people in their early twenties and the late sixties. The concept is young and Internet based but is for sure in line with the mentality of many. Who wants to sign up for a multinational when you can work in a community anywhere in the world with qualified assignments and great challenges! The only thing you need is an Internet connection and a computer. I am sure that the crowd-sourcing concept will change the way people will work in the future and how we are going to speed up the working process by involving thousands. Even if there are a lot of questions and unsolved issues attached to crowd sourcing today it's a movement that is going to stay.

The one thing that made us really happy attending the conference was the insight that our Swedish Crowd Funding model with Slow Equity is one of the most advanced platforms in the world (if not the most advanced).

We are happy to announce that we got the www.crowdequity.com address! US next in line:)

We're now officially entering the ever exiting world of Crowd Sourcing.

A major question is how big this is going to be? 

A wave of generosity from the super rich has spread all over the world during this turmoil. This is a good sign and a generous gesture from a few but it will not lead to a major change in the way the financial system works (or rather the way it doesn’t work).  The answer to a working financial system as the base to a healthier economy involves every individual along with the government and the private sector.

This kind of answer has to be based on a transparent system with instant communication capabilities and the ability to promote individual choices.

An embryo of such a system is a model that goes under the name “Crowd Equity Funding”. This most interesting financial model provides a platform for injecting equity to start ups and small companies. Allowing these companies access to funding from a pool of many supporters, promotes active guidance into the needs of the market, energizes the business environment and creates new job opportunities.

In the process of developing a platform for Crowd Equity we realized that the society is in desperate need to come up with new venture capital models that can support our small and micro companies with equity. In the fast moving economy with high-yield financial instruments and short-term profit small and micro companies are not of major interest for traditional investors. We believe that our entrepreneurs need to work under fair and predictable financial conditions so that their brilliant minds can thrive and their businesses can turn into great companies. Time is key to success!

Our crowd equity model is an integrated part of a financial ecosystem designed for small and micro companies. We have created a viable, transparent and a “slow” financial platform with no short term profit requirements. To find investors that are willing to sacrifice short term profit for the benefit of hungry and risk averse entrepreneurs you need to come up with something else than high ROI – so we created a financial ecosystem which brought the crowd closer to the entrepreneurs and the entrepreneurs to the crowd. The ecosystem is based on strong interest links between the crowd, entrepreneurs and the society in general. The interest could be for local activities, for specific innovations, for minority groups etc. These links of interest encourage the crowd to consume the products or services of the entrepreneurs, the entrepreneurs to make profit and pay tax and it also builds a foundation for social responsibility. In this financial ecosystem the investors will not get their capital back unless the entrepreneur makes profit.

Slow Equity for us is a risk capital model for small and micro companies under which equity can be obtained from the crowd and paid back over time when the company is profitable.

Crowd Funding was initiated by people who wanted to contribute to interesting projects, up and coming artists and striving musicians without any demands for return on capital. The main drivers behind the contribution was in many cases a pure interest in the specific project, a feeling that a small amount of money could make the difference and that it felt good to be part of the community giving the money for a certain cause. The contribution was originally done in the form of gifts and organized thru dedicated websites mainly in Europe and the U.S.A. The arena has changed with Crowd Equity Funding.

Crowd Equity Funding models can provide the Crowd with a structure that is transparent, safe, efficient and well organized for small investment in small companies. For the entrepreneur the Crowd Equity Funding model is often a better choice than other forms of business finance as it builds a customer base, which in turn promotes loyalty, which further promotes stability. Stability is the best foundation for growth. Seeing the Crowd Equity Funding model from a financial macro perspective it contribute to payment of tax as the model will force entrepreneurs to go from a black economy to a transparent system.

Crowd Funding is in essence the matching of funds from the Crowd to entrepreneurs, artists and others. The latest trend within the Crowd Funding movement is the creation of venture capital models, “Crowd Equity Funding”, with a potential upside for the Crowd. Regardless the upside, the driving force behind Crowd Funding still remains the same, i.e. a small amount of money from many people could make the difference and it feels good to be part of a responsible and active community.

Taking the Crowd Equity Funding model to a local level (in contrast to national level) will promote the production of goods and services needed by the local community and to an extend will increase consumption, as the customer base will be more dedicated as a consequence of the investment structure. Crowd Funding is not only about commercial expectations but also about the need to invest in the local business environment that will increase the availability of goods and services needed in the area and potentially create growth.