Super Angel Investors, Eduardo Shoval and Yori Nelken, Launch “OurCrowd First,” a $10 Million Global Early Stage Fund for Seed Investments

With an investment minimum of $50k participation for accredited investors, the OurCrowd First Fund is further democratizing the world of seed stage investment funds for accredited investors

By Robert Hoskins

Jerusalem, Israel  – With its OurCrowd First Fund, OurCrowd will leverage its established infrastructure to bring equity crowdfunding to approximately 20+ seed-stage companies providing OurCrowd investors even earlier access to promising opportunities. With an investment minimum of $50k participation for accredited investors, OurCrowd First is further democratizing the world of seed stage investment funds, since most other funds require million dollar minimum investments.

OurCrowd Equity Crowdfunding in Israel

“We are proud to be launching our entry into the funds market with the OurCrowd First seed fund,” said Jon Medved, OurCrowd’s founder and CEO. “Our investors have asked for more access to earlier stage deals, which have been hard to do until now on OurCrowd, given the rapid growth of our platform and our average deal sizes of millions of dollars. OurCrowd First will cover the earliest stages of the startup funding journey providing up to $500,000 for a select group of companies.”

OurCrowd First will be managed by General Partners Eduardo Shoval and Yori Nelken, who both come with highly successful track records in early-stage company-building and investment. Shoval has over 25 years of experience in high tech management and as an entrepreneur, co-founding seven tech companies with five successful exits – four of them with valuations in excess of $400M and total revenues of billions of dollars. Nelken has over 18 years of leadership experience bringing startups from concept to exit, including Banter, TimeBridge, and Local Sciences.

“OurCrowd First came about following numerous requests from our 9,000-strong OurCrowd investor base to expand the platform’s reach to include seed-stage opportunities,” said OurCrowd First General Partner Eduardo Shoval. “The fund will provide our investors with a risk-balanced approach to seed-stage investment, allowing investors to build a highly diversified seed-stage portfolio, which could include the next Uber or Facebook, with as little as $50k.”

“Entrepreneurs want more than just checks, and we will roll up our sleeves and work closely with the early stage companies in our portfolio,” said General Partner Yori Nelken. “Providing money to startups is only one part of the equation. We will help each of our companies, to build their management teams, construct, explore and test go-to-market strategies and introduce them to our full ecosystem of support, mentoring and business networks. It’s our secret sauce for generating winning companies.”

The fund is launching with six early stage companies already in its portfolio representing diverse sectors, such as the Internet of Things, Energy, Mobile infrastructure, 3D Printing, and Digital Radiology. These companies include: Zebra Medical, Invertex, Turbulent, Stringify, Rimoto, and TechSee. OurCrowd First has already invested in these companies alongside leading investors, including Softbank, Khosla Ventures, Salesforce CEO Marc Benioff, and Artis Ventures. Two of the seed investments have already converted into larger Series A rounds of significant size.

“At OurCrowd, we see thousands of companies looking for funding every year,” said CEO and Co-founder Jon Medved. “With OurCrowd First, we are leveraging this enormous deal flow and expanding our investment offerings, enabling accredited investors to get involved in exciting companies even earlier. With venture investment at an all-time high and so many disruptive startups just getting off the ground, the potential is simply staggering. It’s just one more way OurCrowd is retooling the world of investment.”

OurCrowd is a leading global equity crowdfunding platform for accredited investors to invest in Israeli and global companies. Managed by a team of well-known professionals and led by serial entrepreneur Jon Medved, OurCrowd vets and selects opportunities and invests its own capital alongside its accredited individual investors.

OurCrowd investors must meet stringent accreditation criteria and invest a minimum of $10,000 per deal of their choice. OurCrowd provides post-investment support to its portfolio companies, assigning industry experts as mentors and taking board seats.

OurCrowd has raised over $130 million in equity crowdfunding for its 70 portfolio companies including Borro, BillGuard, Consumer Physics (SCiO), BioCatch, Abe’s Market, and ReWalk (RWLK, -0.74%), OurCrowd’s first portfolio company to complete a successful IPO.

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Why Every University and College Should Develop a Rewards-based or Equity-Based Crowdfunding Ecosystem

Crowdfunding platforms can be used to support research & development, transfer technology, protect IP, build co-working spaces and finance incubators and accelerators to launch new startups

 By Robert Hoskins

 Austin, Texas – The purpose of this equity crowdfunding article is to encourage universities and colleges to begin thinking about how schools and students might benefit from:

• Building a Rewards-based and/or Equity-based Crowdfunding Ecosystem;
• Providing Easy Access to Seed Investment Capital with Crowdfunding;
• Generating More Revenue to Support Co-Working Spaces and Startups;
• Using Equity Crowdfunding Sites to Finance Incubators and Accelerators;
• Taking Advantage of Investor Syndicates that are Seeking Better Deal Flow;
• Splitting Revenue from Incubator and Accelerator Mentors Consulting Fees;
• Streamlining Technology Transfer Offices (TTOs);
• Cross-Pollinating College Education with Real World Startups; and
• Learning to Build Better Alumni and Local Community Relationships

The Need to Build a Crowdfunding Ecosystem

There is a new generation of “Millennials” that do not want to go to college due to the poor economy and because they do not want to start their life as young adults by incurring $50,000 or more in college loan debt. And there is a growing concern for many students that there may not be a job waiting for them when they finally graduate. 

Read more:  What is Crowdfunding?

But what if there was a way to attract more students by convincing them that they could work their way through college by researching, planning and then launching their own business while earning their college degree? This would allow some certainty about their career path and teach students how to put a lot more money in their pockets than working for a large corporation that will stick them in a cubicle for the rest of their life.

Entrepreneurship Centers

For this reason, “Entrepreneurship Centers” are becoming a huge draw for students who do not want to work for a living, but instead want to live for working. That means learning how to build new startups from the ground up.  Entrepreneurship Centers usually start with a co-working space, then adds a business incubator with mentors to guide students through the startup process and when budget permits, accelerators are created to help students raise money from angel investors, accredited investors and sometimes venture capitalists.

Co-Working Spaces for Startup Companies

The biggest challenge for incubators and accelerators are the costs associated with building a 25,000 sq. ft. co-working space, paying mentors salaries and finding experienced executives with great track records that are willing to share their wisdom and industry experience with students. There is also resistance from departing from the “old school” way of transferring technology from a university Research & Development laboratory, protecting the intellectual property and then utilizing a licensing or royalty revenue model to realize short-term deals to provide a revenue for the college or university. 

JOBS Act: Nationwide Equity Crowdfunding

Enter the 2012 JOBS Act, General Solicitation and a new Equity Crowdfunding alternative financing tool that can help startups raise seed investment capital to startup new businesses. While the SEC and NASAA seems hell bent on preventing the national guidelines from ever being released (they are three years past the official deadline mandated by President and the United States Congress), approximately 14 states such as Texas, Michigan, and Georgia have passed their own Intrastate Equity Crowdfunding Exemptions. Add to that another 15 states have a Crowdfunding Exemption in progress.

Map of United States that have approved Intrastate Equity Crowdfunding Exemptions

Source: CrowdfundingLegalHub.com

Intrastate Equity Crowdfunding Exemption

In states where intrastate equity crowdfunding is legal, any trade school, college or university can build an equity crowdfunding platform and use it to begin fundraising campaigns to raise money, not only from Angel Investors and Accredited Investors, but also from the general public who are non-accredited investors.

Read more: What is an Intrastate Equity Crowdfunding Exemption?

This means anyone can take a brilliant idea, create a business plan and investor deck to support the business case, build an online equity crowdfunding profile and then use marketing campaigns to advertise the deal to millions of potential investors. Like any e-commerce site, Investors can then visit the equity crowdfunding sites to shop for deals by minimum investment amount, by products or services or by vertical business segment to find deals they want to invest in.

This means that a college or university can build an equity crowdfunding site and use it to raise money for every one of its R&D programs and streamline the entire technology transfer process so that promising technology can be transformed into startups businesses. The school collects a certain percentage from each crowdfunding campaign called a platform commission fee. For a $1 million raise and 10% platform commission fee, a college could collect a $100,000 fee from each campaign. This money could be used to fund co-working spaces, incubators, accelerators and Entrepreneurship Centers.

Creating Equity Crowdfunding Investment Syndicates

By the SEC’s securities law, a crowdfunding platform’s management team or employees cannot invest in equity campaign hosted on its own site unless they are registered broker dealer with the SEC. But a popular trend that is growing is building a college or university equity crowdfunding investment syndicate. An investment syndicate is usually led by one or more Super Angel Investors, who are seasoned veterans that have been investing in startups for 20 to 30 years and completely understanding the process of vetting deals with due diligence and understand the real risks of investing in startup companies.

Novice accredited investors with little investment experience join the investment syndicate so that they can follow or invest along side the Super Angel Investors. In addition, where it is legal, investment syndicates will pool a large pool of non-accredited investors together, who make small investments, into a single LLC and then invest the group’s money similar to how a venture capitalist invests money on the behalf of others.

Adopting an Equity Crowdfunding Ecosystem

For colleges and universities that adopt an equity crowdfunding business model might, it might completely change the way a school recruits, raises money, builds relationships with alumni and earns revenue by seeking long-term equity stakes in their students startups versus short-term licensing and royalty agreements.

Read More:  Top 100 Crowdfunding Sites in the United States

Launching an equity crowdfunding platform would not just increase a school’s earning potential, but they might dramatically change the manner in which that Millennials are taught. Instead of just course work, students would be taught at an early age to begin to engage with the world around them and plot a course for their own future destiny rather than relying on fate. Some Millennials might reject the idea of going to college, but the lure of becoming a successful entrepreneur and launching their own business while earning a college education has the potential to create one of the most vibrant and thriving economies the world has ever seen.

Even students that do not start up their own companies have an outstanding chance to benefit from the equity crowdfunding business model. All students seek a way to get some type of real world work experience usually by working as free or highly underpaid interns. Imagine the learning benefits that student would receive when applying their desired major’s education such as business administration, finance, legal or marketing to the intense equity crowdfunding process of launching a startup company.

Instead of adding a bullet point for working a menial job as a small cog in the corporate machine as an intern, students just might be fortunate enough to work on several successful crowdfunding campaigns that would highlight their professional expertise such as business planning, structuring equity finance deals marketing, PR, video production, and/or copy writing. And if the sweat equity pays off in equity crowdfunding shares, they might become extremely wealthy when that startup goes public a couple of years after they graduate. This is how many, many Silicon Valley millionaires got their start. They just did not have a term for the process, which is now branded as equity crowdfunding today.

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