Grow VC Turns Free
Grow VC (or Grow Venture Community) is a community-based platform that helps start-ups acquire the initial funding either through crowd-sourcing or through direct investments from venture capitalists or business angels. As of today, Grow VC scrapped their membership fee and opened their network for free for anyone. Members of the community that would like to invest into listed start-ups can purchase a micro investment membership and invest all the credits they bought. The monthly plans are $20, $50 and $150. No commission is charged from direct investments by professional investors either. Grow VC also recently released an iPhone app to help their members keep updated on the go.
The reason for removing the membership fee: 'Simply because we can and want to', states their newsletter. A generous comment supported, no doubt, by larger benefits of growing the community further. So far 9,200 people singed up to the platform within the last two years. Making it completely free is certainly going to help Grow VC attract new members.
The newsletter a
lso stated that attaching a fee to the service in the first place was more of a test for different price points and market research. Now that they have tested their service, researched the market and received support from the community, Grow VC is entering the next stage of development: expanding their operations further.
The logic of this strategy is counter-intuitive: usually the testing period of a service is free as it might be altered or have slight faults due to its novelty. Subscription fees are introduced later on to reap the benefits of the long building process and testing phase. Grow VC turned the logic upside-down and it seemed to have worked out for them.
Grow VC's other known revenue stream comes from signed partnerships and sponsorships. Under the current model they charge between $1,000-$5,000 for those annually. Perhaps now that the revenue stream from membership fees is gone and the company is working on entering new markets, those subscription plans would also be changed to allow for more sponsors and partners.
Image by matthileo
Can any fellow entrepreneurs or others publicly or privately share any experiences or success stories using GrowVC?
Also interesting would be to know how does it compare against AngelList Europe or Seedsummit.org?
This is Jouko from GrowVC. We have success stories and we published one press release about some cases in February. In early days it has been mainly direct investments (where our role is match making, and these are larger investments). And now also the first investments are happening from the micro-investments side (Community Fund). Now we also simplified the micro-investment model in this version. I would say the whole market is still in its early phase, but development during the last 12 months have been really positive. Not only with interests and activities, but also how regulators and traditional finance institutions start to understand the need for new services and are interested to cooperate.
And how does GrowVC differ from crowdcube.co.uk or venturebonsai.com?
They are in the same business area. There are several typically local actors in this business. We are the most global service and also biggest, if we think the number of people, companies and money. Our biggest market is the US, but Asia is also coming very important. We also develop a lot of global cooperation with finance companies, and locally different kind of players in the startup market. We have also two local networks (GrowVC India and GrowVC China), when those markets have some limitations to be a part of global market. But as the whole the market is still in the early phase, and that's why we must e.g. participate in the legal and regulatory discussions in the US and some other places. We also want to be very open service, e.g. we plan to launch some new things, how other companies can run business on our platform, e.g. their own funding network or professional services to investors.