Equity-based Crowdfunding : Economic and

regulatory challenges ahead

September 2015

Co-investment / SmartAngels case study

Benoist GROSSMANN

Managing Partner

1. IDINVEST PARTNERSLEADER IN EUROPEAN MID MARKET PRIVATE EQUITY

Founded in 1997, Idinvest Partners is an independent pan-European PE manager focused on

the small / mid-market segment

€6 bn of Assets Under Management

3500+ SMEs financed

• May 2010: successful spin-off from the Group

• International team headquartered in Paris: 55 people dedicated to investment and support (vs. 25 in 2010)

• Sustained growth of assets under management: €6bn (vs. €2.8bn in 2010)

€1,800m

€370m

€450m

€1,300m

€2,000m

+ 188 funds (+106 GPs)

+ 48 companies

+ 47 secondary transactions

+ 150 companies

+ 116 companies

Primary fund investments

Secondary transactions

Equity Co-investments

Private Debt

Growth Capital

1. IDINVEST PARTNERSSuccessfully investing in European best-of-breed companies

Idinvest Partners as a specialist in direct private equity investment

A clearly defined investment strategy…

• Covering 3 sectors: Media/Internet/Information Technology, Cleantech and Healthcare

• European companies with hyper-growth potential and worldwide reach

• €2m to €10m per round, €10m to €15m per company

• Lead and active investor (board seats)

A team of 5 investors, with deep sector expertise having worked together for 10 years

1. IDINVEST PARTNERSTECH PORTFOLIO

Adtech/MediaSoftware/ IoT E-Commerce/GamingFintech

2. CROWDFUNDING TODAY

Banking desintermediation (direct access to capital

market products)

Regluatory policies (Loi Macron in France)

Seek for higher-return financial products due to

low-rate environment

$40bn Global crowdfunding market in 2015

60,00

0

Projects crowdfunded in France in 2015

50% Percentage of Business and Entrepreneurship Projects

Favorable Environment

Changes in technology (network effects,

marketplace funding models, mobile accessibility)

Social networks (word of mouth, investors club,

lower COCA)

Technology & Socialization

Behaviors change

Easy access to SMEs capital

Transparency

Reinvention of SMEs financing

HUGE MARKET AND FAVORABLE CONDITIONS

3. TRENDS AND KEY DATA

Total funds raised by crowdfunding platforms worldwide Worldwide market share by category

Volume of equity-based fundings is skyrocketting Business lending overtook consumer lending in Europe

CROWDFUNDING: $1 TRILLION BY

2020

4. INVESTMENT IN SMARTANGELS

Registered by the AMF as a CIP (new French crowdfunding status), SmartAngels enables startups, early stage

and growth companies to issue equity and bonds (launch in S2 2015) within the legal framework of public offering

exemption

French non-listed equity and bonds: market$10bn

WE CHOOSE EQUITYWE TAKE

MEASURABLE

RISKS

WE HAVE A

LONG-TERM

VIEW

WE

UNDERSTAND

BUSINESSES

REPUTATION

COPYRIGHT &

INTELLECTUAL

PROPERTY

RISK CONTROL PRIVACY

8

COMPLIANCE &

ACCOUNTING

SOME CRODWFUNDING PLATFORMS INCLUDE SCORES OF RISKS…

5. CROWDFUNDING POTENTIAL ISSUES

SCAMMERS

AND LACK OF

TRUST

INADEQUATE

DUE DILIGENCE

LACK OF

ACCOUNTABILIT

Y

LACK OF

FINANCIAL

MATTERS

LACK OF

COMMUNICATIO

N

9

…AND INVESTORS ON SUCH PLATFORMS ARE SCARCELY EXPERTS

6. WORKING WITH EXPERTS TO LIMIT SUCH

RISKS

IT MAKES IT ESSENTIAL TO INVEST WITH SERIOUS AND PROFESSIONAL CO-INVESTORS

TOP VENTURE CAPITAL FUNDS TOP ANGEL INVESTORS

XAVIER NIEL MARC SIMONCINI JACQUES-ANTOINE

GRAJON

??? ? ?

10

7. STRONG CO-INVESTORS BENEFITS

XAVIER NIEL MARC SIMONCINI JACQUES-ANTOINE

GRAJON

LIMIT THE

RISKS

SOURCING

NETWORK

EXPANDED

STRONG

EXPERTISE

BUSINESSES

GAIN

TRACTION

MORE

TRANSPARENC

Y

PIERRE KOSCIUSKO-

MORIZET

JEAN-DAVID BLANC FREDERIC

MONTAGNON

11

STARTUPS

SMEs

Individuals

Institutional players

COMPANIES INVESTORS

Looking for

investors

Looking for

investments

Direct financing model without holding management

EQUITY BOND

8. HOW SMARTANGELS WORKS

12

The first crowdequity institutional fund

€5-10m

Principles

• Crowdequity fund between €5-10m

• Rechargeable

• Over 5 years

• Automatic matching of Allianz

client’s investment

Benefits

• Gains insights about Fintech

disruption model

• Highly diversified asset management

• Enlarges its CSP+ customer base

• Reinforces its branding in the startup

ecosystem

For Allianz For Allianz

• New strategic offer designed for

institutional players and funds

• Secures volume of transactions in

the next year

• Reinforces its branding

• Boosts the dealflow and attracts

startups with higher stage of maturity

9. ALLIANZ & SMARTANGELS

2012 €9.2m12k 19

Established as a

pioneer of equity

crowdfunding

Members in June 2015, x3.5 since

the last 12 months, with no

marketing expenses

Raised through the platform

since inception, 2012-2015e

CAGR of +55%

Employees and experienced

board members (P. Robin, X.

Lazarus, R. Le Moal)

13

20

Backed projects including

Canibal (€1.7m), NUMA

(+€1m)

Scalable business model: low

structure cost with no holding

management

First crowdfunding investment fund in

Europe with Allianz launched in April

2015

One vision: from Equity

Crowdfunding to Capital Marketplace

for non-listed companies

10. SMARTANGELS KEY

DATA