There’s a long way to go… and Fellow Funders wants to walk it with you!

The start of a new year is traditionally the time when the team of Fellow Funders takes stock of what the last twelve months have brought us, sets new challenges and goals, and tries to make a good planning of what we want to achieve in the new year.

The year 2018 has a double meaning for our company:

We are celebrating our first year of operation and after receiving the authorization by the CNMV on October 28, 2016 (in a record time of 3 months), Fellow Funders launched its first project in February 2017.
It should be the year of consolidation of Fellow Funders as an Equity Crowdfunding platform. After a first year of testing our models (scoring, valuation, tracking…) and approaching investors and entrepreneurs, 2018 should be the year of our “take-off”.

Our activity last year

Looking back, 2017 has been for us a year with multiple emotions. Some pleasant experiences such as financing our first three projects (with quite positive future expectations), the increase of our investor base, and the attention and trust of many entrepreneurs. On the other hand, some not so pleasant; one of the projects of the platform could not be financed, we had to give up helping some projects due to differences in their valuation or insufficient scoring…

Conclusions

Analyzing a little more in depth what have been the last twelve months of Fellow Funders we can draw a number of “interesting” conclusions about our activity:

The Equity Crowdfunding in Spain attracts more and more large investors but still has a little relevant importance for individual investors. The individual investor in Spain does not yet have a significant portfolio of stakes in startups. After the multiple setbacks they have received in the past with products “not according to their characteristics” (preferred stock, pyramid schemes…) this type of investor prefers to concentrate on safer investments, even when the profitability they are obtaining does not justify in many cases the risks they are assuming. It is our job to continue teaching and educating about what alternative investment is and the significant opportunities it can generate.

Equity Crowdfunding platforms must maintain and even increase the quality of the projects we present to our investors. One of the criticisms that has always been made to Equity Crowdfunding platforms is that we attract projects that could not be financed in the traditional way (business angels, venture capital, professional investors…). This perception is gradually changing and together we must become a viable and sustainable alternative to finance all types of projects.

Equity Crowdfunding platforms must provide professionalism and generate sufficient added value. On many occasions, platforms are criticized for being exclusively specialized marketplaces, whose only added value is that we provide large doses of digital marketing to “sell the projects”. Fellow Funders has always tried to change these assessments (both from investors and entrepreneurs) by providing knowledge and professionalism. As important as obtaining funding is to make a proper scoring of the company (to know its degree of risk and to be able to assign a probability of default) and set an appropriate valuation/price. In our opinion, there is a certain inflation of valuations.

Once the investment process is closed, Equity Crowdfunding platforms must develop and provide our users with tools to follow up on the investments. In many cases, when the investor closes the investment, a small “ordeal” begins for him. How will he/she have information about the company in which he/she is a participant in the future? It seems curious, to say the least, that a high-risk investment, such as that of startups, finally remains in a kind of “state of flux”. This makes it very difficult to know what the company is doing and how it is evolving, if new investors have entered, if its business model is scaling, etc. To some extent, I remember with some concern the comment of an important professional investor who indicated in the media that “he had found out that he accidentally had an exit with great capital gains through the Internet”…

Finally, I would like to mention two aspects that we have always pointed out as fundamental:

The need to use professional criteria to define our investments.
The need to diversify our investments in order to reduce risk and optimize our portfolio to maximize returns.

Fellow Funders’ thinking and values

Fellow Funders continues to believe that investing in Equity Crowdfunding is an interesting alternative. However, we always keep in mind the need to diversify our portfolio and the risks we assume. Fellow Funders believes that alternative investment and more specifically Equity Crowdfunding should be a basic instrument for the development and consolidation of the innovation fabric in Spain.

Fellow Funders wants to respect at all times what we have called Fellow Funders commitments (trust, transparency, security and long-term monitoring of projects), the very purpose of our company.

Would you like to join the Fellow Funders world? We are waiting for you!