On this page, you will find comprehensive information about what crowdfunding is, who we recommend it to, and how it works. You can also click through to the campaign launch process. At the bottom of the page, we linked a selection of articles from which you can learn about the valuation of startups and more about crowdfunding.

What is Equity Crowdfunding?

Equity crowdfunding is a regulated, innovative alternative, non-banking, platform-based digital service (fintech) that helps founders, creators to fundraise through an online communication campaign. The crowdfunding campaign (= Campaign) targets the Founder’s network (family, friends, followers aka FFF), its current and prospective clients, and the platform’s community in exchange for issuing transferable securities (shares or convertible loans).

The Crowdfunding Service Provider is a corporation with an activity licensed under the ECSPR regulation, providing regulated services to registered, vetted, and approved Campaign Owners in launching and successfully running campaigns, and to institutional and private investors who are registered, identified, and authenticated on the platform.

Who Can Start a Crowdfunding Campaign?

Equity crowdfunding is suitable for financing both B2B and B2C business models as well as real estate developments. The introduction of lending-based crowdfunding will be the next step for us, allowing for the formation of a credit portfolio.

The success of raising capital through crowdfunding largely depends on the founders of the capital-raising business. Only entrepreneurs who truly want to realize their ideas and are willing to overcome obstacles should consider launching a campaign. Good entrepreneurs, startuppers have immense dedication and believe in their own ability to succeed.

How Does Crowdfunding Work?

Based on international best practices and relevant regulations, we sign a Collaboration and Campaign Launch Agreement with the Prospective Campaign Owner, detailing the tasks of the campaign launch and execution. This is followed by a detailed preliminary audit and evaluation (scoring) process, examining the business’s suitability for investment with the involvement of experts and mentors. During this, Campaign Documents can be prepared.

After successful evaluation and preparation, the Campaign Owner launches the pre-registration, and upon successful pre-registration, the Campaign itself.

After a successful Campaign Closing, business and legal vetting begins, along with examining the fulfillment of investment conditions, followed by the legal process necessary for capital increase; the speed of the Campaign Owner largely determines when they can access the capital, which can only be used for the development goals advertised in the Campaign. Over a period of three years, they must report quarterly, and during this time, investors will be able to trade shares through the platform, and the Campaign Owner may launch another campaign. Read about crowdfunding success stories in the blog post linked below.

What Are the Costs of Launching a Campaign and Raising Capital on TokePortal Platform?

TokePortal works for either a success-based fee of 6.99% of the capital raised in the Campaign, plus so-called Carry fees or the other option is a fixed fee. The costs of audits and capital raising are payable only in case of a successful campaign. The Campaign Owner pays a low fixed fee to TokePortal and their own marketing costs, amounting to about 2000 euros in total fixed expenses.

How to Launch a Campaign?

The steps of the campaign launch process are shown in the following flow chart. With crowdfunding, you can access the needed capital within 12-18 weeks, this can now be up to 5 million euros per year!

Raise the necessary capital from your followers and community! With crowdfunding, you can attract capital within 12-18 weeks, now up to €5.000.000 annually.

Starting from just €2.000!

(This is the amount you should budget for.)

The Campaign Launch Process

The Campaign Launch Process in detail

Submission of Application Online

Submission of the application online, signing of the Non-Disclosure Agreement (click the image).

Registration on the Platform

Registration on the platform, Campaign Owner KYC test and completing the profiles of all team members. After registration, your future campaign manager will organize the introduction.

Personal or Online Introductory Pitch

Personal or online introductory pitch and presentation of the Campaign Launch and Cooperation Agreement (CLA)

Signing of the Campaign Launch and Cooperation Agreement

Scheduling weekly meetings (Until Campaign Closing)

Scheduling Weekly Meetings

Campaign Launch and Cooperation Agreement (CLA) signing the Campaign Owner has the option to either pay an upfront fee or to pay only success-based fees, which include carry fees

Peer Group Analysis

Comparison with international peers (crowdfunding campaigns) for the purpose of validating enterprise value and gathering campaign communication ideas.

Scoring Process

Pre-campaign audit and due diligence process in 6 steps, completion of the scorecard:

  • Legal DD: Criteria check – Incompatibility, “red flags”, necessity of SPV, minimal due diligence.

  • HR: Suitability of leaders

  • Business: Business model, feasibility, and financial plan / pre-money valuation check

  • Online: Checking online presence, reputation.

Assessment of online marketing capabilities, if needed, hiring an agency

IT: For projects with an IT background, a thorough documentation-based check

Preparation of the Campaign Management Plan (CMP)

The Campaign Management Plan (CMP) encompasses marketing communication, FFF mobilization, and planning of investor meetings. Monthly Certificate of Completed Services (COS) constitute the settlement for the collaboration. These include the number of hours incurred after signing the NDA and the contractual as well as pre-agreed ad-hoc costs. The COSs are issued quarterly for 3 years following the Campaign Closing.

Publication of the Pre-Registration Page

Publication of a pre-registration page (must achieve at least 500 views per week), with a dedicated email address. This is the landing page serving as a teaser for the campaign.

Pre-Registration Phase (3-6 Weeks)

During pre-registration, indications of interest must be collected. Consultations with mentors should be conducted and the search for a lead investor should begin.

Finalizing the Campaign Structure

Finalizing campaign structure (whether an SPV is needed or not, financing goals, etc.)

Meeting with Relevant Mentors

Meeting with relevant mentors and potential lead investors

Creation of an SPV

If the legal form of the Campaign Owner is not suitable for the issuance of transferable securities (shares, convertible bonds), then an SPV will be interposed according to the relevant laws.

Marketing Activities According to the Marketing Communications Plan

Proactive, campaign-focused communication and collaboration with TokePortal are key factors to a successful campaign. Marketing activities are conducted in accordance with the CMP (Marketing Communication Plan), including webinars, online tools: including podcasts, social media posts.

Preparation of Campaign Documentation

Preparation of campaign documentation, including the KIIS (the ECSPR equivalent of a Term Sheet) and additional marketing materials (presentation material, one-pager, business plan, campaign video, perks).

Opening a Custodian Account

Opening a Custodian Account with viewing access and approval rights for TokePortal.

Creating a Stripe Account

The Campaign Owner opens their own Stripe account, which is linked to the Campaign Page.

Sharing Facebook Pixel and Google Analytics

Sharing Facebook Pixel and Google Analytics information with TokePortal during the campaign to enable advertising to visitors of each other’s pages.

Approval of the Campaign Page

The Campaign Page is created and uploaded by the Campaign Owner and approved by TokePortal. After this, the Campaign is launched by the Campaign Owner in Closed Phase. The start of the Open Phase also requires approval from TokePortal. The Campaign either expires or is closed by TokePortal but it can be extended twice, with good reason.

Holding Online Investor Meetings

The Campaign Owner holds an Investor Meeting every three weeks on the platform provided by TokePortal, for which they create announcement content and afterwards a summary, which TokePortal sends out in a newsletter. This newsletter, along with the weekly newsletter, converts the most investments.

Non-Public (Closed) Phase for 2-3 Weeks

In the closed phase, only pre-registered users can invest. Early investors are the most valuable in the campaign, thus they receive special discounts at this time. The closed phase can start when the pre-registration landing page reaches a minimum of 500 visitors per week, the pre-registered capital reaches the Minimum Target Capital and consultations have been held with at least 3 mentors, (etc.)

Storytelling

According to international literature, the conversion of investor interest requires a minimum of 7-10 impulses. The Campaign Owner’s storytelling must continuously build momentum. Our mentors can help with this as well.

Signing Contract with the Lead Investor

The Campaign Owner selects their lead investor, whose identity is approved by TokePortal. A tripartite agreement records the rights and obligations. The lead investor acts on behalf of the other investors, representing them in the decision-making process of the Campaign Owner. An open phase can only be initiated in the case of a signed agreement (or verifiably advanced lead investor negotiations).

Closing Transaction (3-6 Weeks)

After a Successful Campaign Closing (ideally earlier), the due diligence process begins, conducted by the lawyer and expert of TokePortal, along with the preparation of Transaction documents required for capital increase and issuing shares. Meanwhile, the disbursement conditions undertaken in the KIIS must also be met, which are verified by the Lead Investor.

This phase – with proper preparation – can also be very quick.

Meanwhile, TokePortal compiles and transfers investor data.

With this, TokePortal has fulfilled its contractual obligations. There is a labor charge of 20 hours before Campaign launch and 10 hours after closing included in the Success Fee, with additional work charged at a rate much lower than market consulting fees, as determined by the Fee Schedule (currently 50 EUR/hour).

Payment of Success Fee

The payment of the Success Fee (6.99% of the capital raised as shown by the Campaign Counter + VAT) is due within 15 days following the Last Day of the Campaign, for which the Campaign Owner should be prepared before the Campaign Closing. (The reason for this deadline is that the fulfillment of the Disbursement Conditions – which are contained in the KIIS and CLA – largely depend on the Campaign Owner.)

Issuance of Shares

After the Court of Registration registers the increase in capital, the lawyer initiates the share issuance procedure. At this point, all conditions for Disbursement are met (on a DVP basis, i.e., delivery versus payment). The Campaign Owner and the Lead Investor, as the share register manager, submit the share register to TokePortal. This completes the Transaction

Post-Campaign Tasks and Activities

After the Disbursement, TokePortal continues to oversee communication with investors for another 3 years, in accordance with its investor protection duties, in the interest of the Campaign Owner. This maintains investor trust and can even facilitate the launch of a subsequent campaign within this time. Two short post-audits are conducted, and the Campaign Owner reports quarterly in a brief newsletter on the fulfillment of the plans promised in the Campaign, and holds an investor meeting