In today’s article, we interview Zoe Adamovicz, CEO and co-founder of Neufund to see how a blockchain-enabled fundraising platform works. The startup was founded in 2016 and its value proposition democratizes access to capital for innovators and entrepreneurs making it easy, secure, and accessible for everyone to invest.
Crowdfunding has become a popular way to fund startups in recent years due to a need that both startups and investors had. Many startup founders turned to crowdfunding platforms to share their brand story and to cultivate a loyal follow-up and receive support from potential investors. Angel investors, VCs, and more looked at platforms as an easy way to get access to a startup that needed an investment without having to look for it.
The blockchain fundraising approach has a range of benefits over conventional methods, but there has been uncertainty about legislation and compliance with blockchain financing since its introduction. This is partially solved by the implementation of new forms of blockchain financing solutions such as ICOs, STOs, or IEOs. This type of fundraising is helping the management and distribution of funds securely and transparently, and many fundraising platforms either for startups or NGOs function like this and they have gained success in the last few years.
By interviewing Zoe we want to have possible answers to a few questions listed below that will make us realize:
- What makes Neufund different from other fundraising platforms?
- How does their platform work and why this approach has more benefits than other conventional methods.
How did you come up with the idea? What is the problem that you are solving and for what type of clients?
Participating in the investment ecosystem from both the fundraising and investing side, we’ve experienced how hard it can be to find partners and close the deal. Fundraising demands enormous amounts of time, capital, and resources, as each investor has to be handled individually. IPOs are only available to companies with capital requirements of €100M or more. Private companies are limited by size, geography, and capital requirements, and many just don’t fit traditional fundraising “boxes”. For investors, private markets are costly and inaccessible. Access to unlisted equity is restricted to accredited investors or those investing €100K or sometimes even €200K.
At the same time, we’d been watching the development of blockchain closely and realized it was a pivotal moment: we could build a legally-binding environment for safe investments. Finally, we had a chance to solve the problems we’ve been experiencing for years.
How does your solution work?
Neufund is a dual-sided platform that offers investment opportunities to interested investors and opportunities to raise capital for companies. Investors and companies can register on the platform using user-friendly UI. The investment and fundraising process happens fully on the platform saving time and resources.
Greyp bikes were the first-ever retail offering announced and hosted on Neufund. Together we made history. The campaign demonstrated the power of turning a community into shareholders, showcased a way for companies to raise capital outside of traditional startup hubs, and proved that blockchain makes the future of finance possible today. Altogether the campaign lasted 45 days and collected €1.4M in funding from over 1000 investors from 34 countries around the world.
How is it better than other solutions? What is the innovation that you bring?
Neufund enables flexible fundraising: as an entrepreneur, you can be a startup or established business ready to grow; you can be a fundraising novice or curious veteran. Thanks to our platform technology entrepreneurs can address venture capital, institutional and individual investors, and prepare their campaigns, private or public, easily and quickly, in mostly automated ways. It’s borderless: you can raise capital from anywhere, and from investors anywhere. As the platform also supposes publishing a prospectus we don’t have cap limitations like traditional crowdfunding platforms do.
We also lower the barriers to entry in the world of investments: you don’t have to be an accredited or qualified investor; you can be an individual, institution, or venture capital firm, committing €10 or €10M.
How was the startup evolution so far?
We’re happy to have had a good track so far with the following notable facts:
- 13 months after Neufund was founded, the first campaign on the platform was announced. Neufund’s ICBM attracted over 1000 investors in 2017.
- Neufund conducted the world’s first fully compliant public blockchain offering in 2018;
- The world’s first blockchain IPO on the platform was closed in 2019, with Greyp Bikes raising €1,4M. It attracted a total of 1017 investors from 34 countries, with a minimum investment of just €100.
- To date, investors, through the platform, have committed almost €20M.
- At the end of 2020 we announced €4M of funding, which will be used to obtain a financial license and accelerate the development of new products, and for notable hiring (link).
How do you see it grow in the next 2-3 years?
We aim to prioritize and work closer with impact-driven businesses that are or could be, profitable while solving some of the world’s urgent problems and contributing to sustainable development. The market is still obsessed with unicorns, but many investors are looking for sustainable and impact-driven companies, and we are here to help them connect.
What do you think the landscape of fundraising will look like 10 years from now?
We believe that the future belongs to a decentralized economy. In practical terms that means transparent rules that are known to all participants, and equal access to information and investment opportunities, no matter your location, background, and wealth status. Our top priority is to give everyone equal access to investment opportunities and make investing easy and safe.
In conclusion, Neufund is an example of a blockchain-based fundraising platform that offers a different approach and that automatizes and efficiencies the fundraising process both for startups and investors.
We should look towards Neufund as a use case for their business model and approach towards their users and see how we can apply the blockchain solutions towards our users. By acknowledging the way Neufund works and by understanding the processes they have we can see how this solution is an alternative to accessing investment opportunities in an easy way.
B-hub for Europe is a Startup Europe supported project dedicated to connecting blockchain innovation ecosystems. Neufund is a winner of B-hub’s 2020 open call – discover all startups accelerated and apply to our next call for acceleration!