SeedAsia, an equity crowd-funding site based in China, has just launched. The company is offering stakes in selected early-stage startups to people.
“It’s kind of a hybrid between Kickstarter and private investment,” said co-founder Tom Russell. The startups to be listed would have ideally gone through some some sort of incubation program and would have shown promise. They can apply offer between $50,000 and $1.5 million in equity through SeedAsia’s platform.
SeedAsia takes a 5 percent “administration fee” and another 5 percent “distribution fee” from the investor.
Potential investors need to apply and be screened, and SeedAsia has set the minimum investment commitment at $2,000 per member. “It costs about $20,000 to $30,000 at minimum to be an angel investor, so this lowers the entry barrier for people,” he said.
SeedAsia is the first equity crowd-funding site to launch in the region, although the equity funding trend has been taking off in the US, where there are apparently over 200 such sites. One of them, FundersClub, recently cleared US regulators, paving the way for more such sites to flourish.
Hong Kong-headquartered Decision Fuel is the first fund to be listed on SeedAsia. The company offers a mobile platform to deliver short consumer surveys. It had $1.25 million in seed funding in 2011, according to AngelList, and counts clients such as P&G, Nike, Colgate. It has already gathered more than 14 million survey responses for its clients, it said.
Russell said the crowd-funding scene is a lot less developed in Asia than it is in the West. The culture is such that potential investors are still more keen on property than in an online startup, he said. Cultural differences also persist. “The local Chinese developers don’t like being transparent with their ideas and sharing, while Westerners don’t understand why the Chinese aren’t as transparent. The truth is, you have big players like Tencent that can copy you easily, which is why people aren’t as open with sharing here.”
SeedAsia has taken on some advisors to raise investor confidence in its portfolio clients. Inporia and Hive7 founder, Max Skibinsky, is one, and Oscar Ramos has been brought in too. Ramos founded Chinese seed fund, DaD Asia.