FAQ

 

General

Crowdfunding is a funding model for raising money from the general public, typically through an online platform, where the basic idea is to raise small sums from a large number of donors or investors.
In crowdfunding, the entrepreneur publishes a request for investment on a special online platform. The request can include a statement outlining the purpose of the request, details of the product/venture, a business plan, additional relevant information, and a description of the consideration for the investor in return for his investment.

There are 4 different types of crowdfunding:

  • Donations based crowdfunding – the supporters donate their money for a purpose they identify with.
  • Rewards based crowdfunding – the supporters receive some kind of reward in return for their support – mostly a product.
  • Loans based crowdfunding – the lenders lend their money to people in return for repayment of the money plus consideration.
  • Equity based crowdfunding – the investors invest their money in companies in return for shares. Until recently this type of crowdfunding was only possible via stock exchanges in Israel and abroad.

Crowdfunding platforms have paved the way and created a powerful community that supports and funds excellent ideas. However, they have never offered an investment that allows partnership, and if the project you invested in became a world success, all you were left with was a thank you card or in the best case, the product that you funded.

During the past two years a world trend has begun to regulate equity based crowdfunding and thereby allow the public to invest via internet platforms and be shareholder partners in the company, with the aim of being part of the success.

ExitValley is the first equity based crowdfunding platform that changes the rules of the raise of the world of investments in startups and small businesses. ExitValley has created a new reality where Israeli startups and small businesses can easily incorporate and raise money to facilitate their activity, while making it possible for everybody to invest in these startups and small businesses in consideration for shares, thereby becoming part of the success.

Gone are the days when a small group of people enjoyed the fruits of success of the startup nation, now everybody can.

Entrepreneurs create a fixed period fundraising campaign, where they wish to raise a sum of money in consideration for the allotment of a particular percentage of shares in the company. The investors examine campaigns that interest them and choose how much to invest. If the fundraising campaign reaches the  funding target, the transaction will go ahead – the company will receive the investment funds and the investors will receive the shares. If the fundraising campaign does not reach the  funding target, the investors will receive all their money back.

Any person over the age of 18 can invest via ExitValley and become a shareholder in Israeli startup companies and small businesses.

Our investors can be divided into 3 main groups:

  • Israeli citizens
  • Israeli investors/corporations who are defined by the Securities Authority as "accredited" investors.
  • Foreign investors.
    United States citizens who are defined as "accredited" investors in their own country.
    European Union citizens.

 

  • Incorporate/unincorporated Israeli companies.
  • Companies wishing to raise sums ranging from 25,000 dollars to one million dollars.

 

Investors

 

  • Now everybody can
    The approach and exposure to the most profitable investments has until now been the prerogative of a small group of investors. We at ExitValley have invested a great deal of effort in removing the blocks that prevented you from investing in these companies until now, and we have opened up for you the possibility of investing in a variety of companies according to your fields of interest:

    - You can also invest low sums.
    - You can create a varied investments portfolio with investments close to your heart.
    - You can see a return for your money faster than you thought.
    - Beyond the encouragement and support, now you can actively assist and invest in a friend, relative or charismatic entrepreneur.
  • The simplicity and security of a standard investment contract
    If in the past you dabbled in investment in companies, you are certainly acquainted with the amount of resources that investments of these kinds gobble up: The great amount of time spent in reading and understanding the agreements, conducting protracted negotiations about details of the transaction the large sums of money that you have spent on a battery of lawyers and accountants and so on and so forth. All these are a thing of the past.
    At ExitValley we have taken the leading lawyers in the field, and together we have created a uniform legal infrastructure of binding standards, the main aim of which is placing emphasis on the simplicity of the procedure and preserving your rights as investors.
    It has never been so simple and safe to invest in startups.
    For further information
  • Transparency also after the fundraising 
    After the fundraising has been successfully completed, a special field will open on the platform for the company after the fundraising. This field will only be available to investors in the company and its aim is to facilitate the management of the connection between the investors and the company. Relevant notices, invitations to shareholders meetings, performance reports that the company is committed to etc. shall be published in this area.
  • Liquidity
    Until now, the absolute majority of the investment contracts bound the investors to companies and did not allow them to sell their shares if they so wished and when they had found a purchaser. At ExitValley you may sell your shares, starting from 3 months after the purchase date, if you have found a purchaser, simply and speedily. Beyond this, after the investment and receipt of the shares, you may note whether you wish to receive offers from purchasers, and if there are any – they will contact you directly. In this way you can if you wish shorten your path towards the exit.
  • You are not alone
    We supply you with the best tools to assist in making a wise investment: All the company's relevant data is displayed on the platform in a convenient and friendly way, you can contact the entrepreneurs and ask all the relevant questions concerning the investment, consult with other investors on the platform, follow leading investors, and share interesting investments.

 

Any person over the age of 18 can invest via ExitValley and become a shareholder in Israeli startup companies and small businesses.

Our investors can be divided into 3 main groups:

  • Israeli citizens.
  • Israeli investors/corporations who are defined by the Securities Authority as "accredited" investors.
  • Foreign investors.
    United States citizens who are defined as accredited investors in their own country.
    European Union citizens.

It has never been simpler to invest in startups:

A. Look for investment opportunities and choose the campaign that interests you. Pay attention, every campaign is defined in time, when the maximum time span is 75 days.

B. Decide how much you want to invest and see how many shares you will receive in return.

C. Press the investment button, your place in the investment will be saved and you must transfer the money within 3 days.

D. After the payment, your money will be transferred to a trust account which will be opened especially for the fundraising company, and it will be kept there until the company reaches the funding target. We do not permit partial fundraising, because we wish to ensure that your investment serves the company only in accordance with the predetermined budget and targets.

E. The transaction will only go ahead after the company has reached the funding target and has approved you as investors – your money will be transferred to the company and in return you will receive your shares, if not, your money will be repaid in full.

F. After the fundraising has been completed, a special area will open on the platform for investors' contacts with the company, there you can get updates about what is going on in the company and exercise your rights as shareholders.

You can transfer the money to the trust account via a bank transfer or credit card.

No. After you have transferred the money and you have been approved as investors by the company your decision is binding. However,
if the campaign of the company you have invested in has not reached its funding target your money will be repaid in full.

The usual exit possibilities are:

  • An "exit" transaction – This term, which is common in the hi-tech industry, relates to the sale of startup companies, for the most part large global companies that wish to combine startup products with their products. The average period of time required from the moment of formation until the sale takes about 5-7 years. In transactions of this kind the share price on the sale is significantly higher than the share price during the previous fundraising stages.
  • A personal sale of your shares – If you wish to sell your shares and you find a purchaser for them, you may do so, starting from 3 months after the purchase date, and realize the shares in accordance with the transaction you make between yourselves.
  • A public issue (IPO) – A public issue is a transaction where the company's shares are offered for sale to the general public at the Stock Exchange. In a transaction of this kind, the shareholders can sell / keep their shares. For the most part a company who issues its shares increases its value and its shareholders enjoy this increase in value.
  • The distribution of a dividend – A payment made by the company to its shareholders, generally as a distribution of profits. Nevertheless, it should be pointed out that for the most part the distribution of dividends by startups during the early stages is not common practice.

Yes, as long as you find a purchaser for them.

Until now, the absolute majority of the investment contracts bound the investors to companies and did not allow them to sell their shares if they so wished and when they had found a purchaser. At ExitValley you may sell your shares starting from 3 months after the purchase date, if you have found a purchaser, simply and speedily. Beyond this, after the investment and receipt of the shares, you may note whether you wish to receive offers from purchasers, and if there are any – they will contact you directly. In this way you can if you wish shorten your path towards the exit.

ExitValley provides a platform for brokerage between vendors and purchasers of securities. ExitValley is not a party to the transaction. It is the purchaser's liability to examine the vendor's reliability.

When a potential purchaser wishes to purchase shares, the parties conduct negotiations, after they have agreed upon the terms, the other shareholders are given an opportunity to take advantage of the right of first refusal and purchase the shares by themselves. After the identity of the purchaser has been decided upon, the company must approve the sale and then the transaction will go ahead, after it has been completed the company's register of shareholders will be updated.

Yes. We provide a variety of possibilities for making contact with the entrepreneurs.

Yes. You will receive an update about the campaign's changes in status.

If you wish to be updated about the fundraising process on a day-to-day basis, all you have to do is to visit the campaign page.

Investments in companies in the early stages, with a limited history of activity, involve significant risks. You must be aware of the fact that you are willing to take the economic risk of the loss of your entire investment. These risks include inter alia:

  • No public market presently exists for the shares you purchase via the platform, and it is not promised that such a market will ever be established. Therefore, it is possible that you will not be able to sell your shares or find purchasers for your shares.
  • Companies in the early stages rarely pay dividends to their shareholders. This is because they prefer to invest their profits at the start of their path in the development of the company. The companies have no obligation to pay dividends to their shareholders, which means that it is not reasonable that you will see a yield on your investment until you sell the shares.
  • Your investment is likely to be subject to future dilution when the company issues additional shares. If you do not participate in future rounds of fundraising, the percentage of your holdings in the company will be reduced when the company issues additional shares.

Spreading out risks, which means spreading out your money over a variety of investments with the aim of reducing the risk. In investments in startups it is recommended to spread out risks and not to invest all your investment funds in one basket.

Every company that raises money at ExitValley has undergone a process of basic checks. These checks include: Legal checks, background checks for the entrepreneurs and additional checks for the company. The purpose of this procedure is to monitor and neutralize frauds as far as possible. Likewise, to reduce the level of uncertainty in the investment for the investors.

No, but ExitValley allows you to put forward offers for the purchase of shares from the new shareholders who have invested in companies and who are willing to accept offers of this kind.

Entrepreneurs who create a fundraising campaign at ExitValley are required to provide investors with the following materials:

  • Details of the company
  • A business plan
  • The company presentation
  • Budget
  • Details about the entrepreneurs and their communities

 

  • The entrepreneurs are subject to a reverse shares maturity mechanism the aim of which is to ensure that the entrepreneurs remain in the company. According to this mechanism if the entrepreneur leaves the company after the fundraising, a large part of his shares are taken away from him and they revert to the company.
  • Significant changes in the company, such as a salary increase, will require a majority resolution of the unconcerned shareholders.
  • The companies are obliged to present their investors with audited annual reports and quarterly updates.
  • Investors have the right to tag along – this mechanism defines that the investors shall be entitled to participate in any transaction for the sale of shares in the company by any of the founders, and all subject to what is stated in the regulations.

 

Yes. ExitValley's platform allows investors to consult  with other investors on the platrorm, to follow and share, and see which companies the public supports.

Israel, which is known as the startup nation, is a world innovate superpower. Despite Israel being a small and young country with only 8 million citizens, its hi-tech industry is considered to be the second best in the world after the United States. Below are some stats:

  • 772 – the number of exits during the last decade.
  • $53 billion – the value of the total exits during the last decade.
  • $70 million – the average value of an exit during the last decade.
  • $212million - the average value of an exit in 2014.
  • Every $1 that was invested in hi-tech during the last decade repaid an average of $3.

For further details - see why Israel

 

No, ExitValley's campaign managment fee is only charged on the fundraising companies.

Entrepreneurs   

The lack of accessibility to capital at the start of the road is the biggest obstacle that prevents companies succeeding. The possibilities presently available for the entrepreneurs are very limited: The State does not meet the demand, the venture capital funds hardly invest in companies at early stages, the institutional bodies are not involved and the banks do not provide financing.

Crowdfunding opens up a new funding alternative for the entrepreneurs in that it turns everyone into potential investors and creates an unlimited source of investors. The main advantages in crowdfunding are:

  • Crowdfunding allows everybody the opportunity to obtained funding for their company.
  • A fixed and predetermined raise, when the fundraising time is limited and there are no negotiations about the conditions.
  • Presently, success in crowdfunding creates many echoes, enhances the company's reputation, and opens up for you doors that until now were closed before you.
  • The process of creating the campaign is quick and simple.
  • Crowdfunding significantly reduces the fundraising process and frees up for the entrepreneurs the time to promote the idea, the product and the company.
  • Allows entrepreneurs to keep the company's reins in their hands.

 

  • Stop wasting time and dragging your feet – with us the investment raising process is integral, quick and simple. Within a maximum of 75 days you will know whether you have succeeded in raising the money when the conditions are also already known in advance.
  • A simple way of exposing your company to many potential investors: Relatives, friends, close communities, the communities of your communities, investors from Israel and investors from abroad.
  • The potential of your investors has grown, because with us it is also possible to invest small sums of money.
  • We supply you with an inclusive business and legal infrastructure which has been built together with one of the leading law firms in the field of startups: Naschitz Brandes Amir. Presently, for the first time in Israel, the method of communication between the companies and the investors has been regulated, and thereby we have created uniform and fair rules of the raise which have done away with the need for prolonged negotiations and have made the whole fundraising process easy and simple: - A set of company formation documents – for entrepreneurs who have not yet incorporated.
    - The company's Article of Association, Founders Agreement, Investment Agreement and more.
  • A special infrastructure for managing the relationship with the shareholders after the fundraising.
  • If you have raised money at ExitValley, this generally means that several investors have voted with their pockets that you are going to be the next big hit. Is there any better stamp of approval than that? In addition each one of your investors now has an interest in your success. You can avail yourself of them and their connections.
  • Fundraising from a variety of investors allows you to remain at the helm of your ship and continue to steer it to the destination you aspire to reach.

 

No, ExitValley allows you to create a fundraising campaign even if your company has already been incorporated or not yet incorporated. If your company is incorporated all you have to do is to adapt it to ExitValley's standard regulations. If your company is not incorporated you can form it after your fundraising campaign has been successfully completed. In such a case we can supply you with all the necessary documents.

In order to create a fundraising campaign for your company, the following materials are required from you:

 

  • Details of the company
  • A business plan
  • The company presentation
  • Budget
  • Video clip

We recommend that you attach any other relevant document and material that are likely to increase the chances of your fundraising, such as: accompanying video clips, news items, photographs, sketches and so on.

 

  • Create a well thought out fundraising campaign – the more well thought out and high quality your fundraising campaign, the greater your chances of success in raising the money.
  • Invest in a video and pitch – these are your visiting cards and the first details the investors will be exposed to.
  • Bring loads of charisma – remember that people invest in people.
  • Make a buzz – update in the social networks, enlist your friends and family, upload accompanying video clips, issue press releases, promote news items about the product and the company, launch events, send newsletters, take part in conferences, set up webinars, and just do everything you think can promote your objective.

For further details go to:

- The ExitValley Guide for Entrepreneurs
- Indiegogo's Webinars

 

The fundraising process has never been so simple:

A. Create a fundraising campaign on the platform – define the funding target, the percentage of shares allotted, the duration of the campaign and more.

B. Upload a video clip, business plan, presentation and budget.

C. Sign the legal documents, pay the handling fees and press the campaign submission button.

D. Receive confirmation or feedback.

E. After you have received confirmation, launch the campaign – make a lot of noise, bring friends and family, attract investors, approve them and reach the funding target. If your campaign does not reach the funding target, all the money that has accumulated shall be repaid to the investors and the shares will remain in your possession.

F. When you have reached the funding target you will be able to receive the money. If you have an incorporated company you will be required to adopt ExitValley's regulations in order to complete the fundraising process. If you have not yet formed a company you should form it before receiving the money, we shall provide you with all the necessary documents.

G. After the fundraising process has been completed a special area will be opened for you on the platform to manage the relationship with your investors. There you will be able to convene shareholders meetings, issue updates etc.

 

  • The lower threshold for fundraising is $25,000.
  • The upper threshold for fundraising is $1,000,000.

 

The company regulations and the investment agreement define your obligations vis-à-vis your investors. Duties to report to the investors following fundraising, presentation of the budget and compliance with targets etc. may be found among these obligations.

For further details please see the Investment Agreement and the Articles of Association

Beyond this, we recommend that you stay in constant touch with your investors, and we provide you with a simple way to do this. Every company that has raised money will be given access to a unique area in the platform for investor relationship management. In this area you will send your investors the reports you are obliged to provide pursuant to the Articles of Association and the Investment Agreement. You will also be able to publish notices and conduct the day-to-day management vis-à-vis the shareholders, such as arranging shareholders meetings, votes etc.

 
סבבי הגיוס באמצעות פלטפורמת אקזיטוואלי מתבצעים בהתאם למודל של פטור מחובת פרסום תשקיף לפי סעיפים 15א(א)(1) ו-15א(א)(7) לחוק ניירות ערך, התשכ"ח-1968. במודל זה, בכל סבב השקעה חשיפת מידע מפורט על ההשקעה ועל החברה מוגבל ללא יותר מ- 35 משקיעים שאינם משקיעים כשירים וסבב ההשקעה איננו במתכונת של רכז הצעה כהגדרתם בחוק ניירות ערך.
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