- How it works
- Why invest
- What you get when you invest
- How returns work
- Understanding deal terms
- How we select campaigns
- How to invest
- How Crowdbase makes money
- How to raise capital
- Benefits of crowdfunding
For more answers see our FAQ
How we select campaigns
We carefully evaluate each application we receive and only accept campaigns meeting our strict criteria. Our selection process includes a comprehensive review of the company’s business, due diligence, information verification, Know Your Client (KYC) and a final review by our Investment Committee.
In addition, we invest in the campaigns ourselves personally, demonstrating our confidence in the companies we choose to work with.
The initial screening focuses on the general idea, team, business model, market potential and other parameters. Below are some questions we ask ourselves and the company’s founders to get to know the business better.
"We choose quality over quantity"
Perhaps the most important factor when considering an investment in an early venture is the team behind it. Does the team have the necessary experience and knowledge to execute the plan? Do they have a strong network to help them open doors in their respective fields? Is the team competent enough and able to take investors to the promised land?
Is there a real problem which the product/service solves? At what stage of development is it? Does the product/service use the right technologies and infrastructure to be scalable?
Does the company have any track record in terms of sales or interested clients? What is the evidence in the market that the company has strong traction? Are there positive reviews about the product/service?
What is the burn rate of the company? How long can the venture survive before it needs to raise more capital? Do the unit economics make sense over the long term? Is the valuation fair for investors?
What is the current market share? What is the potential market share, and what is the total size of the target market? Is the target market growing? Is there existing competition? Are there high barriers to entry?
What is the long-term vision of the company, and does it make sense? What are its core values, and do they cater to its target audience?
After the initial screening, we conduct thorough due diligence into the company’s financials, management team, and market research, to verify the information which will be presented to our investors. If necessary, we work with external advisors and partners to assist us.
Verification of information
We ask for supporting documentation to substantiate the company’s claims, including but not limited to audited financial statements where available, management accounts, certificate of shareholders, business plan, website analytics, digital advertising analytics, code review, and memorandum and articles of association.
The type of documents requested can vary depending on the company’s age and industry, however, the spirit of our due diligence is to confirm, to the best of our ability, that the information presented is fair, clear, and not misleading.
All Directors of the company raising capital with us undergo an identity verification procedure via our third-party identity verification service provider, Veriff. Veriff runs database checks to verify their identity, and screens against sanctions lists and politically exposed persons (PEP) lists. We also ask for a clean criminal record of all Directors, issued by the relevant authority.
Although valuing startups can often be more of an "art" than science due to the highly uncertain nature of the business, there are certain frameworks and parameters that allow us to make a reasonable estimate of the company’s value and potential.
Once the above information is collected and verified, the Investment Committee decides whether to approve the company to raise on Crowdbase.
The Investment Committee consists of both internal staff of Crowdbase and external advisors that can offer their insights in their area of expertise.