Copenhagen-based investment platform DealCircle announced today it has raised $750k (€ 550k), with some impressive names on the list. It aims to slash the legal fees racked up in early stage investments in startups, ensuring that entrepreneurs can keep hold of as much of their funding as possible.
DealCircle, a members-only investment platform, came together at Startupbootcamp in Copenhagen in October 2013, and launches worldwide today. The service allows private investors to present, validate and execute their investments and monitor their portfolio effectively. It also significantly reduces the end-to-end investment process, meaning it can take days or even hours instead of weeks, and at a fraction of the cost for the investor and the entrepreneur.
Heavy names involved
DealCircle has managed to attract heavy names to it’s organization. Alexander Aghassipour, co-founder of Zendesk is one of the investors, and Didier Rappaport, co-founder Dailymotion sits on the board of directors. The team has also garnered investment from SEED Capital, Klaus Nyengaard (former CEO of JustEat) and several lawyers, bolstering their law credentials. The new funding round will allow the team to focus solely on product development, working closely with customers on creating a superior user experience and to get deals done.
“The days of founders losing 10% of their funding as fees are over” says co-founder Lars Buch.
The team behind DealCircle has a lot of credentials – being Lars Buch and Bertrand Bisson. Both serial entrepreneurs and have a mix of legal and tech experience. Lars Buch was previously head of Nokia Smartphones in Denmark, and recently Startupbootcamp Mobility. Bertrand created the radically different legal model, validated through an international partnership with law firm Bird&Bird, by spending two years studying the 28 different legislations for investments across the EU.
“Investments still feed a greedy ancient legal system, but the world is ready for a serious overhaul” says Bertrand.
An EU alternative to angellist
A startup can be invited to DealCircle by a ‘lead angel’, who acts as an ambassador and promotes syndication. This meets the needs of business angels who requested that DealCircle remain an exclusive platform, favoring quality over quantity. There are also plans in the pipeline for a mobile version, so that angels can manage their investment portfolio on the go.
In contrast to Angellist Syndicates, DealCircle is not as much for business angels finding each-others or about following one famous investor. Rather it is a private and exclusive network where the lead business angel initiates the deal with actual peers that he knows and has invited to the deal. It is rather like a digital business angel club. Angels can also search in their circles for very specific skills needed to secure a success with startups they invest in – a way to also enable “smart money” for deals, and not just the investment itself.
But the main difference between DealCircle and Angellist is on the legal side. All the paper work is actually being executed at a fraction of the cost and adjusted to the 28 different existing regulations in EU.
“We have created the platform so the members are invited with each deal, thereby securing that its an exclusive network of active angels actually doing deals.” says Lars.
What do Business Angels and investors think?
Hampus Jakobsson, probably the most active business angel in the region:
“Since TAT was acquired, I have invested in over 25 companies and at my own company, Brisk.io, we took in 14 angels. There have been times when the process and attorney costs for making an investment have been so big or time-consuming that the investment did almost not happen. DealCircle will be fantastic for both angels and startups in Europe.”
“Angel and seed funding processes haven’t changed for decades. DealCircle is not only a good business idea, but something I hope can support the European tech startup ecosystem by making these processes run more smoothly”.
Niels Vejrup Carlsen, from SEED Capital:
“DealCircle has a unique business model that taps into a strong trend in the investment market, and it is essential for us at SEED to adapt to this. They have a kickass team and we have great expectations for them”.
You can request an invitation to join at dealcircle.co.