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By Companisto

Investments With a Safety Net - Companisto Introduces Crowd Voting

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Dear Companists,

We are pleased to present crowd voting to you: the chance to invest in venture capital with a safety net!

Over the past few months, we have been collecting feedback and communicating with a lot of Companists in regards to your experiences as investors. This process of crowdsourcing inspired us and resulted in us being able to present crowd voting to you today. Thank you for your contribution and giving us the unique opportunity to profit from your knowledge!

The concept of crowd voting is a novelty within the equity crowdfunding industry. This means we are establishing a further "best practice" in crowdfunding.

 

What Is Crowd Voting?

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.

 

How Does Crowd Voting 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.

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.

 

What New Opportunities Does Crowd Voting Give Investors?

  • Increased Safety: You as 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.

 

We hope crowd voting on Companisto is as fundamentally game-changing in equity crowdfunding to you as it is to us. We wish you and all the other Companists all the best when using crowd voting for making investment decisions.

Crowd voting as a safety mechanism has already been implemented for our latest start-up ameria.

 

Best regards,
Your
David Rhotert & Tamo Zwinge



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