I received this interesting piece of news from Jouko Ahvenainen who apart from being one of the founders of Xtract is also the Chairman in Grow VC, the pioneer of a new funding models for start-ups. They launched an invitation-only beta last Tuesday, and is aimed at mobile and web start-ups.
Jouko tells me that this is only the first version, and there will be a lot of new and innovative funding models during the next 6 to 12 months. More information is presented below.
Jouko has given me an exclusive invitation code for 30 London Calling readers to sign up for the private beta – please use MDPCCC.
30 June 2009 – Hong Kong and London, England – Web entrepreneurs struggling to find seed money received a boost today with the launch of Grow VC for venture capital 2.0, the web’s first truly international community-based, open and transparent framework for early stage investing.
Grow VC is the answer to the traditional problem of venture capital being locally-focused, difficult to obtain, uninterested in smaller investments and structured by a rigid model for many web and mobile startups.
Grow VC reinvents the traditional funding model with the Web’s first framework for investments ranging from $10,000 – 1m USD, where investors and startups are equals within one community, without borders.
Grow VC enables early stage web and mobile startup companies to match-make with “funders”, or startup investors, located anywhere around the globe. Having a truly transparent approach, Grow VC is founded on the premise that financial investment should be rooted in the same interactive, community-mindset that the Web 2.0 world is noted for.
Hence an open, information-finding and reputation-building source is the heart of Grow VC’s groundbreaking model, according to co-founder and CEO, Valto Loikkanen.
“We call it “venture capital 2.0″ because it’s the first service with a live, continuous, interactive, open approach to funding,” said Loikkanen. “Anyone who is passionate about finding and growing the Internet’s next big thing can benefit from joining Grow VC.
We are growing a quality, vetted, and respected community and sustainable business model to support the Web’s next rock stars by giving power to the people. Any startup who has become frustrated with the one-sided VC process, as well as any investor who needs one place to find new innovative companies, now have a community to call home.”
Both founders and funders need obtain an invitation to join the early private beta, whereby they receive a free membership (worth $150 or upwards in value, depending on the size of funding sought – the cost of membership when the service launches publicly in Autumn 2009) as well as five additional invitations they can pass onto their own contacts.
By visiting www.GrowVC.com, users create profiles of themselves and their businesses to match-make with other members and discover investment opportunities. All users will be open for commentary from within the community to build their reputations. Third party partners will also join the community to provide the needed framework for funding, such as legal representation, accounting and other business services.
Grow VC directly combats the prevalent challenges of:
-VC firms not needing or wanting to get involved with smaller investments, yet web and mobile 2.0 companies no longer needing big funding in early stages, due to the efficiencies of the web business model
-The difficulty in attracting angel investors outside the entrepreneurs’ immediate circle (friends of friends, family members, etc.)
-The opaque nature of investments, whereby it can be difficult to ascertain reasons for and against investing
-The trend in preferring supportive, hands-on investors to just cold, hard cash
-Angel investors lacking a structure for global diversification of risk
“Our aim is to make Grow VC the place to go for funding, in a shared ecosystem where members gain from other members’ success. Through this approach the funding industry can become a more level playing field. The most compelling reason for a startup to join now is the very real issue of early stage funding not being available as VCs move to bigger deals.
For investors, Grow VC offers a place to diversify his or her risk globally as well as a place to unearth the web’s most exciting new companies,” concluded Jouko Ahvenainen, Grow VC’s co-founder and chairman.
The public launch of Grow VC will include more innovative investment methods that will be revealed later in 2009. During the private beta, Grow VC is also launching a certified partner program, where local or regional startup enablers (incubators, event organisers, law firms, etc.) can get involved to become the primary local access points for members of their community interested in Grow VC.
Entrepreneurs and funders who would like an invitation to Grow VC can use the London Calling invitation code MDPCCC, or get in touch with Grow VC directly.
About Grow VC
Grow VC is Venture Capital 2.0, bringing the first truly transparent, international, community-based approach to early stage funding. Grow VC can help mobile and web 2.0 startup stars secure initial funding for their businesses ranging from $10,000 to 1m USD. Grow VC will not only connect startup entrepreneurs with “funders‟ (investors) to help them discover their common interests, but also provide tools for the process and new transparent ways of doing things. Grow VC international headquarters is located in Hong Kong.