According to Hermann Hesse, every reset has an inherent magic: Innovestment is back! As the name "Innovestment" suggests, we have always tried to combine two factors, innovation and investment. While we are already looking forward to being able to present new exciting (growth) companies and thus investment opportunities to you in the future, we have also applied the topic of innovation to ourselves. But before we introduce you to the future - the new innovestment - let's take a look at the past and clarify where we come from and what we are all about.
When we launched Innovestment in Germany in 2011 together with Seedmatch (crowdinvesting) and Startnext (crowdfunding) as one of the first crowdfunding platforms for startups ever, we did so in the face of a deplorable so-called early-stage funding gap. Innovative companies without collateral were threatened with extinction right from the start, because capital was not available from banks, especially in markets and models that were considered uncharted territory and the VC industry was still nascent relative to UK and US. However, if these ideas are not promoted accordingly, Germany will not only lose its place among the world's top in the long run, but investors will also potentially lose a lot of money. As a country of hidden champions, Germany in particular knows the triad of technology, progress and prosperity.
With Innovestment, we made these startups accessible to investors. A lot has happened since then: While in 2011 only six companies nationwide were financed with 1.4 million euro via crowd investing, in 2018 748 projects were already able to make use of it and collect a proud 297 million euro. The market has also diversified considerably as platforms specialised in real estate such as Exporo or iFunded have emerged.
According to our philosophy, we want to enable investors to invest in a self-determined way. The innovestment model allows them to act as entrepreneurially as the companies we present, which in turn are financed in a sustainable manner.
Innovestment has always seen itself as a trendsetter and pacemaker of development and since its foundation in 2011 has arranged a total of over 8 million euros in 30 public and 10 private project financings. We are proud of the companies that we have been able to accompany so far and that have been financed thanks to you, our investors, because your wealth of ideas and your passion for entrepreneurship drive the economy forward and make the world a better place. At the same time, money flows where we believe it belongs: Into the real economy and therefore into companies that shape the future.
And we too are now turning to the future. Neither could investors in the meantime expect relaxation on the interest rate front nor has much changed in the starting position of the young companies. We therefore remain true to our goals and are creating the basis for their implementation through restructuring: We want to make it easier for companies to obtain financing and at the same time create attractive investments with which investors can expand their portfolios in the long term.
Our model was further developed in three main categories:
The entire investment and financing process has been revised and thus simplified even further, because your time is worth it to us. We are starting off with a new business and fee model that is as clear as it is fair. The conditions for investors have also changed and now provide for a fixed minimum term and interest rates for the subordinated loan. A central feature of our design and functional makeover is the elimination of the so-called funding bar, i.e. the display of the capital already invested, as we attach importance to the fact that investors make their decisions independently and do not possibly succumb to the herd instinct.
Today, we also offer investments in small and medium-sized enterprises (SMEs) in the areas of sustainability (impact investing), innovation(growth and project financing) and entrepreneurship (revenue stage startups). Thus we cover the entire growth process from seedling to fully-grown tree in full bloom. This set-up also allows a certain degree of risk diversification in the portfolio.
From now on, a company valuation is no longer necessary, since the subordinated loan is purely interest-based and does not provide for a participation in the equity capital. On the other hand, the Financial Investment Brokerage Regulation (Finanzanlagenvermittlungsordnung - FinVermV) has been amended to allow new thresholds. You can read them here.
Innovestment now has a new shareholder structure, from whose decades of experience in financial asset brokerage we can draw. And we look beyond the German horizon: Within the framework of internationalisation and European harmonisation, our platform will soon be available in English, so stay tuned!
We are also sharpening our focus in two areas that are close to our hearts. On the one hand, we are pursuing a multi-asset approach, which allows us to present exceptional entrepreneurs as well as impact investments. On the other hand, we would like to increase the proportion of female investors from the current 10% to 25%, thus enabling women to diversify their assets more effectively.
So the name stays the same, we also keep our drive, but everything else has been revised. Many of these points still need a more detailed explanation and therefore we will take them up again in detail shortly. Do you have any questions? Then write to us, we look forward to the exchange with you!
If you would like more information about the investment process at Innovestment, please visit our "How it works" page.