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PocketVC

Platform for investing in tech startups with small checks

USA, New York
Market: Information and media, Trade, Services, Financial services
Stage of the project: Prototype or product is ready

Date of last change: 09.09.2021
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Idea

PocketVC is a fintech startup that allows investing in early-stage technology companies starting at $1000.  

PocketVC focuses on non-accredited investors to enter the platform and to engage in equity crowdfunding even without any knowledge in that area.  
 
Our aim is to immerse both investors and startup teams into a unique ecosystem, where users will be able to easily communicate with each other and make investment decisions based on internal expertise.

Current Status

PocketVC has been registered in the US and tested on 100 pre-signed US investors with no marketing done and the platform is ready.

We have been already partnering with 3 VCs, 3 venture studios, 4 accelerators, 12 industry experts — all partners are operating globally and have HQs worldwide: Europe, Latin America, the US, Canada, Asia (India).

Our team has developed a scoring and evaluation model to quickly assess all pipeline deals and list startups only with strong traction.

Market

PocketVC is a globally oriented crowdfunding platform aimed at both accredited and non-accredited investors partially represented by new people without sufficient knowledge in venture capital, non-accredited investors with small checks that can’t invest in startups, and business angels looking for the best deals. Our startup is operating within the global venture capital market that showed a total volume of venture deals in 2020 amounted to $100 billion in early-stage and $200 billion in the late stage. This includes $100 billion that was raised via crowdfunding.

Problem or Opportunity

The main issue of VC market is associated with limited access to investment projects, therefore, check sizes are too high for non-experts. Moreover, for common people, VC is unobserved and complex to discover, so to change public investment patterns, more widespread and accessible solutions have to be provided.

Additionally, crowdfunding platforms don’t give investors the opportunity to communicate with startups

Solution (product or service)

PocketVC not only provides startups with fundraising and individuals with investment opportunities but enables venture studios, accelerators, industry professionals, and media as well.

This creates an ecosystem — all sides of the VC world are engaged boosting a number of market participants interactions exponentially: venture studios close funding rounds for their startups, accelerators get clients to assist them with gradual and qualitative growth, qualified experts assess listed projects to provide investors with expertise and opportunities overview.

Competitors

VCs — huge minimum investments, high entry barrier, investment decisions are made by VCs themselves, long investment horizon.

Angel Syndicates: investments from $10k only for accredited investors, 2-10 investment opportunities each month, communication with founder only via email. No option to trade private equities easily.

EquityZen — secondary market of private companies — does not deal with early-stage companies and does not have exclusive offers — acts only as an investment platform without any rating systems and communication with founders. The minimum cheque size is large.

SeedRS — an equity crowdfunding platform that operates in the UK. It deals only with accredited investors and not early-stage companies. The minimum investment is $100.

Crowdcube is a crowdfunding platform that operates only in the European market and provides an abundance of companies with no proven traction. This platform is available for accredited and non-accredited investors, communication is made only by e-mail or on the startup fundraising page on the "Questions and Answers" section. There is no market analytics or researches made for inexperienced investors.

Republic — an equity crowdfunding platform that deals with various stage companies, allows users to trade private companies' equity only for accredited investors. Even investors may be not only US residents, only US startups are listed. This platform does not provide communication with founders and none of the startup experts overview listed projects. The minimum cheque size is $100.

Advantages or differentiators

PocketVC has a row of advantages in comparison with competitors.

We have developed our internal scoring and evaluation system for startups that apply to be listed on our platform. Therefore, PocketVC focuses only on early-stage technology companies with proven traction and the vast expertise of their teams.

We are aiming to democratize VC for non-experienced individuals by both lowering investment thresholds and providing internal expertise including market overviews and startups ratings for contributing to the decision-making process of newcomers. Another goal is to facilitate a proper interaction between VC players: for startups having 1000 small investors may be more beneficial than one huge VC fund since these individuals may contribute a startup their expertise or promote a project.


We are bringing solutions by generating our own ecosystem, where all users are enabled to get in touch with each other via scheduled open pitch sessions, voice chats, private conferences, and an internal chat system. Moreover, we introduce internal educational opportunities for new entrants through webinars with professionals and VC-related articles.

Finance

There are three main revenue channels within our platform:
- We get 1% of startups equity or a commission fee in case of successful fundraising
- Premium paid subscription for investors
- 15% fee from the successful exit

Additionally, we are developing a B2B SaaS solution for angel syndicates: we charge them a fixed monthly fee for using our platform to automize the process of communication with investors.

Regarding cost structure, fixed costs consist of wage payments to product, analytical, and technological departments, office and servers rent. Variable costs are mainly existent due to lawyer costs of getting corresponding license and marketing services.

Business model

Our business model is:
- We get 1% of startups equity or a commission fee in case of successful fundraising
- Premium paid subscription for investors
- 15% fee from the successful exit

Additionally, we charge angel syndicates for using our platform to automize the process of communication with investors.

Money will be spent on

Currently, we are facing with high demand for lawyer services (registration, preparation for crowdfunding license, adjustment under requirements of Regulation CF) and costs related to marketing activities in order to attract first users on the platform. Also consider team salaries to CTO, CEO, and Product Manager.

Offer for investor

We are seeking for pre-seed round to launch globally. It requires us $250k at the moment to register everything properly and acquire clients globally

Team or Management

Risks

Risk is an integral part of any investment decision, especially in the segment of alternative investments. However, the properly sorted pool of projects and smart money maximally mitigate the risk of failure.

That is right what we do at PocketVC. Our partnerships with startup studios and accelerator programs provide the platform with a well-sorted pool of investment opportunities. Even more, industry professionals are available for connection with project teams for fruitful collaboration and further development of startups. This only increases chances of a successful exit.

As for the users, we compile ratings of listed investment opportunities, so everyone is capable of making the more correct decisions.

Our application to SEC and Financial Regulatory Organizations involves consultants for legal compliance. This cannot be made until we get financing and, thus, we may use only SAFE notes with accredited investors and startups fundraised, but to scale rapidly more automated and regulated ways have to be used

We may face a case when there will be an imbalance between investors and startups listed: the latter may lack as we deal only with early-stage startups with strong traction. However, we have partnerships with venture studios and accelerators globally, so this issue eliminates

Incubation/Acceleration programs accomplishment

Newchip accelerator
https://newchip.com

Won the competition and other awards

no

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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video