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INVESDOR INSIGHTS | 18.03.2022
As an investor and our client, you may have often wondered how we select the companies we offer to you on our platform. Well, it's as simple as it is complex.
Simple because our goal has been clear since day one: to bring together exciting companies and investors who, like you, are interested in attractive and promising business models. Complex, because evaluating companies and their growth potential is anything but trivial.
In order to do justice to our claim, we involve a whole range of experts in the process, each with long-time expertise in his or her field, and form our so-called Investment Committee. At this point, we would like to explicitly point out that the decision as to which project you ultimately invest in lies exclusively with you and that we make suggestions to you with our campaigns. Nevertheless, by checking decisive parameters, we ensure that only campaigns that fundamentally meet our quality criteria for good investments find their way onto the platform.
But first things first. The first contact between us and potential projects often takes place between the companies and our financing experts around Günther Lindenlaub from the Vienna team. The team is approached by the companies looking for an innovative financing opportunity or it looks for companies that could be interesting for our crowd. "Already in the first conversation we get a good impression of whether the respective company is basically suitable for financing via our platform," Günther Lindenlaub reveals.
In a further step of the process, all other relevant areas of Invesdor are involved. For example, our legal team analyses the structure of the company and the existing shareholding relationships on the basis of public registers and reports from national credit agencies as part of a so-called KYC check. In this context, the team also clarifies, for example, who the responsible persons are and verifies their identity. Andreas Knopf from the legal team in Berlin explains: "Before issuing shares, for example, we also take a close look at the company's articles of association and any shareholder agreements to determine whether there are any obstacles to the creation of new shares."
"After all, we want to offer investors great business models to invest in"
The financial experts, in turn, assess key financial ratios. Niklas Green of the Finnish team, for example, is an expert on young growth companies. "Unlike long-established companies, these have only a brief track record or even no track record at all - as experts, we then have to look closely at where we can find data that enables us to evaluate them in terms of economic potential. After all, we want to offer investors great business models to invest in - and high-quality information to support their decisions."
Christian Becker and Sabina Bychkar from the Berlin team, on the other hand, know above all how to evaluate the risks of companies from the SME: "Traditional SMEs offer a lot of data according to their history. This flood of figures, which have to be analysed and interpreted correctly, can tell us a great deal about the respective companies - and thus also serve as good indicators for Invesdor investors", says Christian Becker. Sabina Bychkar adds: "In addition to the data of the individual companies, we also look at the situation in the industry in which these companies operate as well as at their business areas. After all, a company can be in such a good position - if the industry in which it is active suddenly goes bad, the tide can turn even for this company, which is solid in and of itself."
"How does the company present itself? Is the business model comprehensible? Are the founders experienced? Is the product interesting?"
Marketing also plays a major role in the selection process. Our campaign team is responsible for checking the marketability of the project. "We always look at the company from an investor's perspective: How does the company present itself? Is the business model comprehensible? Are the founders experienced? Is the product interesting? Are there press releases or comments that need to be explored in more detail?" says Nancy Heinrich from the German campaign team. Bettina Lönnholm-Rask from the Helsinki team adds: "A sustainable economy is very important when investing money. Especially in crowdfunding, a project must also be able to engage investors emotionally, for example by informing how the business case impacts social factors, such as gender equality, education or good health and wellbeing."
"Due to our level of digitalisation, we are much more efficient"
The teams' assessments are discussed in the Investment Committee, in which all of Invesdor's specialist departments are represented as well as the management. The committee is responsible for the investment projects in all three countries - in Germany as well as in Austria and Finland. If the experts from all areas agree that a project meets the decisive criteria, it is offered to investors on the Invesdor platform.
"The process that potential projects go through with us is comparable to the tried and tested credit processes at major banks - except that due to our level of digitalisation, we are much more efficient in many phases of this process", explains CEO Christopher Grätz.
Despite all the digitalisation, one thing should be pointed out: The human factor still plays a major role for us, especially in the selection process of investment projects. The decision as to whether a project would be inappropriate, for example, against the backdrop of a current political or special situation, is still made by people, on a project-by-project basis.
Speaking of individual: now you know how we decide which projects we offer you - and next week you will read about the criteria you should use to decide which projects suit you personally.
Our due dilligence process in detail
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The information contained herein is not meant to be, and it shall not be interpreted as investment advice or a recommendation and investors must neither accept any offer for, nor acquire, any securities unless they do so on the basis of the information contained in the applicable investment material of a target company. Investing in securities of unlisted companies is associated with high risk.