Companisto launches a pan-European equity crowdfunding platform

Companisto, an equity-based crowdfunding platform headquartered in Berlin, announced yesterday the launch of its new pan-European crowdfunding platform. The new English-language website will begin accepting applications from startups across Europe and will give investors from non-German speaking countries the opportunity to cash in.

Since Companisto’s launch two years ago, more than 15,600 investments totaling over €4.5 million have been made by its investors or “Companists”. The platform has a 100 percent success rate for startups that chose to crowdfund through its platform. Companies that have been funded through Companisto include frozen yoghurt chain Wonderpots and healthy snack delivery service BiteBox. Bitbox had 1,298 investors, which the crowdfunding platform claims is a record number for European crowd investing. Not all startups are welcome to fund through Companisto, however. The platform has a strict selection process that requires its applicants to provide detailed business plans, financial projections and a video.

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We sat down with Companisto Founders David Rhotert and Tamo Zwinge to get the scoop on the launch of their new pan-European platform, their take on future of crowdfunding and advice for those interested in crowdfunding through Companisto.

Why was launching Companisto’s European crowdfunding platform the right decision, right now?

Zwinge: When we started Companisto in June 2012, our platform was always entirely in German. We were anticipating, of course, investors from Germany and, to some degree, from Switzerland and Austria. But the interesting thing to see was that we had investors from 32 countries. So it must have been the very interesting startup companies that we had on the platform that people were investing in even from countries that are non-German speaking. For us, it was the next logical step to say that, since there was such a large demand from investors from all around the world – from places like Hong Kong, Singapore and Australia, we would build up an English version of our website to truly allow everyone to invest.

Another point is that, for us, when choosing the startup companies that are on Companisto, it is quality over quantity. We are not having 20 to 30 deals at the same time but only two to four that are really of the highest quality. We have had over 1,000 applications since we have launched, and we only choose 25. And if you are looking for the best startup companies, then you cannot limit your focus to just Germany. You have to look at all of Europe.

Who will your new major competitors be in the European crowdfunding market?

Zwinge: Of course, there are other crowdfunding websites that are in English, but there is no real pan-European platform yet. Even though our site was only in German, we are already the biggest pan-European platform.

Why do startups choose Companisto as opposed to other crowdfunding platforms?

Zwinge: One important piece of information is that David and I were both lawyers from major international law firms from the sectors of venture capital and mergers and acquisitions. So we are very familiar with structuring venture capital financing rounds. That is why, right from the beginning, the whole shareholding model of Companisto was structured so that it would be compatible with VC follow-up financing rounds. And for most startups, it is, of course, very important to not only get crowdfunding but then be able to get follow-up financing rounds through VCs in order to grow quickly.

This leads to the fact that we have a very good reputation in the venture capital industry in general, and we have a lot of deals on the platform that have already received substantial business angel investment or VC investment. This whole cooperation with the existing venture capital branch makes us very attractive for all startups with ambitions.

Rhotert: Our structure for follow-up financing is also very important for investors. If you invest in a company, you want to know that this company has the opportunity to grow quick and, in many cases, the company will need additional money. This is a really strong USP for Companisto. Also the fact that we have a really big community with very diverse and young people that invest into the Companisto startups. That is also very valuable for the company.

Tell me more about your Companists. Do you have an typical investor profile?

Zwinge: That is a really interesting question, since there is really no average investor. It is possible to invest as little as €5 and up to €100,000 – a huge range. You have a huge range of people who invest for different reasons. You have professional investors or even business angels who really like the Companisto deals so much that they invest €25,000 or €10,000 everytime there is a startup presented on the platform. You also have students who build up their portfolios with as little investment as €50 EUR. There is really no average investor but simply a very broad range of people.

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Where do you predict you will gain the most traction with Companisto with the new English website?

Zwinge: We were already very surprised that people were investing from 32 countries. We would have never even imagined it. It will also be interesting for us to see from which countries our investors will come from. We see that equity-based crowdfunding is a trending topic in many countries – not only in Europe. They could be from anywhere. We will be surprised, as you might be.

Companisto is very selective platform. What advice would you give to startups wanting to apply to crowdfund through Companisto?

Rhotert: We’re looking for such entrepreneurs who are highly motivated and really passionate about their business. If these entrepreneurs also have a promising and scalable business model, we have a solid base to talk about setting up an equity-based crowdfunding campaign on Companisto. So, you need to have a) a highly scalable business and b) be highly motivated and passionate.

Crowdfunding has gained a lot of attention and great popularity recently. Where do you think crowdfunding is right now in its evolution?

Zwinge: In the last one to two years, there has definitely been quite a big evolution in the professionalism of equity-based crowdfunding platforms. This is still a very new industry. I still think that we are at the very beginning of a long evolution, because equity-based crowdfunding is interesting for a very broad range of people – that we already see on Companisto. But I do think that most people in Europe and across the world still do not know that there is such a thing as equity-based crowdfunding. If you bring together its potential, then you will see totally different amounts of invested capital on platforms.

How did the original idea for Companistro come about?

Zwinge: There were several factors. David and I already founded another company, and we experienced that it was not so easy to raise money at least from traditional sources like banks and also VCs – even if you have a very good business model and your company is growing. We were managing this company for four years, then sold our shares. After, we were working as lawyers, and we had a lot to do with structuring deals and also noticed that there are a lot people who would love to invest in startups but not €100,000 as business angels do. We saw that there was a huge demand from both ends – companies who need money and people who would love to invest in startups companies, especially because of all the media that cover successful startups. It was clear to us that we needed to join these two demands and build a platform that facilitates these kinds of investments.

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Rhotert: What is very interesting too is that we started, because we saw a lack of venture capital in the early stages of companies. But now we realize that many startups apply to Companisto since the marketing effect is so big when they are presented on this platform. They want to win supporters who will give them honest feedback, which is also valuable for any startup to launch its product. It is interesting that this marketing part is as strong as the financial part for most of the startups.

How does Companisto earn money?

Zwinge: We take a commission of 10 percent from the raised capital.

This story originally appeared on Venturevillage.eu. Copyright 2014