Companisto founders David Rhotert and Tamo Twinge announced a new safety initiative called crowd voting, offering Companists “the chance to invest in venture capital with a safety net.” After collecting feedback and communicating with investors over the last months, the process of crowdsourcing inspired the founders to offer crowd voting. “We hope crowd voting on Companisto is as fundamentally game-changing in equity crowdfunding to you as it is to us,” noted the founders. The safety mechanism has been implemented with the platform’s newest start-up campaign, ameria.
ameria is an established technology company and generated annual revenues of €2.2 million in 2015 through global clients such as LEGO, Microsoft, and Telefónica. The company’s new product, the Virtual Promoter, is an interactive and gesture-controlled shop window that will revolutionize people’s shopping experience around the globe. The campaign has already exceeded 288K€ toward its 500K€ funding goal with the confidence of over 308 investors.
But, what is crowd voting? According to their virtual letter,
“Crowd voting expands the rights of the Companists, meaning more power in regards to making decisions. It creates a safety mechanism for investors for investing in venture capital.”
And how does it work?
“Once a start-up’s equity crowdfunding campaign has ended, a total of 2/3 of the Companists’ investments are paid out to the start-up. The other 1/3 is deposited into an escrow account protected from insolvency. Crowd voting involves the Companists themselves voting on whether or not they want the start-up to also receive the final third of the investments. Crowd voting takes place in the closed investors section, usually six months after the equity crowdfunding campaign has ended. The vote may take place earlier if the start-up requests so.”
Rhotert and Twinge continued,
“The Companists’ decision is influenced by the company’s development which is published in the start-up investor updates. The final third will be paid out to the start-up if the simple majority of votes (weighted according to fund share) opt for a payout. If the results of crowd voting end in the decision not to pay out the final third, each and every Companist will receive back a third of their invested amount free of cost. Start-ups that offer crowd voting shall be marked accordingly in the future.”
In the letter, the following investor opportunities were cited about crowd voting:
- Increased Safety: Companists have the chance to collectively decide whether or not you want to invest the final third or if you would rather retrieve the amount, thus reducing your share. Investing in venture capital with a safety net.
Improved Success Assessment of Start-Ups: If a while has passed, a company’s success potential in the market and in turn its potential return can be newly assessed. By means of crowd voting, the Companists make their decision based on the development over the past months. Previous start-up investor updates function as an information basis for the crowd voting.
- An Additional Incentive for Start-Ups to Provide Investor Reports: It goes without saying that it lies in the interest of the start-ups to also receive the final third of the Companists’ investments. As the decision of the Companists is based on the start-up investor updates already submitted, there is an additional incentive to provide investor reports besides out of pure contractual obligation.
- Companists Can Interact and Exchange Opinions: Decisions concerning crowd voting are made by the Companists themselves. This is done in the closed investors section where Companists of the respective start-up have the chance to exchange ideas with one another and discuss these decisions. Crowd voting lasts for a period of two weeks.
At this writing, 51,370 Companisto investors have raised 27,495,870€ for 59 projects. In addition to ameria, other live campaigns include TradeMachines overfunding at 693,100€ with 7 days remaining on its campaign, Hundemaxx hitting 78% of its goal with 30 days remaining on its bow wow raise and LUUV securing 211,655€ with 16 days remaining on its campaign.