FiBAN Follow - a new investment model by FiBAN for FiBAN
FiBAN has launched a new investment model for its members which enables FiBAN members to have a smoother way to make bigger, faster and more straightforward investments in growth companies together. The idea is to match active angels with followers. Any FiBAN member can sign up as an active angel (one to follow) and as a follower. Each investment decision is made by the follower, not the active angel. The structure is unique in the world and is only open for FiBAN members.
Picture of the beta-version of the platform on the left - powered by EMU.
The model enables active angels to gain leverage in investments and a chance to participate in bigger investment rounds. The angel will be awarded for successful investments that make 2X profits. Following active angels enables easier investments decentralization, and an opportunity to join investment rounds that normally would not be available. The structure also enables investing into growth companies with less hassle and with comparatively more affordable expenses. Each follower decides by themselves which companies they want to join.
Frequently Asked Questions (FAQ's):
- What are the fees for the model? The annual fee is 250 euros, which will only be invoiced once you have done your first investment. In addition there will be an add-on of 15 euros per investment transaction. The active angel receives a small administrative award (1% of the investment) already from the very beginning, and a bigger award (20%) only if the exit is worth 2X.
- Does the active angel have to invest in the round as well? How much? And in relation to the followers share? Yes, the active angel has to invest in the round as well. Full disclosure of all investment sums (incl. previous rounds) is mandatory. The terms need to be the same for the active angel as for the followers. In addition to customary board and adviser compensations, no extra charges can be added.
- How many active angels can one follow? As many as you like.
- Can I sign-up as both an active angel and a follower angel? Yes.
- What is the minimum ticket size? 1000 euros. The active can set the minimum and maximum per each round.
- What kind of cases will there be? It depends on the active angels.
- Can there be several active angels in a round? No, only one. The active angel is not necessarily the same person as the lead angel in the round.
- Who makes the investment decision? The follower always decides on their own behalf whether they want to invest.
- Is a follower obligated to invest in any circumstance scenario or time frame? No. The follower will never be obligated to invest.
- How does the structure show in the cap table? As one investor, KY whose voting right is used by lead.
- After a funding round is completed, is it public information who has participated in the round? No.
- Can a follower participate in the target company's shareholders meeting and vote? No, unless otherwise agreed on.
- Who determines regarding the voting power? It is up to the KY. FiBAN Follow allocates the voting power typically to the active angel. This can be determined otherwise per case.
- What is the time frame for the funding round? It is up to the active angel. The recommendation is one week.
- What happens if the round is oversubscribed? After the initial grace period, the model operates on a first come first serve basis. The last investors share will be cut, if needed. If the follower hasn’t paid in the said time frame, they will lose their right and the option will go to the next one in line.
- What about additional funding rounds? How are they constructed in the model? What if the active angel doesn’t continue in the following rounds? Following rounds are considered separate cases. If a pro rata round is made, then followers can be given a possibility to invest.
- How can I exit FiBAN Follow? Follower can exit FiBAN Follow by notifying via designated channel.
- Can FiBAN partners join the model? No, currently the model is only for personal members.
More material is available for FiBAN members in Gust.
Deal Flow Manager
Janne Jormalainen, Chair