Many investors don’t fully understand how crowd funding works. Therefore I would like to show in detail one of these crowd funding internet companies, WiSeed located in France. I choose WiSeed because it is a platform fully dedicated to the point placing equity investment by selling stock. I only find two crowd funding companies dedicated to selling stock, both based in France and created recently (the second is FinanceUtile.com created at 2009). Furthermore, WiSeed selects only innovating start-ups at early-stage.
WiSeed was created in October 2008 by Thierry Merquiol, Chemist and Biochemist Engineer, expert of innovation and start-ups. He worked 12 years as Sales Director for Air Liquide, a major company supplying industrial gases. Then, from 2002 to 2008, he was the CEO of a business incubator (at the Midi-Pyrénées in France) dedicated to support entrepreneurship, innovation and technology-based start-ups.
The process of projects selection by WiSeed is quite fast, in 15 days entrepreneurs have an answer.
- Step one: Executve Summary sent to WiSeed => if yes, then
- Step two: Entrepreneur fills in a “Selection form” => if yes, then
- Step three: WiSeed considers the Business Plan => if yes, then
- Step four: Entrepreneur makes an Elevator Pitch and Slideshow by videoconference => final decision
WiSeed only targets start-ups based in France, and their web site does not have an English translation. But the ergonomics of the platform is very good, and with some explanations you will easily understand how it works.
At the home page, if you click on the Tab “Choisissez” (means “Choose”), you reach the catalog of start-ups supported by WiSeed. You do not need to have a user account to view the catalog, but to choose a start-up and to invest in, a user account is required.
Home Page:
At the catalog page, start-ups are showed. Currently, only 4 start-ups are supported by WiSeed. Since its creation, WiSeed has funded 12 companies, total 4.45 million Euros (= 5.738.942 USD).
On the WiSeed web site, if you want to know more about a specific start-up, click on its tab to go to its page. Here I will select the start-up « Tonnellerie Renaissance » seeking 100 000 Euros, and we see that 31% of this amount has already been raised.
Catalog page:
At each start-up page, you see 6 Tabs, in which all information concerning the business plan including the financial forecasts are presented (Tab “Données financiers”). If you need more information, you can use the last Tab “Commentaires” (means commentaries) to ask questions to the WiSeed.
Click « Tonnellerie Renaissance » to reach the start-up page.
Start-up Page:
Click « Données financières » to see the Financial forecasts
Financial Forecast Page:
If you are convinced by the growth potential of the start-up and you decide to invest, you click on the button “Investir” (means Invest), and then you reach a page to choose the amount of money which you would like to invest.
In the following example, I choose to invest 2,000 Euros, and the calculator indicates that it corresponds to 20 shares of stocks. WiSeed will charge 1% of the total as fee and during 5 years (100 Euros per year during 5 years in the present example).
The minimum amount of stocks that you can buy is 100 Euros (=128,95 USD) corresponding to 1 share.
You can pay with your credit card, by a bank transfer or sending a check.
Investment Page:
An important point, WiSeed creates a holding company for each start-up. These holding companies are dedicated to investing in the equity of the start-up. The advantage of this model is that the CEO has only “1” investment management company, WiSeed. WiSeed also manages the report of the activity from start-ups to all the investors.
In conclusion, instead of buying things that you don’t need at eBay or elsewhere, you can buy stocks of promising private companies, innovating start-ups, by Internet using your credit card. And maybe one day, you will be the co-owner of a Google, an Apple … or other successes.
Note to readers: I am not related to WiSeed in any matter, I am not an employee, I am not a customer, I am not a supplier, I am not a shareholder of WiSeed, neither of the start-ups supported by WiSeed. Therefore, I have chosen to present this company due to the novelty and the paucity of this kind of company, and of course, the interest for entrepreneurs.
About the Author:
Ari Massoudi is a consultant for new business ventures specializing in innovative start-up and business development. A former scientist, he has a PhD in Molecular Cell Biology the University of Nice. Dr. Massoudi also writes a blog called Management of Innovation.