Venture Capital Expands in Europe

Google venture capital in EuropeIt has been a long time since the startup industry in Europe expanded. Emerging European companies have not been paid any attention due to their slow scaling, and their home country’s stagnant economy. However, this has all changed. There’s been a large influx of investments in European startups throughout the past year as the world began to recognize the desire to scale to a global level by new European companies. Additionally, venture capital in Europe is far less expensive than it is in the United States and Asia, giving investment companies access to new talent for a fraction of their regular cost.

Corporations that have started to shift their focus over to Europe include and Google. Governments all over Europe are promoting entrepreneurial ventures, and new companies need the capital. For example, Microsoft has not only expanded its venture capital program in Germany, it is also partnering with existing German companies. Google Ventures has infiltrated Europe and the Netherlands as an investor. Both are making money.

These investing corporations are really changing the culture of innovation in Europe. Venture capital declined initially because startups in Europe were known to be stagnant. They did not grow quickly enough and were not aspiring to scale to a global level, being content with scaling only to a regional level, and therefore made money slowly. Only recently, when California firms decided they wanted to expand the scope of their investments, did venture capital firms recognize the potential in young European companies. Google Ventures may have begun this trend when it announced it was opening a venture capital firm in London. They referenced popular companies that had already emerged from Europe, such as SoundCloud, to justify their decision.

Since this is such a new development in the venture capital world, it is difficult to discern the origin and the effects of the European venture capital movement. There exists no clear rationale as to why large companies began investing in European startups, although the why is not as important as what these investments could bring. There is a lot of potential in young European companies, and pouring money into these technology-based businesses could significantly boost Europe’s economy and showcase European technology talent. However, the implications that the venture capital expansion has for the rest of the world are still unknown. The low cost of venture capital in Europe makes it an attractive focus for all venture capital firms, and we will have to see if this has repercussions for startup funding in other, more expensive, parts of the world.

That being said, it is great to see venture capital blooming in Europe. This is an exciting time for venture capital firms and European startups alike, and it will be interesting to see where these blossoming young companies take the tech industry next.

To read more about the venture capital expansion in Europe, check out the Seattle Times.

Todd Crosland Develops Seed Equity Capital Fund

Todd Crosland Seed Equity CapitalOn May 5th Todd Crosland, the CEO of Seed Equity Ventures, launched a new venture seed fund under Seed Equity Capital Partners, LLC targeting $10 million. This fund was developed to invest in early stage technology startups and will benefit from the vetting, sourcing and due diligence process that is performed by the Seed Equity investment team. The fund is permitted to engage in public fundraising endeavors, since it was filed with the SEC under Rule 506(c). The fund has already produced three investments, including a startup that came out of Techstars London in the UK, Spatch, Inc.

The investment opportunities will likely be sourced through Seed Equity Ventures, an affiliate of Seed Equity Capital Partners. Todd founded Seed Equity Capital Partners as a natural extension of Seed Equity Ventures. The fund creates another outlet for startup companies to obtain investment exposure. Seed Equity Ventures’ platform is an online resource for startup entrepreneurs to connect with investors from around the world, and the fund created by Crosland is another funding outlet that is directly connected through the website.

Investors also benefit as investments from the Seed Equity Capital Partners’ fund allows them to diversify their portfolio across the platform. The fund’s investment criteria is as follows:

  1.  Tech companies with unique business models that are potentially disruptive
  2. Early growth in either user base or revenue
  3. Experienced management with past success

The priority is in the disruptive nature of the company in the technology industry. Seed Equity is looking for companies with a product that has the potential to disrupt the technology industry. The fund looks to work directly with company management to gear them for success.

Seed Equity Ventures was developed as an online investment-networking platform where startup companies could connect with investors from all over the world. Startup companies are popping up all over the place, so it is important for capital to be accessible for those with potentially innovative market solutions. The Seed Equity Capital fund was developed to accelerate this, and create an online environment that democratizes investing for startup companies.

Pebble Makes Crowdfunding History on Kickstarter

Todd Crosland JOBS ActPebble’s record breaking $16,500,000 (and counting) fundraising campaign on Kickstarter gives a glimpse of the potential for Equity Crowdfunding.   

Title III of the Jumpstart Our Business Startups Act is potentially nearing the finish line by the end of 2015. It is estimated that final rules could be issued as early as October, 2015. These proposed rules will generate a new class of investors to allow non-accredited investors to invest in equity crowdfunding. Title III will democratize the investing landscape, as everyday Americans, with risk capital, will now be able to invest in private, primarily startup companies.

This adds another element in entrepreneurship. Gaining fans, followers, and future investors on crowdfunding websites will soon become a new wave of business development that will be essential for new companies to maintain and expand growth.

Before Title III, investing was only for wealthy accredited investors, and now the landscape is heading towards benefiting anyone with the Internet available risk capital. Technology is creating an environment of easy accessibility for all, and businesses are most definitely included. The road is being paved for equity crowdfunding, as we expect to see big leaps in the industry in 2015.

Seed Equity Ventures, is one broker that is planning on expanding its investor base beyond accredited investors to include the new wave of equity crowdfunding investors. Seed Equity, a registered broker dealer with the U.S. Securities and Exchange Commission and is a member of FINRA/SIPC, and provides investment banking services to early and growth stage technology companies. Equity crowdfunding is expected to take big leaps in the industry as they prepare for the installation of Title III of the JOBS act. Moving forward, the equity crowdfunding community expects to see significant attrition as the importance of becoming a regulated entity with the Financial Industry Regulatory Authority (FINRA) as a self-regulatory organization (SRO) increases tremendously. Many funding portals are expected to abandon Title III strategies, as they will not have the capital to wait around for SEC and FINRA approval. We also expect funding portals to partner with broker dealers to act as an additional revenue stream.

JOBS act Title III aims to change the venture capital industry from an industry of a couple thousand wealthy investors to billions of people from around the world. With these regulations nearing final approval, the voice of what becomes popular belongs to everyday people from all over the world.

What company will be the future equity crowdfunding success like the Pebble smartwatch? Whoever it is, the masses will have an opinion and a stake in that venture.