Symbid was first covered in the P2P-Banking blog two weeks ago. I  interviewed Korstiaan Zandvliet to get a deeper insight into the service.

What is Symbid about?

Symbid is the first online investment platform where the crowd directly invests in the equity of a start-up or existing company! Everybody can be an investor, each part has a nominal value of 20 EUR and you decide how many parts you would like to invest. The minimum is 20 EUR, the maximum is 2,500,000 EUR! The Symbid way of directly investing in equity is unique. It makes investors partial owners of the fully financed (newly founded) company. Entrepreneurs use Symbid as a quick, simple and fun new way to obtain start or growth capital with help from the crowd. Additionally, once fully funded an entrepreneur has the luxury to interact with his community of investors within a closed online collaboration workspace!

How did you get the idea for Symbid?

During my master degree in Entrepreneurship and new business venturing I noticed that many of my classmates did have an entrepreneurial dream but were reluctant to act upon it due to financial constrains. On the other hand I noticed that people became more connected using social networks such as Facebook and Twitter. By combining these ideas I came to the conclusion that social networks could also be used to communicate investment propositions to a large audience.

What’s the process for entrepreneurs?

Symbid provides an online platform where companies and individuals are able to submit a business idea (proposition). When you register your idea at Symbid, you indicate how much capital is required to start or grow your business. Users search for ideas they believe are viable in generating future profits. Investing is possible from €20,- per part and payable through all accepted payment methods.

Symbid uses a secure separate bank account for all investments on the platform. This way investors and entrepreneurs are assured that investments are used for no other purpose than the financing of business ideas. Until the funding goal is met, an investor has the possibility to freely withdraw his investment from Idea A and for example invest it in Idea B. This situation could occur when an entrepreneur has not made the right adjustments to satisfy his investor. When the target amount is met, the total invested amount, investments are fixed and can no longer be withdrawn.

When an idea is fully funded and all the final investors are known, they are gathered in one legal entity. The process occurs online and is completed when the entrepreneur and investors are being granted access to a secured online collaboration community. Subsequently, the entity buys the predetermined amount of shares with the attracted funding. People within the collaboration community can join forces to bring the newborn company to a successful organization. This online community offers various collaboration tools to actively manage and monitor the progress of the company and interact as one with the entrepreneur or management team. Every individual share is tradable, which makes it even more interesting to invest through Symbid and become a shareholder in a newly founded or existing company.

How is Symbid more attractive than other potential sources of capital (VCs, business angels, banks, …) for founders?

With Symbid, entrepreneurs are able to onboard a large group of shareholders combined into one entity. This group of people can be used for market research but also as launching customer group.  By giving away equity to his investors, the entrepreneur can make sure all incentives and motivations are aligned from an entrepreneur perspective as well as from an investor perspective. Hereby an entrepreneur’s crowd becomes a think-tank for the respective company.

In comparison to the cost of capital, the 5% success fee is for most businesses lower than the average costs of receiving capital via a bank. If these businesses would get financing from the bank at all.

Who is able to invest? And what are the advantages?

Symbid allows investments from 20 Euro onward. Everyone can invest however for the moment we only serve Dutch companies. All investments done via Symbid are transferred into shares with voting rights, direct transfer- ability and dividends. This leads to the highest chance of a sound financial return, financing success and liquidity. Continue reading →