Zoe Adamovicz, CEO and co-founder of New find, recently explained how a blockchain or DLT based fundraising platform (Distributed Ledger Tech) actually works. Neufnd was founded in 2016. Its main value proposition is to democratize entrepreneurs’ access to finance and make it more convenient and safer for all to make such investments.
Crowdfunding has become a widely used method of funding upstarts because of the requirements that investors and early stage companies typically have.
There are now many startup founders who have decided to use crowdfunding platforms to market their products and build a strong community and group of investors. Angel investors and VCs believe that these platforms provide startups with an easily accessible way to raise funding without actually having to do a lot of legwork to get financial assistance.
The blockchain- or DLT-focused fundraising approach can have certain advantages, but there are also some disadvantages such as the relative uncertainty about compliance and applicable legislation (at least when it comes to blockchain-based funding).
These problems can be partially addressed by introducing different types of DLT-based financing solutions such as ICOs (Initial Coin Offerings), STOs (Security Token Offerings) or IEOs (Initial Exchange Offerings).
This type of fundraiser has helped manage and distribute assets or funds effectively (in some cases, but there have also been numerous scams) in a safe and transparent manner. There are now many different fundraising platforms out there to help startups or NGOs planning to raise funds to start their business.
In a recent interview, Zoe spoke about how investing in these new platforms can be approached.
While commenting on what Neufund does better or different than other fundraising services, Zoe noted that while participating in the investment space (from the fundraising and investing side), Neufund saw how difficult it can be to find suitable partners and close deals.
She explained that fundraising takes a lot of time, upfront capital, and other types of resources as each investor must be looked after individually or separately. She also pointed out that IPOs are only available to companies that have sufficient capital requirements of at least EUR 100 million. She also mentioned that private businesses are quite limited by factors like size, geography, and capital requirements, and many don’t really fit into those traditional fundraising boxes.
She went on to explain that private markets are quite expensive and quite inaccessible to investors. She pointed out that access to unlisted equity is limited to accredited investors or those investing € 100,000 or even € 200,000.
Zoe also mentioned that Neufund is a two-sided platform that offers investors investment opportunities and companies the opportunity to raise funds. Investors and companies can register on the platform via an intuitive user interface. The investment and fundraising process takes place on the platform itself, which, according to Zoe, saves a lot of time and other resources.
She also confirmed that Greyp-Bikes was the first retail offering to be launched and fully hosted on the Neufund platform. The Greyp campaign showed how effective it can be in turning a community into active shareholders, and it also demonstrated an opportunity for companies to raise funding outside of the more traditional startup hubs, Zoe added. She also noted that it has proven that blockchain, or DLT, can support the future of finance.
The Greyp campaign lasted 45 days and was able to acquire capital of EUR 1.4 million from more than 1000 investors from 34 different countries.
Zoe claims that Neufund enables flexible fundraising. She noted that as a business owner, you may be starting a new startup or part of a more established company and are now ready to grow. So you can be a fundraising expert or even a newbie. And thanks to their platform technology, companies run their campaigns (private or public) efficiently, explained Zoe.
She confirmed that these processes are largely automated and limitless, and that companies are able to obtain funding from almost anywhere in the world. Since the fundraising platform also requires the publication of a prospectus, they don’t have to deal with cap restrictions that more traditional crowdfunding platforms need, Zoe added.
She claims Neufund lowered the barriers to entry because investors don’t need to be accredited or qualified. It could be an individual, an institution, or a VC firm that can only invest € 10 or € 10 million, Zoe confirmed.
While sharing key milestones for Neufund, Zoe announced that just 13 months after the platform was set up, the very first campaign on the platform was also announced. Neufunds ICBM was able to attract more than 1000 investors in 2017.
In particular, Neufund implemented the first “fully compliant” public blockchain offering as early as 2018. The first blockchain- or DLT-focused IPO via Neufund was completed in 2019, and Greyp Bikes received EUR 1.4 million in funding. The campaign was able to attract 1017 different investors from 34 countries with a minimum investment requirement of € 100.
Neufund investors have invested a total of almost 20 million euros via the platform.
Last year, Neufund announced additional funding of EUR 4 million to be used to acquire a finance license and support ongoing new product development.
Zoe also pointed out that they had closely watched the various developments in the blockchain sector and then realized that there was a defining moment: we could create a legally enforceable environment for dealing with safe investments.