 | This article contains content that is written like an advertisement .(November 2018) |
| Industry | Investing |
|---|---|
| Founded | 2014 |
| Founder | Marc Oyamburu |
| Headquarters | Mexico City , Mexico |
| Website | playbusiness |
Play Business is the first crowdfunding site for start ups in Mexico, with a business model distinct from other crowdfunding sites. [1] [2] It offers equity in the start up instead of direct compensation for investors. [3]
Started in 2014, the site has several co-founders, including Joan Segura (currently the general director), Fernanda de Velasco and Marc Oyamburu. Oyamburu's and Segura's experience with video games is behind the idea of the site, both involved in play, critiquing and creating game worlds. [1] [3] [4] As a college student, Oyamburu came across the idea of gamification of real world activities, which is behind the name Play Business. [3] In addition, Oyamburu is a lawyer and economist, which allowed him to develop the idea despite being told it could not be done for legal or financial reasons. [5] The business started with an initial investment of 200,000 pesos, most of which went into paying for servers and the development of the site. The website officially went on-line in March 2015, while still using the laundry room of Joan Segura's parents' house. The company grew 700% in its first year and 300% and 100% in the following years. More recently, the company has been able to rent larger space to allow for offices and is now located in the Condesa neighborhood of Mexico City. [5]
As of April 2018, the site has 50,000 registered users and has provided more than 115 million pesos to support projects of more than 85 start ups. [5] Its first client was Briko Robotics, with a goal of 645,000 pesos and even financed itself in part through its own site. [1] [2] Another success story for the site is Tumbiko, a jewelry enterprise which now employs about 1,000 people.
In February 2015, the platform reached its beta version. [4] After the election of President Trump at the end of 2016, the site saw a sudden increase in participation. In thirteen days, projects garnered six million pesos, breaking a record. [1]
The platform has alliances with organizations which provide investment and other support to start ups. [1] In October 2016, Startup Studio Monterrey signed a contract to collaborate with Play Business. [6] Playbook management has stated that it has not grown to the level of other online funding site due to lack of funding. [5]
The business model of the company was created to help Mexican entrepreneurs find new and more modern ways to finance start ups, as well as provide alternatives to investing abroad. The company believes that a weak peso against the dollar is good for them as it makes U.S. investments less attractive, leading investors to look for alternatives. [1] [2]
Its funding method is different from Kickstarter and Indiegogo, and the company claims it is the only one of its type in the world. [3] [4] The model is called crowd equity rather than crowdfunding. [2] [7] Instead of offering products or souvenirs to contributors, entrepreneurs, investors and Play Business enter into a contract, with investors offered equity and say in the running of the start up. [2] [3] [7] This percentage is between nine and eleven percent of the total value of the company. [7]
It is an integral model, broken down into steps. Entrepreneurs are called “makers” and investors “players.” [3] [7] While Play Business welcomes projects of all types, it selects only those it believes address a market need with a viable business plan and growth potential. [1] Only about ten percent of applying start ups reach the platform. [8] Prospective makers must attend a boot camp to develop their idea and learn about enterprise valuation, investment tools, and how to offer players a role. Makers do not receive money immediately, but rather in stages as their projects reach milestones. In this way, players can decide at any time to withdraw from the “game,” limiting their risk. [2] [3] [7]
Joan Segura describes the business as a "scale up" as it emphasizes the execution of the project in stages. For example, instead of having makers write a business plan on paper, they get the new businesses out to recruit investors. [5]
The idea is that if everyone “plays well” (jugar bien in Spanish), everyone wins. [3] The goal of players is to increase the value of their investment and the goal of the makers is to keep the players. [4] If a players retires from the “game,” others can buy his/her share. [3] [4]
Minimum investment for players is 100 pesos per month, but they can invest up to about 500,000 pesos. [1] [3] If a contributor invests four percent or more of the initial investment, s/he becomes an associate of the enterprise and is able to further invest with or without Play Business. [1] Makers report to players every month as well as a trimester report. [4]
Play Business charges 5% of the investment, but only if the business reaches its goal amount. [1] [4]
Play Business estimates that about 30% of a maker's initial investment from the platform comes from friends and family. [1]
References
A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses, including self-employment and businesses that do not intend to go public, startups are new businesses that intend to grow large beyond the solo founder. At the beginning, startups face high uncertainty and have high rates of failure, but a minority of them do go on to become successful and influential.
Venture capital is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth. Venture capital firms or funds invest in these early-stage companies in exchange for equity, or an ownership stake. Venture capitalists take on the risk of financing risky start-ups in the hopes that some of the companies they support will become successful. Because startups face high uncertainty, VC investments have high rates of failure. The start-ups are usually based on an innovative technology or business model and they are usually from high technology industries, such as information technology (IT), clean technology or biotechnology.
Seed money, sometimes known as seed funding or seed capital, is a form of securities offering in which an investor invests capital in a startup company in exchange for an equity stake or convertible note stake in the company. The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own, or until it is ready for further investments. Seed money options include friends and family funding, seed venture capital funds, angel funding, and crowdfunding.
Indiegogo is an American crowdfunding website founded in 2008 by Danae Ringelmann, Slava Rubin, and Eric Schell. Its headquarters are in San Francisco, California. The site is one of the first sites to offer crowd funding. Indiegogo allows people to solicit funds for an idea, charity, or start-up business. Indiegogo charges a 5% fee on contributions. This charge is in addition to Stripe credit card processing charges of 3% + $0.30 per transaction. Fifteen million people visit the site each month.
Crowdfunding is a process in which individuals or groups pool money and other resources to fund projects initiated by other people or organizations "without standard financial intermediaries." Crowdfunded projects may include creative works, products, nonprofit organizations, supporting entrepreneurship, businesses, or donations for a specific purpose. Crowdfunding usually takes place via an online portal that handles the financial transactions involved and may also provide services such as media hosting, social networking, and facilitating contact with contributors. It has increased since the passage of the Jumpstart Our Business Startups (JOBS) Act.
EarlyShares is an online platform for real estate fundraising and investing. It was founded in 2011 and is headquartered in Miami, Florida.
Seedrs is an online equity crowdfunding company, headquartered in East London's Tech City, founded in 2009 and launched by Jeff Lynn and Carlos Silva in 2012. Since 2022 it has been a subsidiary of American crowdfunding company Republic.
SeedUps is an equity crowdfunding platform for seed investment to launch and focuses on startup companies. It was founded by Michael Faulkner and Gavin Gallagher in 2010 and is aimed at tech startups in the USA, Ireland and the UK. Since launch over 2200 tech businesses have registered. It is only available to accredited or sophisticated investors. The platform is headquartered in Republic of Ireland with offices in the UK, US and Canada. Each funding project on SeedUps lasts for the same duration, namely 180 days.
MicroVentures is an equity crowdfunding website offering investments in early stage companies. MicroVentures connects accredited investors with startups, businesses and services looking to raise funds or participate in select secondary market opportunities. It is the only major equity crowdfunding site that is a broker-dealer registered by the Financial Industry Regulatory Authority (FINRA) and the first to take a portfolio company to a successful exit. As of October 2013, MicroVentures had raised $20 million, spread among 45 companies including Twitter, Facebook, and Yelp.
Crowdcube is a British investment crowdfunding platform, established by Darren Westlake and Luke Lang in 2011.
FundedByMe is a crowdfunding platform based in Stockholm, Sweden started by Daniel Daboczy, Arno Smit and Eric Weber. The company is active in Scandinavia with joint ventures in Finland, Poland, Malaysia, The Netherlands, Singapore and The United Arab Emirates. FundedByMe's native language is English, but users can list their project in any supported language. The company was founded in March 2011 by Arno Smit and Daniel Daboczy. In September 2012, the company decided to focus their core business on equity crowdfunding instead of its original approach with donation and loan based crowdfunding portal.
Companisto is an international equity-based crowdfunding website. It was founded by the lawyers David Rhotert and Tamo Zwinge in June 2012, in Berlin. Companisto allows investors to invest in startups. In return, they become shareholders and are entitled to a share of any profits, as well as potentially benefiting from an exit. Companisto has over 130.000 investors from 92 countries. It is Germany's largest network for investments in start-ups and growth companies.
Angels Den is the Europe's first and largest online investment platform that connects businesses with angel investors. It was founded in 2013 and is authorised by the Financial Conduct Authority (FCA).
Return on Change (RoC) is an equity crowdfunding platform that connects investors with innovative and socially conscious startups. Return on Change works with startups that operate in five sectors, each of which touches on sustainability in some way: cleantech, edtech, life sciences, social enterprises, and technology. An online equity crowdsourcing platform, RoC helps socially conscious ventures raise capital.
SeedInvest is an equity crowdfunding platform that connects startups with investors online. The company was founded in 2012 and launched in 2013. SeedInvest has focused on building liquidity in the platform by attracting high-net-worth individuals, family offices and venture capital firms. SeedInvest screens and vets deals before allowing them to take advantage of the JOBS Act exemption permitting General Solicitation. In September 2014 the company launched a partnership with Angel Investing website Gust. In October 2018, SeedInvest was acquired by peer-to-peer payment company Circle Internet Financial Ltd.
Onevest, a New York–based investment crowdfunding site for startups that was acquired by Business Rockstars in April 2018, allowed entrepreneurs to raise capital from accredited investors. In July 2014, startups launching on Onevest had collectively raised over $66 million.
Equity crowdfunding is the online offering of private company securities to a group of people for investment and therefore it is a part of the capital markets. Because equity crowdfunding involves investment into a commercial enterprise, it is often subject to securities and financial regulation. Equity crowdfunding is also referred to as crowdinvesting, investment crowdfunding, or crowd equity.
VentureCrowd is an Australian multi asset class crowdfunding platform, headquartered in Sydney, including equity crowdfunding, property crowdfunding and debt-based crowdfunding. VentureCrowd completed the largest Australian equity crowdfunding raise, $4.2 million, for taxi-booking and payment software company Ingogo in May 2015. This deal is ranked 8th on the List of highest funded equity crowdfunding projects. This deal is ranked 8th on the List of highest funded equity crowdfunding projects. In June 2016, VentureCrowd raised more than $900,000 for a Western Sydney residential project - a 35-lot development in Riverstone East, in partnership with the property developer ClearState. In August 2016, a second project raised $1,700,000 for a 44-lot development project in Austral.
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, over US$34 billion was raised worldwide by crowdfunding.
Beesfund is a Polish equity crowdfunding platform based in Warsaw, Poland. Managed by its eponymous company founded in 2012 by entrepreneur Arkadiusz Regiec, it is one of the first crowdfunding platforms in Poland, and Central and Eastern Europe. As of May 2020, 74 public offerings (issuances) were carried out on the platform, for a total amount of PLN 47M, collected by over 48,000 registered investors.