Leaders of Russian crowdfunding and crowdinvesting have united

When a business needs money to expand, it can raise it in a variety of ways. One of the methods that has become popular recently is crowdinvesting , or collective investment.
An entrepreneur can receive money from several investors, and investors, in turn, can invest small amounts in different projects, reducing their risks. From this article you will learn:

1. What is crowdinvesting in simple words?
2. Pros and cons of crowdinvesting
3. Crowdinvesting schemes
4. How much can you earn from crowdinvesting?
5. Risks of crowdinvesting
6. Crowdinvesting sites in Russia
7. Conclusion

What is crowdinvesting in simple words?

Crowdinvesting is a form of collective investment, when several investors finance one enterprise. When the financed company makes a profit, it distributes it to those who invested in it.

Collective investments are made with the help of intermediaries - crowdinvesting platforms. These platforms provide consulting and financial services, selecting worthy projects and collecting funds to finance them. They are also subsequently responsible for paying rewards to investors.

In general, crowdinvesting works like this:

• a businessman contacts a crowdinvesting site and submits the necessary documents for analysis;
• the project is placed on the site and presented to investors;
• investors analyze the project and invest money in it;
• if the total minimum amount is reached, then it is withdrawn from the crowdinvesting site account and transferred (minus the commission) to the author of the project;
• a businessman uses funds to develop his business;
• When making a profit, the businessman settles with the investor.

The form of remuneration can be any. For example, this is the return of a certain amount after some time, monthly or quarterly payments (royalties), a finished product, or even a share in the company.

Taxation of crowdinvesting is standard. The investor needs to pay 13% (personal income tax) on the profit received. Funds contributed to the company and spent on making investments (for example, commissions) can be written off as expenses, thereby reducing the tax base.

Crowdinvesting sites are not tax agents, so the investor will need to calculate the tax amount himself, submit an application and pay the money to the budget.

Leaders of Russian crowdfunding and crowdinvesting have united

The crowdfunding platform Planeta.ru and the crowdinvesting platform StartTrack have teamed up to develop a mechanism for continuously raising funding for startups. This is stated in a press release received by the editors of Lenta.ru.

The CEOs of the sites signed an agreement on joint promotion of services to attract private investment. The companies plan to offer partner services to their own clients. For example, when receiving an application from a startup to create a project or invest, site moderators will evaluate the business and its financial needs and determine what is more suitable for it - crowdfunding or crowdinvesting. It is also possible that the company first goes through the crowdfunding stage on Planeta.ru, and then seeks investment on StartTrack.

The collective finance industry is divided into several segments according to the method of raising funds: classic reward-crowdfunding (raising funds in exchange for rewards as on Planeta.ru) and crowdinvesting (financing through the sale of shares and shares or under a loan agreement).

“Investors are keeping an eye on crowdfunding campaigns, especially in the IT sector. For investors, crowdfunding is a test of the attractiveness and payback of an idea (if we are talking about a business project). You can invest in the project after the crowd campaign is completed. Crowdfunding helps an investor and a project find each other - for example, on Planeta.ru this happened with the developers of Animo, a smart animal feeder, director Viktor Ginzburg, and entrepreneurs from the LavkaLavka farmer cooperative,” explained Fyodor Murachkovsky, CEO and co-founder of Planeta.ru.

According to him, many project authors who started a business with crowdfunding on the site have grown into operating companies and are now raising money for further development. StartTrack, in turn, will be able to provide the best companies with a virtually unlimited amount of investment in the form of private loans, the sale of shares or shares, and will also provide other resources for growth - a development strategy, financial model, employees and PR.

“Banks are reducing their lending portfolio to small and medium-sized businesses, and the smallest companies and startups can only count on an extremely limited number of funds and grants. Therefore, entrepreneurs turn to public investment. There is no ideological difference between crowdfunding and crowdinvesting, we simply work with companies at different stages of development - that is, a year after crowdfunding on Planeta.ru, the project may well grow and apply to StartTrack,” noted StartTrack CEO Konstantin Shabalin.

Pros and cons of crowdinvesting

For investors, this method of investing has many advantages:

• practically unlimited profit (some startups bring up to 100% per annum);
• you can distribute funds between several projects, reducing risks;
• low entry threshold - on some sites investments start from literally 1,000 rubles (but mostly from 50,000);
• there is no bureaucracy, all investments are made online and using an electronic contract;
• You can invest through different payment systems and in different currencies.

But there are also significant disadvantages that need to be taken into account:

• no one guarantees profitability, startups may not justify themselves;
• the risk of fraud or bankruptcy of the crowdinvesting site itself is added;
• there is no transparency of investments, in particular, the investor does not have direct control over the expenditure of raised funds;
• large commissions that have to be paid to intermediaries (crowdinvesting sites);
• In general, companies that raise money through crowdinvesting have a low credit rating.

Thus, crowdinvesting, on the one hand, is fast, simple and profitable, but on the other hand, this speed and simplicity is fraught with additional risks that you will have to put up with.

Crowdinvesting schemes

There are several most popular crowdinvesting schemes that are implemented on sites.

1. The investor can choose the company in which to invest money . The platform simply offers several options that the investor can analyze. You can invest in several projects at once.
2. The platform selects projects, forms pools from them, and investor funds are distributed across all pools at once . The profitability of projects is calculated together and remuneration to investors is paid based on the results of refunds from all borrowers (except for those who have defaulted).
3. The platform creates pools of projects, and the investor himself can choose which pools he will invest in. For example, if he is risk-averse, he can choose IT companies with high growth potential; if the investor’s appetite is less, then “classic” industrial companies.

In addition, sometimes crowdinvesting platforms form their own unique schemes - this area is still in its infancy, and there is a lot of room for experimentation.

Small Business Investments

Crowdinvesting is a modern form of investing in startups, simplifying the process of interaction between businessmen and investors.
Article navigation

• What is crowdinvesting
• Who is involved in the process
• Types of crowdinvesting
• Advantages and disadvantages
• Tips for investors
• Crowdinvesting in Russia and the world
• Collective investment platforms
• In the world
• In Russia
• Let's sum it up

Many capital owners are looking for passive income options. One of the most progressive is to invest in interesting startups. Young companies need financial investments to help develop their business. By helping beginners, an investor can count on good profits in the future. In this article we have prepared a guide to crowdinvesting. What it is? How does it differ from crowdfunding and what are its prospects? You will also learn about popular crowdinvesting platforms in Russia.

How much can you earn from crowdinvesting?

The profitability of a single project within the framework of crowdinvesting can reach 100%, but in reality the profits are much more modest. Most often, startups receive funding from investors based on a loan agreement with a fixed interest rate. Greater returns can be obtained if you participate in the company's capital directly by purchasing a share.

Profitability also depends on the crowdinvesting scheme. If an investor invests in a specific company, then the profit is negotiated and can be almost anything. If an investor invests in a pool of companies, then the profitability is determined as the average of all projects minus non-returns.

Thus, the Alfa Stream platform promises a profitability of 17-27% per year. In reality, as investors themselves note, it turns out to be approximately 7-15%, depending on the selected pool. And this does not take into account tax, which takes away some of the profit.

StartTrack, which offers investments mainly in innovative projects, promises profits of up to 25% per year. Similar site SIMEX – up to 65%.

The crowdinvesting platform AtomInvest, created under the auspices of Rosatom, offers investments in real businesses and offers returns of up to 30%. But Penenza, which specializes in financing companies participating in bidding, promises profits of 20% per year without specifying an upper threshold.

Crowdinvesting and its types

Crowdinvesting is the same collective investment in real estate. But in this case, the investor, as expected, receives a financial reward. Based on the nature of profit acquisition, crowd technologies in real estate are divided into royalties, public lending and equity crowdfunding.

1. Royalty. The lender is given a share of the profits of the launched business. This type is used in the gaming, music and film industries.
2. Public lending (crowdlending). Lending on an online platform by a private person to another person or company. The giver is returned the amount at a higher interest rate than the bank can offer. The borrower receives the amount at a lower rate than the bank. In addition, this process is completed easier and faster.
3. Equity crowdfunding. The investor becomes a co-owner of the financed project with subsequent rights to participate in management and receive income.

Risks of crowdinvesting

In general, crowdinvesting is considered a risky investment for a number of reasons:

• The company raising funds may turn out to be ineffective and go bankrupt . In this case, you will be able to get your investment back only through the court in order of priority after the formation of a pool of creditors. What kind of crowdinvestor will be in line will depend on the type of agreement.
• The company may be a scam. Unfortunately, this also happens. An entrepreneur can receive financing for a project that, in fact, does not exist. Naturally, investors will not receive anything in the end. Now the number of such fraudulent projects is rapidly decreasing, especially on crowdinvesting sites, since they select actually operating enterprises and control the return of funds. But if you invest in a project directly, bypassing intermediaries, you may encounter scammers.

  

• A crowdinvesting platform may go bankrupt or turn out to be a scam . Now this risk is becoming less likely, since the so-called “law on crowdinvesting” comes into force in 2021. But outright HYIPs and fraudulent sites operating outside the Russian legal framework may still appear. Therefore, in order to avoid such a risk and not invest in a pyramid, where instead of projects there are just pretty pictures, it is worth investing in startups through reputable and large platforms.
• Risk of loss of profitability . It arises when investing in pools of companies. Crowdinvesting platforms themselves form pools of projects, and can include both strong companies and those with low creditworthiness in the set. As a result, due to a series of defaults, the total profitability of the pool decreases, and the investor receives only 15% instead of the promised conditional 25% per annum. If you select projects yourself, you can increase your overall profitability, but here you will have to rely solely on your knowledge and your intuition.
• Risk of assets being frozen. The company that received financing may not go into outright default; in the event of financial difficulties, it may suspend interest payments. In this case, the investment will be “frozen”. The investor may be required to make additional infusions into the same project - or agree to debt restructuring with a reduction in the interest rate, which will negatively affect profitability.

  

To reduce these risks, it is necessary to diversify investments by distributing funds between different sites and different projects.

Crowdinvesting without the help of platforms

Some companies prefer to raise funds from private investors through their website, blog or office.

A company for direct investment must be selected with special care. The Internet is full of fraudulent offers. This type of investment should only be undertaken by experienced investors.

An example would be two and Dodo Pizza.

The first calls its method of attracting clients nothing less than multi-level crowdfunding. Its essence is that investors receive part of the profits of the people they invite.

The network is full of conflicting reviews about the SkyWay company; many consider it a financial pyramid and say that “multi-level crowdfunding” is just a fancy name.

The second one is actually active. The founder of the company deliberately refused to invest from venture funds and opted for crowdinvesting. Anyone can invest money in the company.

The founder of Dodo Pizza tells more about how to do this in a presentation for investors:

Crowdinvesting sites in Russia

In the West, crowdinvesting has long become a popular means of alternative financing, but in Russia this area is still developing.

From January 1, 2021, the “Crowdinvesting Law” comes into force, which defines the rules of the game in the crowdfunding and crowdinvesting market. Now it is not enough for platforms to raise funds to simply comply with the law; they have added requirements:

• have an authorized capital of 5 million rubles;
• obtain a license from the regulator (Central Bank);
• disclose information about commissions;
• publish reports.

After passing the verification, the platform will be included in the special register of the Central Bank.

The maximum investment amount is also limited. Unqualified investors will not be able to spend more than 600 thousand rubles on such sites. There are no such restrictions for qualified investors.

The following crowdinvesting platforms are currently operating in Russia:

1. Alpha Stream . One of the pioneers of crowdinvesting in Russia. The platform allows investors to invest in a pool of projects (from 10 to 20 small and micro-business companies). The promised profitability is at the level of 17.5-27.3%. The downside is that investors cannot choose the investment pool themselves, and there is also a waiting list for investment if Alfa-Bank has not currently selected the required number of projects for financing.
2. StartTrack. The platform was created in 2013 with the support of the Internet Initiatives Development Fund. It offers to invest mainly in companies in the high-tech and real sectors of the economy (industry, mechanical engineering, development, agriculture, etc.). It is the leader of crowdinvesting in Russia - almost 40% of all projects receive financing through it. The declared profitability is up to 25% per annum depending on the project, the minimum investment amount is from 100 thousand rubles.
3. Simex . On the platform, you can finance fintech projects, including those built on blockchain technologies. The site positions its work as the sale of investment shares in various projects, for which dividends are paid. Investment size – from 1 dollar, profitability – 24-65% of the net profit of the project.
4. Penenza . The platform was created specifically to finance large companies working under government contracts. Funds are raised mainly to close cash gaps and replenish working capital, so investments are generally secured. Profitability – from 20% per annum.
5. City of Money . One of the oldest crowdinvesting platforms in Russia. Provides communication between investors and entrepreneurs, then they directly enter into a financing agreement. The platform provides electronic exchange of documents and funds. The promised return is more than 20% per year.
6. AtomInvest . A new site created with the support of Rosatom. Here you can finance projects in the real sector of the economy, mainly in the industrial sector. The minimum investment amount is from 50 thousand rubles, and the declared profitability is up to 30% per annum.
7. Ozon.Invest . The platform was created with the participation of the online retailer Ozon.ru. Here you can invest in companies that supply goods to online stores. The investment amount is from 10 thousand rubles, the yield is up to 18% per year.

Crowdinvesting platforms

The investor can invest in both Russian and foreign companies. Each of them has pros and cons, the choice is a personal matter for everyone. Let's look at several crowdinvesting platforms.

Foreign sites

Crowdinvesting platforms exist all over the world. Most of the companies are located in the USA and Europe. Below is an infographic showing the number of platforms by country and their development potential.

It is not possible to consider all sites. Let's take a look at industry leaders.

Venue 1. Funding Circle

English company. Is a world leader in crowdinvesting. Among its investors are multinational companies and even the governments of some countries.

The average yield is 6.2% per annum. For European organizations this is a very high figure, it exceeds the return on deposits by 3 times (European banks give about 2% per year).

Peculiarities:

• works only with ready-made businesses;
• loans are not available to individuals;
• minimum investment amount is £20;
• the maximum limit is not limited;
• Commission for the investor is 1%.

Venue 2. Republic

Popular French service. Most of the projects operate on the principle of equity crowdfunding.

Platform features:

• The minimum deposit amount is $25;
• maximum - $107,000;
• cooperates only with accredited investors;
• allows you to invest in cryptocurrency.

The platform provides an opportunity to become a real crypto investor. The user gets access to IEO, private sales, and purchase of tokens.

You may be wondering: what are ICOs and IEOs? How to invest in ICO?

Crowdinvesting sites in Russia

Site 1. StartTrack

The largest platform in Russia has proven its reliability and earned credibility among investors. Provides two options for earning money: enter into a loan agreement (yield of about 25% per annum) and purchase a share of the company’s assets.

Features of the site:

• the minimum amount for investment is 100,000 rubles;
• commission - 5% of the invested amount;
• works only with accredited investors.

All transactions can be completed online. The procedure takes no more than five minutes.

Site 2. City of Money

The company specializes in small business lending. Most of the enterprises presented on the site operate in the field of trade and services. Employees claim that all entrepreneurs have an unblemished credit history and a solid annual income.

Platform features:

• the minimum amount for investment is 50,000 rubles;
• investment period - from 1 to 3 years;
• commission for services - 2%;
• maximum yield - 30% per annum.

The platform is perfect for beginners, as it works with users without accreditation and allows you to start with a small amount.

Venue 3. Penenza

The company is a member of the working group on crowdinvesting at the Central Bank of the Russian Federation. Specializes in issuing short-term loans at high interest rates.

Platform features:

• the minimum amount for investment is 5,000 rubles;
• minimum investment period - 2 months;
• the average income level is 20% per annum.

In addition to the above, the site has its own department for working with accounts receivable. This allows you to increase the return rate to 95.4%.

Venue 4. Venture Club

It is a venture fund available to a limited number of clients. Slightly different from classic crowdinvesting. To gain access to investments, you need to make a one-time contribution of 100,000 rubles.

Features of the project:

• the minimum amount for investment is 10,000 rubles;
• There is no site commission.

An investor has the opportunity to make a profit in two ways: by purchasing a share of the enterprise or by issuing a loan.