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New Opportunities for Direct Investment: Life B eyond VC. Jon Medved CEO, OurCrowd Prepared for DC Finance Annual Family Office & Wealth Management Conference. Market Disruption: Crowdsourcing in Finance.

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new opportunities for direct investment life b eyond vc

New Opportunities for Direct Investment: Life Beyond VC

Jon Medved

CEO, OurCrowd

Prepared for DC Finance Annual Family Office & Wealth Management Conference

market disruption crowdsourcing in finance
Market Disruption: Crowdsourcing in Finance
  • Massolution: Crowdfunding portals will raise $5.1 billion in 2013 – nearly double the amount raised in 2011
  • Consumer Lending
  • Rewards-based
  • Donations
  • Venture Capital

“Venture capital-type crowdfunding is the wild card for 2013. It could raise more than a billion dollars …”

Source: Massolution Crowdfunding Industry Overview 2013

Source: Deloitte TMT Predictions 2013 “Let's get together: crowdfunding portals bring in the bucks”

rew ard based crowdfunding where is the reward
Reward-based crowdfunding: Where is the Reward?

The recent acquisition of Oculus raises questions

Pays $2B for company and

Original crowd funders get nothing

Andreesen, Spark, Matrix Partners back Oculus Rift with $75M Series B… then Facebook acquires the company for $2B

December 2013 … March 2014

After raising $2.4M from Kickstarter, Oculus Rift gets the attention of major investors

Now investors are asking why do I only get a tshirt?

Naturally, this plays into the rise of equity crowdfunding platforms

slide4
OurCrowd offers the professionalism and experience of a venture fund, plus the flexibility and choice of angel investing
  • Independence, self-selection
  • Low fees
  • No large upfront commitment
  • Relative speed and ease
  • Legal issues/termsheets handled by firm
  • Exposure to top dealflow
  • Professional due diligence
  • Preemptive/other rights

Angel Investing

Venture Capital

  • Very limited dealflow
  • Term sheet negotiations
  • Limited due diligence capabilities
  • No protection, no rights
  • Large Commitment
  • Hefty management fees
  • Carried interest fees
  • No control, no choice
ourcrowd overview
OurCrowdOverview
  • Global leader in equity crowdfunding, just 15 months after launching
  • Raised over $50M for 40 companies
  • 20 companies with over $1m raised, 2 deals over $3M
  • First follow-on deal funded in 4 hours, 14 follow-on deals on OurCrowd, with 16 of our portfolio doing follow-ons total
  • High-quality, continually improving pipeline of new & international deals
  • 5000 Accredited investors, 500 active
  • Average active investor committed to almost $100K on site
  • Experienced investment team - 150 years combined VC experience
  • Portfolio companies doing very well
crowdfunding for real investors thestreet com growing differentiation from the rest of the pack
Currently Selecting 2% of the deals we are pitched

We always Co-invest with crowd

Accredited investors only

Managed investments via SPV

Good for companies (one check), Good for investors (protections, rights)

Truly International ( active investors from 26 countries)

Focus on Follow-on rounds bearing fruit

Mentors program is unique

Taking Board seats in 65-70% of companies

“Crowdbuilding” resonates and works

Co-investor list is indeed impressive

Our goal is to be the “smart money” in crowdfunding

“Crowdfunding for real investors” (TheStreet.com)Growing Differentiation from the rest of the pack
ourcrowd s investment m odel
OurCrowd’s Investment Model

Management

GP

Accredited Investors



OurCrowd International(GP)

OurCrowd management company

OurCrowd investment vehicle

Special

Purpose Vehicle

Control

Investment

Portfolio Company

enabling paraplegics to walk
Enabling paraplegics to walk

Paraplegics face immense social and medical difficulties living wheelchair-bound. Israeli entrepreneur Dr. Amit Goffer developed the ReWalk for over a decade to produce a device uniquely capable of alleviating key medical complications that come from a paraplegia and allowing paraplegics to walk, climb stairs, and even complete marathons.

Argo – advanced robotics allowing paraplegics to walk again

feeding the world water
Feeding the world: water

Israeli water tech impact

Farmers waste hundreds of millions of dollars worth of water – driving up prices and reducing supply for those most in need of affordable water – because they’re spraying water uniformly across their fields. A mobile app that enables farmers to finely control where their water goes is already saving countless cubic meters of water internationally.

Varigate – the world’s most affordable water

Israel recycles 75% of its water, #1 in the world. By comparison, #2, Spain, recycles just 11% of its water.

“Israel should be proud of being at the forefront of green innovations for water management; these innovations can be decisive in managing scarce water resources” – Angel Gurria, OECD Chair

Did you know that Israel is recognized by the OECD, WWF, and UN for being a water tech powerhouse?

fighting the most deadly killer malaria
Fighting the most deadly killer: malaria

Israel’s interdisciplinary strengths

Malaria has killed millions in the past decade and is among the diseases with the highest toll on human life and economic activity worldwide. Despite this, diagnostics tools used in the prevention and treatment of malaria worldwide remain expensive, slow, and insufficiently accurate for mass implementation. SightDX’s computer vision technology reduces the time to diagnose from several hours to minutes, while being more accurate and substantially cheaper.

The story of SightDX being founded and built by a diverse group of people pooling their personal intellectual strengths is the archetype of the Israeli startup.

Sight Diagnostics represents the convergence of two key Israeli strengths: life sciences/biology and machine vision/advanced algorithms

saving lives by learning from israel s experience
Saving lives by learning from Israel’s experience

Case study: Chilean earthquake ‘14

Israel's unique demand for the fastest, most innovative technologies in emergency alerting forced eVigilo to produce the world’s leading mass alerting system that is now used by governments around the world as a core part of their disaster preparedness plans.

Chile’s 2010 earthquake and tsunami took over 520 lives as millions were left without means to communicate or be alerted to the post-quake tsunami for up to 12 hours. In the minutes after the 2014 earthquake, Chile activated eVigilo’s newly-implemented system and effectively alerted several million people in tsunami zones to evacuate.

vocalzoom
VocalZoom

Technology implementation update

Semicon/components company whose product enables effective voice communication and recognition in even the most noisy environments. “Optical microphone” monitors vibrations on speaker’s throat and face, helping to isolate speech from background noise.

Yechiel Kurtz, CEO, held a successful meeting with President of Samsung Mobile R&D group. VocalZoom will be running tests with engineers in Korea in May 2014.

Strategic investments at this stage in the company’s development are an open potential.

consumer physics scio
Consumer Physics (SCiO)

Product launch - $1.2M in preorders

Miniaturized near-IR spectrometer, allowing for first hand-held molecular sensor. Applications: measuring nutritional information in foods, identifying allergens, authenticating precious metals and leathers, etc.

Co-investors: Khosla Ventures, Dov Moran

Product launch on Kickstarterat $200 price point saw over $1.2M in pre-orders within a week.

Rave reviews in media: VentureBeat,

Validation of strong demand for consumer-friendly health-focused devices at ~$200 price point.

slide15
Zula

Founders are giants in the comm. space

Revolutionizing team communications with cross-platform mobile messaging application. Called “Whatsapp for business”, Zula’s core value is its focus on consolidating communications for teams into one location and focusing on team-centered functions above those offered by existing consumer solutions.

Co-investors: Microsoft Ventures, Mort Meyerson (EDS)

Above: Jeff Pulver, Chair & Jacob Ner-David, CEO

Jacob Ner-David founded and exited three communications companies, the largest of which was Delta Three, which he took to IPO on NASDAQ with a market cap of ~$1.8B.

Jeff Pulver was the co-founder of Vonage and pioneer of VOIP technology and early legislation.

highcon
Highcon

Israeli expertise in digital printing

Moving conventional packaging production from analogue (die-cutting) to digital process (one-button operation). Opens new possibilities for packaging – short and medium runs, high-value packaging in small quantities, labor savings, etc.

Co-investors: Benny Landa (Indigo, $800M acquisition by HP)

Israeli entrepreneurs brought Scitex, JemtexPrinting, Objet, XMPie, and Indigo to the world market, securing major exits to multinationals like HP and Eastman Kodak. Indigo, which HP acquired for $800M to absorb its digital printing technology, was started by Benny Landa, a Highcon investor.

Current opportunity: Raising $15M for expansion. Strategic investment possibilities.

slide17
MUV

A look at MUV’s product

Pioneering solution for interacting with multiple screens through touch, gestures, and voice input. Proprietary integration of optics and wireless tech makes its product the highest accuracy, most versatile and substantially cheaper than any options available today.

CEO Rami Parham demonstrates MUV’s fine-detail control over a projected image. MUV’s solution is both available in a small, unobtrusive add-on, as well as a sensor capable of being embedded within projectors by OEMs.

takes
Takes

Israeli expertise in computer vision

Advanced, patent-protected camera app eliminates the need to choose between taking a photo and video. Takes captures video and metadata including accelerometer inputs, allowing the user to take still images but to produce a full-motion video after-the-fact from the moments captured while photographing.

CEO Amit Man is an expert in computer vision and machine learning and lead algorithm and core development at Israel’s Briefcam. Israeli companies like Briefcam, Mobileye, Rafael, Elbit, and more.

curiyo
Curiyo

Early traction with major publishers

Lightweight application (browser plugin or embedded into websites) allowing content publishers to deliver in-context information to users when they ask for it.

Founded by Bob Rosenschein, serial entrepreneur who founded Answers.com – top 20 web property in the US.

Curiyo launched its first major publisher partnership with USA Today, running its application embedded into the Life section online – a top 10 US news property online.

nextpeer
NextPeer

Evaluating NextPeer’svirality

Fastest growing mobile multiplayer network for Android and iOS with over 70M users.

Provides back-end for developers to quickly deploy their games as full-blown multiplayer games in 10 lines of code, without the headache of maintaining server load themselves.

NextPeer’s user adoption rates surpassed 1.5M per day during recent peak periods, as reported in a VentureBeat article looking at the network’s explosion. By providing the backend for game developers to make engagingly multiplayer products, NextPeeris able to “latch onto” the growth of viral games like 2048n or Candy Crush and grow as the games pick up gigantic user bases.

parko
Parko

Technology’s applications

Mobile app with proprietary, protected algorithms analyzing 8 inputs from phones to predict parking behavior of users, passively inserting users into an ecosystem of drivers looking for and leaving parking spaces.

Parko continually monitors streets to build a map of parking availability likelihoods for each street at any given moment.

Parko’s unique behavioral analysis and motion recognition engines are being licensed to 3rd party applications, branded as Motionize.

Parko is also pioneering the next generation of “ETA” – mapping applications that tap into Parko’spredictive map to include estimated parking time.

nativeflow
Nativeflow

Experienced, successful management team

Complete enterprise data security solution for BYOD IT setups. Nativeflow secures any data on any device and inside of any application being used by employees. It runs invisible to the end-user, allowing employees to enjoy the “native” user experience that motivated them to bring their personal devices into the workforce in the first place. The deep technology behind their solution is protected and patent-pending.

Nativeflow’s management team has a history of success in the security space. CEO EitanBauch was co-founder of and sold Navajo Systems to Salesforce, was CEO of Magnifire, which was sold to F5.

co investing with leading investor groups
Co-investing with leading investor groups

Top-tier funds and institutional investors

co investing with leading investor groups1
Co-investing with leading investor groups

Top-tier funds and institutional investors

* Investor opting for anonymity

ourcrowd s leadership team
OurCrowd’s Leadership Team
  • Steven Blumgart Co-Founder & Chairman
  • Co-director of Glencore's aluminum division
  • Senior executive, management committee at Glencore 1998-2012
  • Jon Medved Co-Founder & CEO
  • Washington Post: "one of Israel’s leading high tech venture capitalists”
  • 12 exits >$100M
  • Co-founder, CEO of VRNG
  • Founder & GP Israel Seed Partners, $260M AOM
  • ElanZivotofskyGeneral Partner Investments
  • 15yrs experience in Israeli investing
  • Managing Partner at Prelude Israel
  • Former Head of Technology Banking, Lehman Brothers Israel
  • Top-ranked Israeli tech research analyst for Goldman Sachs
  • PiniLozowickGeneral Partner
  • General Partner at Alta Berkeley
  • Among first employees at Broadcom, Dir. Marketing
  • Chairman of Provigent
  • Founder and GM of Verisense
  • 5 exits; total value $3B
  • Geoff Levy Chair of Advisory Committee
  • Extensive experience in law, banking and investing
  • Non-Executive Chairman of Monash Private Capital, Specialty Fashion Group and Cromwell Property Group
  • Non-Executive Deputy Chairman of Investec Bank (Australia) Limited
  • GadiMazorGeneral Partner & CTO
  • Serial entrepreneur in mobile/wireless
  • US Senate Advisory Board
  • RIM entrepreneur of the year 2013
  • Ex-8200
ourcrowd s leadership team1
OurCrowd’s Leadership Team

Evelyn Rubin, BizDev Partner

JVP, Senior Editor @ SeekingAlpha

Zack Miller, Investor Community

VP Biz Dev @ SeekingAlpha

Robbie Citron, CFO

Partner @ Jerusalem Global Ventures

Jay Kalish, SVP & General Counsel

VP IR @ Allot, CEO Patir Tech

Audrey Jacobs, VP BizDev

M3 Marketing

Danna Mann, Biz. Strategies Partner

Biz Dev at JVP

David Stark, dealflow

Blackstone

David Arnovitz, COO

Founder of S1 and Secureware

mentor program
Mentor Program

Some recently joined mentors

Dov Rubin

- Co-founder of NDS (sold to Cisco, $5B)

- CEO Itamar Medical

Mike Berman

- President Cardiology @ Boston Scientific

- Serial entrepreneur in medical device space

Eli Campo

- GM Israel @ LivePerson (NASDAQ LPSN)

- SVP @ Shopping.com/Ebay Israel

Ron Moritz

- GM @Microsoft

- SVP CTO @Symantec

- SVP Chief Security Strategist @CA

Warren Adelman

- CEO GoDaddy

- VP at McAfee

- VP at Bigfoot International

RaananGewirtzman

- CEO Broadlight (sold to Broadcom $200M)

6 key investment criteria
6 Key Investment Criteria
  • 1. Great team: Successful startups are founded by great people.
    • We pay special attention to successful serial entrepreneurs.
  • 4. Traction: Investing in early stage companies, but not just ideas or pre-prototype.
    • Early product, users, customers, partners & revenues
  • 2. Market: The startup must address huge market growing like a weed.
    • No arcane ideas addressing niche markets.
  • 5. Sponsorship: Investing in startups/building early stage companies is a team sport.
    • Board, advisors, smart investors
  • 3. Easy to understand: a simple value proposition.
    • Easily understood by us AND by “our crowd”.
  • 6. We seek “deals” and are value-sensitive.
serial entrepreneurs strong backgrounds
Serial Entrepreneurs/Strong Backgrounds

Jeff Pulver & Jacob Ner-David

VoIP pioneer, founded Vonage, VOX, FWD, investor in Twitter and Foursquare

Founded Delta Three ($1.8B NASDAQ), founded Nomadiq

Benny Landa & Aviv Ratzman

Indigo, major global force in digital printing; HP acquisition ~$800M

Dr. Amit Goffer & Larry Jasinski

Founded Odin Medical Technologies (acquired by Medtronic)

CEO Soteira (acquired by Globus), Cortek (acquired by Alphatec)

Bob Rosenschein

Founded Answers.com ($127M exit), Accent Software ($400M on NASDAQ)

serial entrepreneurs strong backgrounds1
Serial Entrepreneurs/Strong Backgrounds

Richard Demb

Founded GC Zone, Founded Popcorn Indiana (acquired by Goldman Sachs)

EitanBauch & Avi Yehuda

Collectively sold startups to Intel, F5, Salesforce.com

ZviSchrieber

Founded TradeUM ($500M exit), Unicorn (acquired by IBM), Lightec (acquired by GE)

Benny Rosenbaum

Co-Founder Magic Software (Nasdaq: MGIC)

Isaac Bentwich

Founded Rosetta Genomics (Nasdaq: ROSG), Pegaus Medical (acquired by McKesson)

not just capital we re creating opportunities
Not just capital – we’re creating opportunities

“I am excited about the value that OurCrowd brings to early stage investors who invest in startup companies. Not only did we raise our seed round on OurCrowd in a week, but we had people from all over the world invest in Zula thanks to this platform”

Jeff Pulver

Co-Founder, Zula

co investing with leading angel investors
Co-investing with leading angel investors

Mort Meyerson

Dell

EDS

Tzachi Sultan

Clal Underwriting

Gideon Ben Zvi

Briefcam

Rami Lipman

Microsoft Israel

Gigi Levy

888

Amdocs

Ajay Shah

SilverlakeSumeru

Shah Capital Partners

Benny Landa

Indigo

Yigal Jacoby

Allot Communications

Moshe Lichtman

Microsoft

announcing strategic co investment agreement with general electric ventures
Announcing Strategic Co-Investment Agreement with General Electric Ventures
  • GE will co-invest with OurCrowd in select early stage companies in the areas of energy, healthcare, software and advanced manufacturing
  • Investing on the same terms as our members/investors.
  • First time major corporation has made such a commitment to an equity crowdfunding platform
  • Huge validation for OurCrowd.

Sue Siegel, GE Ventures CEO :“OurCrowdhas created a unique platform for dynamic early stage origination and funding. They offer a quality investment environment and the partnership will give GE increased access to early innovation.”

press coverage
Press Coverage

“The platform has been an enormous success…the ultimate win-win-win situation, brought to you by an new and improved Israel – innovative& confident.”

Haaretz

“The 5 Most Important New Companies You Need to Know”

Forbes Online

“An Israeli company trying to change the way startups are funded”CNN Business 360

“Medved'slatest mission is to blow up the exclusivity around tech fundraising”

Bloomberg BusinessWeek

“Crowdfunding for real investors”

thestreet.com

"The most interesting investment of the week goes to OurCrowd”Wall Street Journal

press coverage in 2013
Press Coverage in 2013

South African Business TV

summary
Summary
  • Meeting a demand for a better online way to invest in startups
  • Platform works—Raised record sums ($50M+) for 40 companies online
  • Industry-leading performance to date – worldwide leadership
  • Strong Israeli base, global investor reach into 60 countries, 30 active countries
  • Over a third of our recent deals originate from outside Israel
  • Recruited industry-leading team
  • Strong and impressive initial portfolio
  • 16 companies have completed additional funding rounds after initial funding
  • Have provided real value-add for our startups
  • Achieving strong traction in a gigantic market