Standard Investor Profile
Frederic Baud
My current thinking is that it could be key to the different business
models. A P2PVenture platform gives access to a "virtual" fund: The
sum of the potential investors that are connected to the platform and
whose savings allocated to venture investments is potentially
available for actual investments once a project has been selected. To
make it simple, we can think that there are several ways to equate a
€200M fund. 2M potential investors ready to invest on average €100,
200.000 potential investors ready to invest €1000,...., 2000 potential
investors ready to invest €100.000.
We see that depending on the average amount per investor, we are
dealing potentially with different profiles. Depending on the number
of investors necessary to equate a €200M fund, we are also dealing
with reality constraints (is there this number of available investors
in the actual population for this amount?), then there is a sizing
issue (sizing of the platform, of the means to get the investors
connected,...).
In fact, it made me realized that the vast amounts of money available
for institutional investors (pension funds, insurance companies) are
usually the result of money collected on a very large number of
individuals and accumulated on a long period of time. I suppose that
the choice of the target profile of investor population is key in the
strategic process. Once the population is defined, the type of
projects that can be funded may possibly be deduced from this
population ability to screen and contribute (in cash, knowledge and
network) to the project. -- FredericBaud
Well, yes but the other hand is also possible: you screen projects
that require to be funded and then look for investors. Actually this
is the most common way already under process. Yes there can be various
business models and we ll to find various win win models for investors
and projects and solve the chicken and egg issue. PatrickLardant
I think a potentially powerful and disruptive part in the P2P concept
applied to venturing, is in the distributed screening process. If we
screen before presenting to investors (beyond minimal screening of
junk), the platform will incur costs similar to those of Banks, BAs or
VCs. On the other end, the matching process could create a powerful
filter where really interesting projects would emerge from the
distributed screening of the potential investors. Then, when a project
gathers interest and that investors interested have a profile you
value, you might be interested in investing yourself. -- FredericBaud
Yes indeed, very interesting subject, but Frederic, I m
wondering...why do we write here in english instead of french as far
as we are both french guys ? Moreover should'nt we first target local
(french or european) start up, BA etc. ? -- PatrickLardant
Patrick, this is a good point. I don't have a clear answer to that
yet. I agree that the P2PVenture will be implemented differently in
different contexts (US, Continental Europe, EuroLand, France,.. see
the corresponding question in the Q&A). But I'm also trying to attract
English-speaking professionals here to get more momentum behind the
movement. So, if in a couple of weeks, we have indeed only French-
speaking people writing in English, we should probably stop this
awkward situation. But it may be worth trying a little longer (I know
for a fact that some English-speakers already bear with my poor
English and are aware of what we are doing). What do you think? --
FredericBaud
Frederic, I'm french so my opinion is that yr english is perfect ! ;o)
PatrickLardant
I think that a disruptive part of the P2Pventure model could be the
ability to screen companies or projects as soon as they start and to
strenghen them, to help them tp be more open minded and structured and
then to fund them with seed money from BA's or from other sources. So
you could say: "Yes but this is already done within BA clubs and
associations" . Actually not at all. When looking for BA's, project
and startup founders show their powerpoint bizplan but very often,
this bizplan has not been reviewed by any advisor and there are many
problems: lack of management, inadequate bizmodel, inadequate ramp up
and cash flow analisys, lack of barriers for competitors, lack of
strong board members etc. I believe P2P-venture could solve all those
issues. Even more, BA's club are "associations Loi de 1901" and they
are not authorised to give financial advices such as a fair value for
the investment nor any keu advice within each vertical sector. You
remember I went last Thursday to a bizangel meeting where 4 projects
were asking for seed money. I saw at least 2 interesting cies but both
of them should rethink their business model (my opinion ;o) ), the
third one had a good idea but not enough market segmentation, the
fourth had a slide starting with "We are The #1 worldwide company of
blabla " and of course they "no competitors" within a "huge
market" ;o)... Well well well...as you can understand we could find
easily an interesting model bringing a lot of added value to those
projects in order structure them first, fund them and then bring them
to the market. -- PatrickLardant
I totally agree with you. And this falls also in the Investor Profile
question. What is the technical and business knowledge that we seek in
the investor population so that they can actively contribute to the
"incubation" of the project? Interestingly, I think that we could find
some correlation between those skills and the level of investments
(€1000, €10.000, €100.000,...). I think that part of this conversation
can also happen within the Prototype sub-space. -- FredericBaud