Globevestor

Globevestor provides accredited investors around the world the access, resources and legal & financial infrastructure necessary to invest in promising high-impact startups focused on emerging markets. On the other hand, Globevestor provides emerging market startups a unique opportunity to raise smart capital and seek mentorship from a global network of experienced and accomplished investors in exchange for equity in their companies. How does Globevestor work? Globevestor's platform is built around a unique marketplace that connects accredited investors around the world with high-impact startups in emerging markets. Globevestor brings the to invest small amounts (minimums ranging US $1-10K) in early-stage rounds in startups focused on emerging markets. Purely through the online platform, members can browse ongoing startup deals, interact with founding teams, take investment decisions, e-sign legal documents and make payments. Globevestor manages the members' investments, provides support to the startups to help them achieve success, distributes proceeds on liquidation and ensures minimum tax liability for the members within the international legal framework. Who can be an investor on the Globevestor platform? Investors on the Globevestor platform are accredited investors (as defined by SEC and US securities law) from around the world and primarily include seasoned angel investors, entrepreneurs and top-level business executives. Based on the tax domicile/citizenship, certain investors might not be allowed to invest in certain deals based on the securities laws of US and the country where the startup is based. [In short, accredited investors are individuals with a net worth of more than US$1 million or having an annual income of more than US$200,000. The definition provided by the SEC is as follows - http://www.sec.gov/answers/accred.htm]. For registering as an investor, you will need to fill a simple form for registration, which includes a self-certification of your accredited investor status. You will again have to confirm that you are an accredited investor when you decide to invest in a startup. Does Globevestor rely on the JOBS act? No. Globevestor does not rely on the enablement of the JOBS act for it's functioning. Prior to the enforcement of the JOBS act, equity crowdfunding in Unites States was permitted only for accredited investors. The JOBS act enables even non-accredited investors to invest through equity crowdfunding. However, as Globevestor is currently open only for accredited investors, the passing of the JOBS act does not have a direct bearing on us. Is there a membership fee for investors? No. Registering as an investor on the platform is free. Globevestor does not charge its investors any one-time registration fees or any annual membership fees. Once the free registration is completed, you can immediately start browsing startup deals to invest in. Is there a minimum or maximum investment that I can make? Globevestor allows you to write much smaller checks than typical angel clubs. The minimum investment that an investor can make per startup is US$1,000. The maximum investment is US$25,000 per startup. These amounts include the upfront administrative fees charged by Globevestor. Is any administrative or distribution fee charged on my investment? Yes. Globevestor charges you an administrative fee per investment, which will be decided for every deal. This upfront administrative fees is charged to set up all the legal & financial documentation and its management for the life of the investment. There will be no further administrative charge during the holding period of the investment or on a successful liquidation event. Globevestor Inc. and its employees do not receive any compensation from the administrative fees. At the maturity of the investment (upon a liquidation event, e.g. IPO, acquisition or fund closure), Globevestor will receive a compensation that will be a share of the increase in the investment value (called carried interest or carry). The carry may vary across different startup investments but will typically be 20% for most of them. If there is no increase in the investment value at exit, Globevestor will not receive any carried interest. How does Globevestor make money? Globevestor makes money in the same way its investors make money - from the performance of the startup investments. Globevestor and its employees do not get any compensation from the administrative fees collected for startup investments. And as we do not charge any commission on the fund raised, we do not get compensated from the total fund raised either. Globevestor only receives a performance-based compensation at the maturity of each investment (a liquidation event), also called the carried interest. As a result, our motives are perfectly aligned with those of our investors. We make money only when our investors make money. A non-performing startup investment for the investors also impacts us the same. This keeps us committed to build a great funding platform and find the most promising emerging market startups for our members to invest in. Why do investors invest in startups through Globevestor? Globevestor makes it possible for developed market investors to make cross-border early stage investments in high-impact emerging markets focused startups. Using Globevestor, they can diversify their portfolio and take advantage of the rapid growth in emerging markets at low minimum check sizes and in a legal & tax-friendly way. And this can be done without paying any membership fees or management fees to Globevestor. To add to this, the whole investment process through the online platform is extremely easy, efficient and transparent. Further, as Globevestor follows a strict screening process and co-invests with leading accelerators and angels in emerging markets, the investors are assured of having insider access to the most-promising deals. Is there any fees charged to the startups raising funds? No. Globevestor does not charge any fees to the startups for fundraising. Our only criterion is that the startups should be high-impact ventures focusing on emerging markets and meet our Investment Thesis. We want only the most promising startups to be listed on the platform. How many investors can be a part of a single startup deal? A maximum of 90 investors can be a part of a single startup deal. However, the exact number of investors will depend on the specific deal, startup location and relevant international regulations. Globevestor will have the final say in the total number of investors allowed per deal and will be indicated as part of the details of a deal. How does the investment process take place? The first step in the investment process is to register for free as a member on the Globevestor platform. Once registered, you can browse through the various startup deals available at that moment. A lot of information is made available by each startup's founding team, including on the team, market, product, business model and traction achieved till date. This information may be supplemented with appropriate videos and presentations. You can also submit your questions to the founding team and Globevestor will make all the effort to get them answered as far as possible. After you've chosen a startup deal to invest in, you will need to indicate the amount you'd like to invest and fill up the legal documentation. The investment opportunity in a deal will be made available on a first-come-first-serve basis to 'book' a spot, unless otherwise stated in the deal. After closure of the deal, you will be provided a maximum window of a few days to transfer the money and send the signed legal documents (could be done purely online) to 'confirm' your interest. The exact number of days and method to do the above might vary based on the deal and will be mentioned in the deal. If the deal fails to achieve the target amount successfully, you will not be charged the amount and it will be returned to you as soon as possible, without interest or adjustments. Your investment will become active only after a startup deal closes successfully, your money & signed documentation is received, reviewed appropriately and processed. How does Globevestor manage oversubscription? The deals at Globevestor work on a first-come-first-serve basis, unless otherwise stated. Members get a 'booked' spot if they choose to invest before the deal target amount is reached, deal duration ends and number of spots run out. If you choose to invest after the target amount if reached and the deal isn't closed, then you can still invest, but it is not a booked spot. Upon closure of the deal, the members with booked spots are first asked to complete the formalities and confirm their investment within a fixed number of days. In case some members with booked spot are unable to confirm their investments (e.g. they choose to withdraw their investment or fail to complete the formalities), then the members with un-booked spots will be invited to confirm the investment. In case of over-subscription and depending on the specific deal, the startup may accept funds beyond the target fundraising amount. In such a case, members with both booked and un-booked spots will be invited to confirm their investments, as long as the total number of permissible investors is not exceeded. What will happen to my investment if a startups deal is unsuccessful or terminated prematurely? In case investor members at Globevestor do not show sufficient interest in a startup deal in which you chose to invest, resulting in unsuccessful closure of the deal, or if that deal is terminated prematurely for other reasons, your investment will be returned to you as soon as possible without any interest or adjustments. What kind of instruments does Globevestor use to invest in startups? Globevestor uses different instruments to invest in startups based on the specific deal, including common or preferred stock, convertible notes, etc. A convertible note is a short-term, unsecured loan that is convertible into equity and is often used for angel investments. A convertible note issued as investment during seed stage can automatically convert in shares of preferred stock on closure of next round of financing by the startup (e.g. Series A). The advantage of convertible notes is that the valuation exercise for the startup can be postponed to later when there is more data on revenue, customers, etc. Please note that if the startup is unable to successfully close the next round of funding and is unable to pay back its debt obligation, the entire investment made through convertible notes may be lost. There are a few important terms related to convertible notes, such as valuation cap and discount, and for more information on these, refer to the legal documentation that you will be required to fill after you decide to invest in a startup deal (but before the actual money transfer). When I invest in a startup through Globevestor, what do I own? You will own shares in a sub-fund or special purpose investment vehicle (the "sub-entity"), which is managed by an affiliate of Globevestor. Each sub-entity will invest in a single company focused on emerging markets either directly or through a legal entity in a tax-friendly jurisdiction. Your share holding in the sub-entity will be on a 1:1 basis to the sub-entity's corresponding holding in the security offered by the target startup (such as convertible notes, Series A shares, etc.). Please note that the investors will not hold a direct share in the startup company itself. Therefore, they will collectively grant the Globevestor-affiliate fund manager the powers to take action for the sub-entity, including rights for a seat and resultant voting powers on the board of directors of the startup company. How is startup valuation decided? Globevestor takes special care to ensure that its investors are being presented with fair deals, for both them and the startups. Globevestor typically will invest in a startup that is backed by leading accelerators, angels or other investors. The startups usually have raised funds from these investors on a mutually agreed valuation & deal terms and will extend the same deal terms to Globevestor. For each deal, Globevestor's Investment Committee will further vet the deal terms to ensure that they are reasonable and look at valuation in multiple ways (comparable multiples, ratios, cash flow, etc.). In some cases, we may also take advise from other investors or a panel of investors to vet the deal terms. However, startup valuation is finally subjective and there is no guarantee that the valuation arrived at is foolproof. How is legal documentation done on Globevestor? Globevestor wants its members to be able to complete all the legal documentation online, to bring ease and comfort to the investment process. Once you decide to invest, you will be presented with a set of legal documents that you will sign. Please review these documents and in case of any queries please contact us - we'll be happy to explain them to you. Once satisfied, you will need to electronically sign those documents and submit them online through our platform. We will review these submitted legal documents after successful closure of the startup deal. Only after your legal documents are reviewed and accepted by us, as well as the payment is received from you, we will be able to provide you with a copy of the completed & signed legal documents. Is it possible to sell my shares in the startup investment? Your shares in the sub-entity are non-liquid securities. They are not traded on any securities exchange or secondary market. In exceptional cases, they may be transferred with the consent of all directors of the sub-entity, however the chances are rare. Please plan to hold the shares till a liquidity event happens for the investee startup company. When will I receive a return on my investment in a startup? You will obtain returns on your investment after the startup has a liquidity event, such as upon acquisition or upon an initial public offering (IPO) of its shares. After such a liquidation event, you will receive your portion of the proceeds after deduction of any distribution fees or carry compensation. The timing of the liquidity event varies hugely from startup to startup. They could typically take anywhere between two to ten years. Please be cognizant of the fact that providing early stage capital to startups is a high-risk investment. While Globevestor leaves no stones unturned to choose the most promising startups, many startup companies may never have a liquidation event and you may lose your entire investment. What will happen to my investment if I invest and Globevestor shuts down? Even in the untoward event that Globevestor shuts down, your investment will remain safe. A fund manager appointed by the investors can manage the fund that will be created by Globevestor for the startup investment. Globevestor will itself try and put in place a replacement manager. In the event Globevestor is unable to find a replacement, the investors can collectively appoint one as well. What is the risk profile of the startup investments on Globevestor platform? The investments you make through Globevestor are early stage investments in startup companies. These are high-risk investments and based on a future promise of return, which may or may not turn out to be true. Like any other company, each of the startups operates in fluctuating market conditions, unexpected challenges, new competition and other risk factors. In the face of these challenges, some startup companies may go out of business, in which case your entire investment may get lost. Therefore, please conduct as much due diligence as you can at your end before making an investment decision. One strategy followed by some is to build a portfolio of such startup investments, although there is no surety that this will reduce your risk. Building a portfolio means that you divide your total investment amount into smaller amounts and invest in multiple startup deals rather than invest the entire amount in a single deal. What types of startups are chosen to do fundraising on Globevestor? Globevestor features early to mid-stage private tech startups that have a deep focus on emerging markets. Our core requirement is that the startups need to be high-impact ventures with an aim to solve new problems in emerging markets from a consumer, business or employment perspective. In addition, we prefer startups with strong & committed management teams, demonstrated traction on key metrics and with backing of reputed investors. What is Globevestor's screening process for startups? Globevestor leverages its network of partners and investors to identify promising startup deals. Our network of leading startup accelerators & angel investors across various emerging markets refer high-impact startups to Globevestor, once they themselves have decided to invest in them after conducting thorough due diligence. Startups that are currently doing fundraising and have a reputed lead investor can also apply directly online. However, Globevestor lists only a small fraction of the startups that are referred to us or are keen to use our platform. Each startup deal presented on the platform is screened by our Investment Committee, which conducts its own due diligence. Why do startups do fundraising through Globevestor? Globevestor provides emerging markets-focused entrepreneurs unprecedented access to smart capital from developed market investors in an easy, efficient and transparent way. Through Globevestor, they get access to an international network of reputed angels, entrepreneurs and global business leaders. This network is of immense help to entrepreneurs from emerging markets who need the knowledge, mentorship and connections from these well-connected and leading thinkers and doers from across the world. What information about a startup is available on Globevestor's platform? Each startup profile will list down details of the source of the deal, e.g. whether it was referred by an angel, if it belongs to an accelerator class, etc. The profile will also list whether the startup has raised funds earlier, from whom and whether it has a lead investor in the current fundraising round. In addition, information on the team, market, product, business model, traction, organization chart, available financials, etc. would be provided. There would also be sections on FAQs & updates where the founders will answer the key questions and post company updates. These sections will get regularly updated while the deal is live as potential investors ask additional relevant questions. Moreover, the management team will also provide information on how it intends to communicate with the investors post successful deal closure, including the nature, mode and frequency of communication. Can I disclose information about startups that I received through Globevestor to other individuals & companies, or on public websites or venues? No. The information you receive through Globevestor about the startups and deals is to be kept completely confidential, as mentioned in detail in our terms and conditions of use. Any unauthorized disclosure of information is in direct violation to these terms and will result in immediate ban on the investor account and/or further legal action.