Legal Challenges Related To Crowdfunding, Volume 1
Editor's note: This is a guest post by Antti Hemmilä from Attorneys at law Borenius.
While crowdfunding is not a new concept, it is getting a lot of media attention nowadays. Crowdfunding is evolving and new crowdfunding platforms provide an excellent tool for financing different projects, whether these are art projects, game or hardware/device development or even equity financing. Yet the use of these new platforms and practices needs to comply with the existing regulation, which sometimes causes conflict. This first guest blog looks into the legal issues related to using donation/rewards-based crowdfunding platforms mainly from Finnish perspective, and the second blog addresses the use of equity-based crowdfunding platforms.
Lessons learned - How to plan your (non-equity) crowdfunding campaign to comply with Finnish law
American Express Hops On Board For iZettle's Series B Funding
iZettle announced on their website that American Express coming on board as an investor. This makes it the second credit card company to participate in the Series B funding round along with Mastercard. We covered the bulk of their series B funding last June, which included investments from Greylock Partners, Northzone, SEB Private Equity, as well as their series A investors Index Ventures and Creandum.
In the past, American Express charged nearly 1% more per transaction than iZettle's other supported credit card companies. But now in Finland, they charge a flat 2.75% for all supported cards.
AXCO-Motors Powers The Wind And Energy Industries With Their Custom Solutions
Editorial note: This post is part of a series of posts in collaboration with Lappeenranta University of Technology to promote their expertise and tools in commercialising research based innovations.
In our series with Lappeenranta University of Technology, we look at how the university has helped researchers and entrepreneurs spinoff research based innovation into startups. While these innovations are not exactly in the digital space, it shows that there are tremendous opportunities elsewhere as well. AXCO-Motors is one of these companies, building tailor-made generators and motors for different industries, but mostly focusing on the wind and hydro energy industries.
Tictail Raises €1.2 Million For DIY E-Commerce Platform
Tictail, the "Tumblr of e-commerce" has grabbed a solid €1.2 million seed capital in a round led by Balderton Capital and Klaus Hommel. Members of Tictail's advisory board, including Spotify CPO Gustav Söderström and Tumblr COO Fredrik Nylander, have also made personal investments in the company.
We covered the startup's launch last May, and since then they have added 5000 independent stores to their e-commerce platform, with the most traction in Sweden, Germany, Denmark, France and the UK. Rather than going with a one-giant-store approach, like Etsy, Tictail allows you to create your own online store, rather than having your products show up right next to all of your competitors' products.
Good Times Are Here In Espoo - Free Co-Working Space Opened By Tecnotree
Good times are here in Espoo. Tecnotree, a provider of IT solutions for Telecom operators, have launched a co-working space next to their HQ in Suomenoja, Espoo with very reasonable terms for startups. Teams of three are given rent-free space for a year, and additional space can be rented at €100/person/month.
On top of that, the space also offers a demo area, meeting rooms, a gym, and a sauna. Teams still need to pay something for internet & cleaning, but you can't complain about putting a free roof over your startup. The coworking space is called Quja, and their Facebook feed swears there is no catch for the free space.
Arctic15 Recap
Forgive us for the pause in news publishing this week, but we had a good excuse. On Wednesday and Thursday Helsinki played host to the Arctic15 - Northern Europe's gathering of entrepreneurs, investors, and the startup ecosystem. It was great to see so many people from across the region together, and we kept busy with two days of talks and panel discussions from an awesome lineup of speakers from the region, Europe, and Silicon Valley.
On top of that, we had the Arctic15 startup competition, where our conference gets it's name. Fifteen startups came together to pitch Our judges - Lars Buch from Startup Bootcamp, Elise Sass from Startup Wiseguys, Taneli Tikka of several Fininish startups - were given the difficult task of selecting the winning startup from the lineup.
Holvi's Banking Service Used To Provide Open Budgets For Political Campaigners
In addition to banking, Holvi, a new type of banking service, is bringing clarity to politics. The Finnish service allows organizations to have their own account for storing, payment, and receiving of money, but also provides the option to make their books public. For political organizations and charities - which rely on public trust - this can inspire confidence that money is being managed correctly.
In Finland the local government election cycle is in full swing at the moment, and currently around 30 candidates are using the service to track and execute income and expenditures. Of them, only a few have made their books public, but it's a sign of a new trend. There's a growing open government movement in Finland, which includes avoinministeriö.fi among other websites where the public can vote on issues they would like the national government to consider. If 50,000 signatures are collected, the issue must be brought up in Parliament for consideration.
Infogr.am Releases Update With More Ways To Visualize Your Data
If I have a hot dataset and want to visualize it for you - my dear readers - your eyes would hurt. I would fire up Microsoft Excel, plug in some numbers, and spit out a the same light-blue 3D pie chart that you've seen 1000 times over. If I wanted to get super creative I would use... Microsoft Paint? Can you even download that for a Mac? Thankfully, Latvia-based Infogr.am exists, and is continuing to provide new ways for anyone to create nice looking and interactive infographics.
Late last night Infogr.am announced a new update to their service. They've re-built the charting engine with much better mathematics and functionality, which before felt a little buggy. They've also updated their infographics library, so you can discover more content and see how others have used the service.
Baring Vostok Launches New $1.5 Billion Fund
Baring Vostok Capital Partners announced last week that it has put together a new $1.5 billion private equity fund – Baring Vostok Private Equity Fund V, or BVPEF V – which now stands as the largest in Russia’s private equity business.
The new fund is generally expected to follow in the strategic footsteps of its four predecessors, prioritizing investments for well-established leaders in four areas: IT, including Internet, software development, media and telecommunications; financial services; FMCG and consumer services; and natural resources.
According to Michael Calvey, founder and senior partner at Baring Vostok Capital Partners (BVCP), the new fund will develop a portfolio of 10-15 assets maximum; its focus will be on midcaps with potential for explosive growth, supporting business expansion or consolidation (or a corporate takeover).
Reminder: Stardoll Is Huge
You forget how big Stardoll is, because if you're reading this you're probably not in their 7-17 year-old girl demographic. And if you do know about them, you may forget about them because they seem almost like an institution by now - the service has been around in one form or another since 2004. This Saturday, Stardoll passed the 200 Million member mark, a huge milestone for the company. To give you some idea of growth, Stardoll hit the 150 million mark in late January of this year.
Stardoll is a an online paper doll community where you can create your own dolls or build off of celebrity-branded dolls. Users can dress up their dolls, add makeup, and interact with each other in clubs. Stardoll also offers interactive activities, and somewhat educational games for their users. The service is monetized through virtual goods. For 2011, Stardoll posted revenue of SEK 202 million (€23 million) according to Allabolag.se.
Friday Wrap Up
Hey! It's Friday and here's our roundup of news, jobs and events from the region. Man, we've been promoting the Arctic15 a lot in the last month, but only because we're super excited to be throwing it next week. We hope to see you all there! Grab a ticket if you haven't already!
Top story is the International Day for Failure happening tomorrow. The event has it's roots in Finland, in response to Finns trouble of taking risks for fear of the social stigma of failure. I hope everyone fails tomorrow!
Nordics Startups: Look East For Once
One thing I think we should all be surprised about is how few startups in the Nordics go after the Russian market. Startup opportunities abound. Russian internet services haven't quite matured meaning there are still holes to fill and a growing market to take advantage of. On top of that, huge funding round numbers are thrown around all the time, hinting at massive valuations and future payouts.
We have a cross-publishing agreement with East West Digital News, and every now and then we'll try to add in a story from Russia. They have some interesting analysis that we share, but I also try to pick out the big funding stories to show what's happening in the region.
Guest Post: Nokia Startup Mistake #9 - Arrogance
Editor's note: Here we have a guest post by Mika Marjalaakso, the CEO of Oak Ventures, and a seasoned serial entrepreneur, angel investor and startup advisor. Marjalaakso is painting with broad brushstrokes here, but it's true that people need to re-learn how to get things done when switching from a large corporation to a startup. Many of these points are common sense, but by saying it out loud we can either acknowledge it, or start a discussion around it.
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This is part of my Nokia Startups Mistakes series. For a backgrounder, please read the introduction. This is a somewhat difficult mistake for me to write about as I haven’t personally witnessed it in my interactions with Nokia-based startups. Some angels and VCs, however, have mentioned enough times that they think quite many ex Nokians suffer from being arrogant. This behavioral trait most likely is rooted in how things were done at Nokia Corporation.
Let me first define what is understood with arrogance here.
Arctic15 Less Than A Week Away - Get Your Tickets Before It's Too Late
Things are bustling at the ArcticStartup office. Our conference, the Arctic15, is less than a week away and we are excited to meet our readers and bring in an awesome lineup of speakers from around the world.
So if you haven't gotten a ticket yet, head on over to Arctic15.com/tickets. If you're a CXO at a startup, remember to apply for the first day so you can get meet investors and get involved with the focused knowledge from the keynotes and panel discussions. And for anyone else that wants to see what the Nordic and Baltic startup scene has to offer, we hope to see you on Thursday! Just get yourself a one-day ticket for Thursday.
That's not all next week has going on. We encourage anyone with an interest in Data or Design to come to the OOHACK hackathon hosted by Open Ocean Capital on October 16. The winning team grabs €3000 and a chance to present at the Arctic15. Everyone else should get an awesome day of hacking filled with plenty of food and drinks!
Spotify 2011 Financials Show Operating Loss Of $61 Million
Since I upgraded to Spotify Premium I haven't been reminded every five minutes that Spotify needs money with a "Hi, this is Johnathan from Spotify..." advertisement. But the financial numbers also paint a clear picture.
We're always interested in numbers on Spotify, and PrivCo, a company that sells data on non-pubicly traded companies, has released a financial overview of Spotify. The 2010 and 2011 numbers paint a picture of what we already know - Spotify faces high costs and is operating at a pretty substantial loss. Record companies demand a pretty significant share of the revenues to allow streaming rights, and meanwhile Spotify's personnel costs have jumped up as they scale to new countries.
Alekstra: Corporate SMS Volume Also On The Decline In Finland
While Alekstra may have bigger plans in the pipeline, they're still providing a valuable business to corporations by optimizing their phone plans. From the data they collect, they're seeing a sizable decline in SMS volume starting late 2011.
This data shows a similar picture to iPhone SMS usage Alekstra has collected through the Ratemizer iPhone app. We covered the app in late September, and Ratemizer has been the #1 or #2 top grossing finance app in Finland since the app launched a couple of weeks ago. "We can see some pretty interesting stuff about the current trends of behavior, and it's pretty fascinating I have to say," says Tero Kuittinen, VP, Sales and Marketing at Alekstra.
On Tuesday Kuittinen wrote in Forbes how text messaging volume is declining sharply in Finland among iPhone users. He writes:
Everplaces And Pult.io Win Qualcom Ventures' €100.000 QPrize
We don't usually like to cover start awards on ArcticStartup (unless we're giving it of course!). I realize the road to startup success is arduous, and winning any sort of fancy rock with writing on it helps mentally affirm the crazy life path you've put yourself on. But we get "enough" press releases from contest where there are 100 winners each year that I've become cynical. That being said, when there's €100 000 behind the award, I think it's noteworthy. Early this week two companies from ArcticStartup region won the QPrize, hosted by Qualcom Ventures.
The judges must have appreciated services that combine web and mobile into a full service. For Western Europe, Copenhagen's Everplaces won the first prize, while in Eastern Europe, Pult took first place.
Don't Have A Ticket To The Arctic15? Pitch Your Startup To Rubylight For A Free Ticket
Arctic15 is on the horizon and here is your chance to attend for free. All you have to do is pitch your idea or a startup to an absolutely fantastic investment fund - Rubylight.
Their team were a part of Odnoklassniki.ru, one of the leading Russian social networks, and are very comfortable with running and scaling a 100 million user business. So if anybody has the money, expertise and contacts to scale your company - it is them.
Freespee Receives €3.3 Million For Click-To-Call Advertising Solution
Freespee, the Swedish call advertising startup, yesterday received a €3.3 million round led by Sunstone Capital. The company offers location-based, mobile click-to-call advertising and analytics, which is useful to connect customers to apartments or cars, rather than having them fill out a form. The funding will be used to add customer development and support resources, establish commercial headquarters in London, and expand their development center in Uppsala.
