There is nothing sexy about being a startup entrepreneur when your TV is in a pawn shop and you’re living on coffee in your mother’s basement and burning the midnight oil night after night. 

“Amazing idea!” celebrated an angel investor
“We are definitely interested,” a VC said. 

“We’ll get back to you next week,” a fund promised.
And they all said the magic word: “MAYBE.”

A ‘Maybe’ is not a ‘NO’. That’s how you comfort yourself and keep going. But a ‘maybe’ does not pay the bills. Weeks pass. Your amazing idea that everyone loves is about to fizzle out without funding. But none of the ‘maybes’ are turning into ‘yeses’.
Welcome to the Valley of Death.

Any entrepreneur knows that sufficient funding is the backbone of a start-up’s business success. The process of acquiring enough funds can be more complicated than it sounds.”It is estimated that 90 % of startups fail, and one of the main reasons is lack of funding.”

In many cases, funding can make or break a start-up. And while the process of acquiring funds may seem daunting at first, there are many options available. You could go the old school route and secure a loan from the bank. Or you could try the more modern option of crowdfunding online. All of these are viable options to ensure you have enough money to lift your business off the ground. 

Fundraising Options for Start-ups

Many remote fundraising options exist, but not all options will be right for you. Here are some options for you to explore. 

Find an Angel Investor

An Angel Investor is a person or group of people with substantial funds and a willingness to invest these funds as capital into your business. An angel investor will want to scrutinize your business proposal and understand the ins and outs of your future plans. They can also offer mentorship on certain business problems and might help to strengthen your plan, generating larger future profits. 

Find a Venture Capital Fund 

In 2015, a brilliant idea attracted the attention of the Silicon Valley Venture Capital crowd and by May of that year, $100 million was invested into making the idea a reality. This was, of course, Uber. Uber was a simple yet brilliant start-up with great growth potential – and it was spotted by the right people at the right time. Venture capital funds are managed by business experts who have a keen eye for large growth potential. Once partnered with the business, they pull in other investors to grow the business even more. They also offer mentorship and expertise that can drive your profits further than you could have imagined. The downside? They tend to want proven levels of business stability, and if your business does not have this, they are unlikely to invest.

Crowdfunding

Crowdfunding is another option, and now it’s more popular than ever. Platforms like FundedByMe MENA are a fantastic way of raising funds if other avenues do not feel suitable. The aim is to pitch your business to the general public, giving them reasons why your business is needed right now. Any private person or major investor can donate to your business through platforms, and results vary depending on how much interest your business gets.One example of crowdfunding success is that of 3Doodler, a product that allows people to draw in 3D. In the first 34 days of crowdfunding, they raised more than $2 million

There are thousands of crowdfunding platforms, each offering slightly different terms. For example, FundedByMe MENA uses two kinds of crowdfunding campaigns: public and private, which are mainly targeted to major investors, and some sites take an ‘all or nothing’ approach, expecting you to meet your milestone in order to receive your funds. Other sites offer some flexibility on how and when you withdraw funds from the site. It is good to investigate the terms and conditions of multiple crowdfunding sites before committing to one. 

Microfinance 

If you cannot find an investor and do not think you’ll be eligible for a bank loan, you can access capital via microfinance. When using microfinancing you dodge banks entirely and gain funds from micro-finance institutions like Non-Banking Financial Corporations (NBFCs). These institutions are more likely to give you funding if you have poor credit or limited assets. While the loans are modest, they may be all you need if you have a smaller start-up. 

Family and Friends

If none of these options seem to be working out for you, you could ask outside your professional networks, instead of turning to your personal connections, your friends and family. This can be a great option because it’s faster and easier than attracting angel investors or securing loans. Your friends and family will also be investing in you because they already know and trust you, and by extension your cofounders. This gives you and your co-founders more control over decision-making at an earlier stage, but you do have to take into account that unless your friends and family are experienced investors or in banking that they may be less familiar with certain investment principles such as dilution, which will be important if you need to attract bigger investors moving forward.

Get out there and secure funding for your start-up

Now that you are aware of the options available to you and know more about the process you must go through, it’s time to get out there and secure funding for your start-up. Don’t let your business be one of the 90% that fail before it’s had a chance to flourish. Proper funding is the building block you need to achieve optimal business success. Here are three initial steps that you can take today:

  1. Decide how much funding you realistically need. You might find it easier to map out the next 3-5 years of business activity you want to achieve and cost each one individually. 
  2. Research the best type of fundraising for your business. The amount you need to raise and the terms you’re willing to settle on are important factors for consideration. 
  3. Draft out an initial business funding proposal explaining what your business is, why you need funds and what your business goals are. It might help to write a couple of drafts before settling on one. You should also ask a friend or colleague to proofread this. 
  4. Get ready for due diligence. Being ready gets the money to your bank account faster – and helps you to defend your company’s enterprise valuation –meaning  more money for less shares!

 

DD-Ready is the smartest and largest due diligence ecosystem in the world. It ensures start-ups and scaleups close funding rounds faster. To learn more about DD-Ready, click here to sign up for a demo with the DD-Ready team.

FundedByMe MENA and DD-Ready have signed a partnership agreement today. They join forces to help start-ups close funding rounds successfully and to help investors make decisions informedly. An excellent synergy between the region’s leading equity crowdfunding and due diligence platforms now available to our MENA clients.

FundedByMe MENA has been searching for a solution that helps clients streamline the due diligence process and structure investment decks to help close funding rounds easier, faster and more transparent. In today’s investment climate, fundraisers need to report and present business data in a more structured and effective manner; while investors require an efficient and more transparent method to analyse such data to make informed investment decisions; no room for vague, fragmented and time-consuming proposals any longer.

Now, DD-Ready and FundedByMe offer the exact solution to fulfil both fundraiser and investor needs. Our intuitive tool ensures investment targets and opportunities are DD-Ready!

FundedByMe MENA’s Founder and Managing Director Samer Toukan states:

– FundedByMe applies a thorough onboarding process to all clients participating through its platform, often a demanding and time-consuming procedure. Together with DD-Ready, we can now automate and standardize this process to ensure that start-ups on FundedByMe platform are ready for investor due diligence, with well-structured investment proposals and transparent campaign information. It is an excellent opportunity for DD-Ready and FundedByMe to create a real difference in the UAE and MENA crowdfunding space!

DD-Ready’s CEO, Co-Founder Heikki Kauppinen is excited to be collaborating with the leading crowdfunding platform in the region: 

– Working with such enthusiastic people as Samer from FundedByMe is fascinating – and being able to support his tremendous efforts in the region with our DD-Ready platform is a tremendous opportunity as well as a great pleasure. Together I am sure we can really make crowdfunding in the region fly!

More about FundedByMe MENA

 

For further information, please contact :

FundedByMe Inquiries:
Samer Toukan
s.toukan@fundedbyme.com

 

DD-Ready Piloting Inquiries:
Kim Sahlstedt
kim@dd-ready.com 

DD-Ready Media Inquiries:
Sharmili Ganguly
Sharmili@dd-ready.com

DD-Ready is expanding its partner network in the Nordics and adds top tier IP expertise DD-Ready is proud and happy to expand its partner network in the Nordics with Papula-Nevinpat.

Papula-Nevinpat is one of the largest trademark, design and patent agencies in Finland. The company is an expert in IP protection with over 40 years of experience, including a strong history of more than 20 years in international markets. They serve hundreds of customers ranging from startups to global Fortune500 companies. Papula-Nevinpat is your portal to the Russia-Eurasia region, Europe, China, and the USA.

Papula-Nevinpat is always looking for new and innovative ways in which to support its clients throughout their growth journey.

– DD-Ready is a great opportunity for us to extend out support even further and more effectively throughout the startup and SME sector. We look forward to what being part of this expanding ecosystem will bring with it’, says Markku Simmelvuo, Managing Director, Papula-Nevinpat.

DD-Ready’s CEO, Co-Founder Heikki Kauppinen is excited to join forces with the leading IP portal of the region:

– Including Papula-Nevinpat’s depth and decades of experience into the DD-Ready ecosystem is an honor. Expanding our network with such a highly recognized partner shows how DD-Ready can support all stages of companies in their due diligence needs. 

More about Papula-Nevinpat.

For further information, please contact:

Papula-Nevinpat enquiries:
Markku Simmelvuo
markku.simmelvuo@papula-nevinpat.com

 

DD-Ready Media relations:
Sharmili Ganguly
sharmili@dd-ready.com

DD-Ready Piloting opportunities and Investor Relations:
Heikki Kauppinen
heikki@dd-ready.com

Helsinki Fintech Farm has been searching for a solution that would help its over 90 member companies streamline their due diligence process in order to structure their data, and help close funding rounds faster. Now with the current financial climate requiring both fundseekers and investors to not waste any extra time on funding rounds, the need for an intuitive tool that ensures investment targets are DD-Ready, has become only more relevant.

Now with a number of fundraising and matchmaking events having gone digital, Helsinki Fintech Farm selected DD-Ready to ensure any of its companies that are currently fundraising are actually ready to take on investment. Helsinki Fintech Farm’s Director Janne Salminen states:

– Helsinki Fintech Farm is excited to be using DD-Ready as its due diligence platform for all Fintech’s that are part of its Deal Flow program. The platform adds serious value to our ecosystem and will certainly help close funding rounds faster. And in these uncertain times, closing funding rounds fast is exactly what is needed. Anyone seeking to raise funds should be using DD-Ready.

DD-Ready’s CEO, Co-Founder Heikki Kauppinen expresses his excitement for collaborating with the leading Fintech organization in Finland and states:

– Having Helsinki Fintech Farm select us as their due diligence platform is great validation for the
amazing work our team has been doing at DD-Ready over the last few months! I look forward to
onboarding the companies in the community and adding serious value to the ecosystem as a whole.

More about Helsinki Fintech Farm.

For further information, please contact:

DD-Ready Piloting inquiries:
Kim Sahlstedt
kim@dd-ready.com

Fintech Farm contact:
Emmi-Julia Tiitta
emmi-julia@hub13.fi

DD-Ready  – Media inquiries and investor relations:
Heikki Kauppinen
heikki@dd-ready.com

We’ve all heard stories of working in a startup: constantly balancing on a fine line between proactively seizing opportunities and chaos. I guess startup entrepreneurs are busy working 80-hour weeks while trying to avoid a 40-hour grind. Sometimes it makes me think that there would be much easier and secure ways to earn a living, but at the end of the day, it’s that vision of enabling real innovations – and to be honest, making some money while changing the world – that keeps us going.

I am a customer-first type of guy, so I guess it’s just second nature but most mornings my work starts well before breakfast. The first thing I do when I open my eyes is check my email and any support tickets that came in overnight. I handle all questions from customers and partners as I drink my coffee and eat a hearty breakfast. Then I kiss my wife and kids goodbye and head to the office for another day of onboarding new clients and partners, demoing our product for prospective customers and collaborating with our CTO Reggie and dev team with the aim of creating the most enjoyable user experience for entrepreneurs doing the ‘boring corporate stuff’, and preparing for due diligence.

I am not even on the metro yet when a call from our CEO turns my schedule upside down with the regular stuff; onboarding a new partner (‘Can we do it within next 48 hours?’), a bunch of ideas for new system features (‘We should have these done by the time the pilot begins.’) and demoing the system to a potential  investor (‘This is a priority”). 

By the time I reach the office, I’m ready for my normal juggling of scheduling interviews for a new Partnership Excellence Manager for our booming MENA operations (and sifting out the best candidates from among 350+ applicants), pushing customer care tools while setting up calls for onboarding and demos, in addition to altering my workflow to suit remote work for the time being. In between these I’ll need to have regular technical meetings, convey user feedback on product development and feature testing, as well as follow-up with existing clients and partners.

As a company we were not “born yesterday… “ seriously! In a startup’s “run or die” environment three years may as well be a light years’ worth, at least in terms of technical development, building business structures – and of course money to keep doing the work we’re doing. In summer 2017, DD-Ready was nothing more than two co-founders, a pitch deck and a rough (but operational!) PHP model of what would become DD-Ready. I’ve been lucky enough to be part of this journey almost from the beginning, so I’ve seen the tough parts as well; ‘the valley of death’ as they say. Struggling with the tech team and trying to roll out the MVP in time, while our co-founders drummed up the support of countless investors – and returning home with ‘definite maybes’ while spending the night staring at the bank account that was emptying with a frightening pace.

We really believed in our vision so after a while we found other people who did too. Now we are a team of seven (soon to be eight!) people with a fully functional due diligence ecosystem of several global partners and hundreds of users! 

But still, our journey has just begun; we’ve just launched another funding round, and our seed round is so different from pre-seed: we now have a real, live product, actual users, top-notch partners – and strong traction to show. 

Still it’s not easy. But if it were easy, everyone would be doing it, right? Fortunately we are ready for due diligence a.k.a. DD-Ready! 

– Kim, Head of Customer Ops @DD-Ready

 

DD-Ready is launching yet another new international partnership: Early Metrics is a rating agency specialized in carrying out enterprise evaluations for early stage companies. 

Early Metrics operates across Europe and MENA markets and has offices in the UK, France and Israel. The company’s Senior Business Development & Partnerships Manager UK & International, Jordan Fletcher states:

Early Metrics rating methodology assists investors, whether VC, Angel, Institutional, or Corporate, in their due diligence activities through analysing qualitative and quantitative data. We are excited to partner and join the DD-Ready ecosystem and be a part of their ecosystem, as it’s an amazing opportunity to expand our network and continue to build up from the over 3500 company ratings we’ve done so far. Having worked closely with both startups and investors on their due diligence process we see DD-Ready’s approach as an effective and efficient innovation within the space and we are excited to support the journey. 

DD-Ready’s CEO, Co-Founder Heikki Kauppinen states: 

– Our aim is to create an offering that helps making good decisions, mitigating risks and detecting companies’ true business potential. Hence Early Metrics’ growth potential evaluation process and service is a perfect fit to DD-Ready’s ecosystem to support our investors in benchmarking and gaining further insights into their investments.

More about EarlyMetrics: https://earlymetrics.com/

More about DD-Ready™: www.dd-ready.com

 

For further information, please contact: 

 

Media inquiries:

Janiina Kauppinen

janiina@dd-ready.com

 

Piloting opportunities and investor relations:

Heikki Kauppinen

heikki@dd-ready.com

DD-Ready was selected out of 450 companies globally to take part in Cohort 2 of Startupbootcamp’s highly competitive Fintech accelerator program running out of Fintech Hive at DIFC in December 2019. The currently ongoing Fintech program has opened and facilitated valuable business opportunities in Dubai (UAE) and Riyadh (Saudi Arabia) for DD-Ready and other startups who are also participating in the program. 

And with 2 weeks until Demo Day, DD-Ready is ready to establish several pilots and collaborations with global entities, like their collaboration with Startupbootcamp, where the COO of Startupbootcamp MENA and Russia, Ibrahim Seksek expressed his excitement about using DD-Ready as a tool to onboard companies in Startupbootcamp’s programs and he states: 

– We have already started using DD-Ready to onboard Startupbootcamp Fintech companies and Startupbootcamp Smart Cities program is next. DD-Ready makes our process significantly more efficient and brings value to all startups applying and participating in the program!

DD-Ready’s CEO, Co-Founder Heikki Kauppinen expresses how thrilled he is that he is collaborating with a notable and global organization like Startupbootcamp and states: 

– Startupbootcamp is a global organization with over 20 industry-focused programs all over the world! We are dedicated to expanding collaboration and creating value to thousands of applicants from all over the world! 

More about Startupbootcamp: https://www.startupbootcamp.org/

More about DD-Ready™: www.dd-ready.com

 

For further information, please contact: 

Media inquiries:

Janiina Kauppinen

janiina@dd-ready.com

 

Piloting opportunities and investor relations:

Heikki Kauppinen

heikki@dd-ready.com

DD-Ready is making a splash in the MENA area. 

From 450 companies from around the world, DD-Ready was selected to participate in an accelerator program called Startupbootcamp Fintech in DIFC, Dubai. Heikki Kauppinen, CEO and Co-Founder of Diligent Solutions, the company behind DD-Ready™, states:

– DD-Ready is here to stay! The currently ongoing program has opened us a tremendous amount of opportunities in Dubai (UAE) and Riyadh (Saudi Arabia). With only 1/3 of the program behind us, we are about to establish several pilots and collaborations with global entities. 

A significant step in establishing the business in the area is a partnership with Rethink. Rethink is providing professional modern outsourced accounting, VAT, HR and auditing services, as well as strategic business support to their clients throughout the UAE. They add significant value to the SME ecosystems by empowering entrepreneurs to realize their goals and long-term aspirations. 

 
Kauppinen from DD-Ready is delighted about the announcement:

– We are building the smartest due diligence ecosystem in the world and this top-class partnership on our key market area is important to us! Rethink has a modern approach to financial services and DD-Ready is a perfect fit for creating additional value to their Rethink clients.

Rethink sees a great potential of the collaboration. Company’s Managing Partner Gregory Shippee states:

– Rethink is an embedded and well recognized business service supplier in Dubai and the wider UAE SME business community. Our partnership with DD-Ready enables us to add even more value to our existing and future clients through the adoption of relevant powerful tools and technology.

 

More about Rethink http://rethink-hq.com/

More about DD-Ready™: www.dd-ready.com

 

For further information, please contact: 

Media enquiries:

Janiina Kauppinen

janiina@dd-ready.com

 

Piloting opportunities and investor relations:

Heikki Kauppinen

heikki@dd-ready.com

DD-Ready and AskKauko have announced that they will begin cooperation in order to make sustainability and impact a measurable key performance indicator of business development and growth.

The collaboration will work on two fronts: On the platform side, both companies offer tools and services for building business structures around sustainability opportunities identified by the AskKauko platform. The other front addresses the growing need to develop measurable KPI’s for sustainability and impact, and thereby make corporate social responsibility a significant factor in determining companies’ enterprise value as part of their M&A processes.

– When building globally business opportunities and overcoming barriers to working together, shared tools, rules and processes, are needed. For that kind of transformation, standardization and automation are the way to go, states Heikki KauppinenCEO and Co-Founder of Diligent Solutions, the company behind DD-Ready™.

– Both companies believe in automation and measurability – and want to change the way we do business. That is a very inspiring basis for collaboration! states Klaus Matilainen, Co-Founder and CEO of AskKauko.

Diligent Solutions has re-invented the Information Request process of due diligence: DD-Ready (SaaS) is an intelligent data management platform built specifically for due diligence examinations as part of M&A transactions that provides automated (AI) qualitative analysis of documents based on verified market data. Diligent Solutions’ vision is the automation of the due diligence process.

AskKauko’s purpose is to increase the understanding of how to make the world more sustainable place. Helsinki-based software startup is developing a platform to connect the shareholders of sustainable development, increase their understanding about the impacts of co-operation to accelerate investments solving local and global sustainable development challenges.

More about AskKauko:
https://www.askkauko.com/

Klaus Matilainen
klaus@askkauko.com

More about DD-Ready™:
www.dd-ready.com

For further information, please contact: 

Media enquiries:
Janiina Kauppinen
janiina@dd-ready.com

Partnerships, piloting opportunities and investor relations:
Heikki Kauppinen
heikki@dd-ready.com

A team of Geniem’s digital application development experts will support the technical development of DD-Ready™, an automated data collection process for due diligence. 

The goal of cooperation is to accelerate development of DD-Ready to answer the growing market demand. Achieving DD-Ready’s ambitious vision to automate the due diligence process requires a strong partnership.

Heikki KauppinenCEO and Co-Founder of Diligent Solutions, the company behind DD-Ready, states:

– Developing a disruptive service like DD-Ready requires not only high-end technical knowledge, but also creative thinking and deep understanding of how to build SaaS services for tomorrow’s needs.

Tuomas KumpulaCEO of Geniem Oy, is excited about the collaboration:

– DD-Ready will disrupt M&A market. Building a new kind of tool for business is a great conquest – and we are happy to take on the challenge!

Diligent Solutions Ltd has re-invented the due diligence Information Request process: DD-Ready™ (SaaS) is an intelligent data management platform built specifically for due diligence examinations as part of M&A transactions that provides automated (AI) qualitative analysis of documents based on verified market data. DD-Ready’s vision is the automation of the due diligence process.

Geniem Oy is a digital application development agency that provides creative and quality driven digital service development. The company focuses on digital service design and application development. Geniem has been Deloitte Fast50 listed in Finland for two years in a row.

More about Geniem:
https://www.geniem.fi/in-english/

Tuomas Kumpula
tuomas.kumpula@geniem.com

More about DD-Ready™:
www.dd-ready.com

For further information, please contact: 

Media enquiries:
Janiina Kauppinen
janiina@dd-ready.com

Partnerships, piloting opportunities and investor relations:
Heikki Kauppinen
heikki@dd-ready.com

Diligent Solutions Ltd. announces a new DD-Ready™ partnership with an information security expert, Agendium Ltd. Agendium and DD-Ready have agreed to collaborate in order to make two central elements of the due diligence process as streamlined and efficient as possible. 

Where DD-Ready aims to automate the due diligence process and support its clients in becoming DD-Ready, Agendium has developed an outstanding tool for ensuring that companies are aware of their GDPR requirements as well staying GDPR compliant on a continuous basis.

Heikki KauppinenCEO and Co-Founder of Diligent Solutions, the company behind DD-Ready, states:

– Digital security and GDPR compliance are crucial and all the more relevant elements for every business. In addition to ensuring business continuity and managing legal risk, being compliant in these areas has a direct impact on a company’s enterprise value. The case law on GDPR cases and security breaches (and hefty fines) is already building up, as well as are the unfortunate stories where lack of compliance has destroyed entire companies that would otherwise have been profitable businesses.

Ismo Paananen, CEO of Agendium, states:

– Agendium products are designed to help with different challenges regarding the broad theme of digital security and GDPR compliance. Together with DD-Ready we are able to bring added value to digital-age due diligence!

Diligent Solutions Ltd has re-invented the Information Request process of due diligence: DD-Ready™ is an intelligent (SaaS) data management platform built specifically for due diligence examinations as part of M&A transactions that provides automated (AI) qualitative analysis of documents based on verified market data. Diligent Solutions’ vision is the automation of the due diligence process.

Agendium Ltd is a Finnish SaaS software company specialized in cyber security. One of the main products is called Cybercanvas (Digiturvamalli in Finnish), which 250+ Finnish companies of all sizes use as the central platform for their cyber security management and reporting.

More about Agendium and Cybercanvas (in Finnish)

https://www.agendium.com/
Ismo Paananen
ismo.paananen@agendium.com

More about DD-Ready™:

www.dd-ready.com

For further information, please contact: 

Media enquiries:
Janiina Kauppinen
janiina@dd-ready.com

Partnerships, piloting opportunities and investor relations:
Heikki Kauppinen
heikki@dd-ready.com

So, you’re thinking about investing in Initial Coin Offerings (ICOs). And you probably have more than a few questions. Where do you start? Welcome to our jargon-free beginner’s guide.

The future is already here

The world of investments is changing fast. Tech-savvy, early adopter investors are tapping into the advantages of modern investment alternatives. Alternatives such as ICOs. Are you ready to join them?

First things first. Take care.

It’s crucial that you understand the basics of ICOs. In general, developers, start-ups and individuals are using ICOs to raise capital for fair and lawful investment opportunities. However, ICOs have also been fraudulently used to entice investors in with the promise of high, unrealistic returns, leaving the victims high and dry.

In the still largely unregulated world of ICOs, due diligence and asset verification are key to protecting yourself from scams.

What is an Initial Coin Offering?

Just like Initial Public Offerings (IPOs), ICOs are used to sell a share of a company to raise funds.

In an ICO campaign investors buy a share of the issued crypto coins with another virtual currency or with fiat currency (traditional forms of money). These coins, also known as tokens, can – in general terms – be compared to the shares of a company sold to investors in an IPO.

ICO offerings give investors a stake in products or services which are typically yet to be created and launched. They offer investors the possibility of potential profit in exchange for risk and possible failure to deliver.

If the money raised does not meet the minimum funds required by the firm, the money is returned to investors and the ICO is deemed to be unsuccessful. If the funding requirements are met on time, the raised money is used to either initiate the project or to complete it.

The coins or tokens are automatically created, secured and disseminated by using smart contract technology and stored on to a distributed ledger, based on blockchain technology. (Part two of this guide will explain how smart contracts and blockchain work.)

What are virtual currencies, tokens and coins?

A virtual currency is a digital representation of value that can be digitally traded and functions as a medium of exchange, unit of account, or store of value. Virtual tokens or coins can also represent other rights. In some cases, tokens or coins are classified as securities. This means they may not be lawfully sold without registering with the local regulator of securities exchange.  

What is a virtual currency exchange?

A virtual currency exchange is when a person or entity exchanges virtual currency for fiat currency, funds, or other forms of virtual currency for an exchange fee. Secondary market trading of virtual tokens or coins may also take place on an exchange. In most countries, these exchanges are not registered and are not considered to be regulated exchanges. Therefore they do not have the same level of protection as publicly listed stocks.

In part two of our beginner’s guide we’ll examine other ICO essentials – smart contracts, white papers, regulation, and the underlying blockchain technology.

Now it’s over to you! What topics would you like to read more about?

Diligent Solutions Ltd. announces a new DD-Ready™ pilot customer, Tannerkoski Capital Ltd. – only a day after the launch of the latest version of DD-Ready™

Tannerkoski Capital helps small and medium-sized enterprises find suitable financing for their projects, product development, mergers and acquisitions, as well as equipment and growth financing. Jaakko TannerkoskiCEO and Co-Founder, states:

– Financial services need to transform in order to take full advantage of digitalization and maintain their competitiveness. DD-Ready™ has a new approach to building a fintech solution – and that is exactly what is needed. Also, we see great value in the increased effectiveness and transparency that DD-Ready™ will bring to our operations. We are looking forward to this collaboration.

DD-Ready™ is a collaborative tool designed to facilitate fast and effective due diligence. The platform also powers the third-party verification service Asset Verification Protocol. Diligent Solutions’ vision is the automation of the due diligence process.

Heikki Kauppinen, CEO and Co-Founder of Diligent Solutions, the company behind DD-Ready™, states:

– This new pilot is proof of the rapidly increasing interest in DD-Ready™ shown by companies of all industries and sizes. The opportunity to pilot our new system with real customers will translate into immediate benefits in terms of feedback and customer satisfaction. Real traction is achieved through practical collaborations such as this.

More about Tannerkoski Capital:

www.tannerkoski.fi (In Finnish)
Tannerkoski Capital LinkedIn

More about DD-Ready™:

www.dd-ready.com
DD-Ready LinkedIn

For further information, please contact:

Media enquiries:
Janiina Ojanen
janiina@dd-ready.com

Piloting opportunities and investor relations:
Heikki Kauppinen
heikki@dd-ready.com

Early launch exceeds all expectations

Diligent Solutions, the company behind DD-Ready™ and Asset Verification Protocol, has successfully launched the first commercialized version of DD-Ready™, the collaborative due diligence process platform.

Working to a tight schedule, the hyper-efficient team at Diligent Solutions went into production overdrive to ensure that the system would be ready for an October 2018 launch.

Key features

DD-Ready™ is a collaborative tool designed to facilitate fast and effective due diligence. The platform also powers the third-party verification service Asset Verification Protocol. Diligent Solutions’ vision is the automation of the due diligence process.

The DD-Ready™ system includes several key features:

Putting the user first

DD-Ready™ has been designed to optimize the user experience at every stage. A previous version of the system was piloted by RSM Finland, a member of the multi-national network of accounting firms. The feedback from this piloting stage has been crucial in the system’s ’s development.

Janiina Ojanen, CMO and Co-Founder of  Diligent Solutions: “An enjoyable user experience is not something complex systems usually offer. But this has always been our goal. That’s why the user experience has been at the core of our development. Due to our pilot with RSM Finland, we were able to use feedback from real users from day one.”

Teamwork integral to early launch

The tech innovators and customer care professionals at Diligent Solutions were determined to ensure the early launch of the DD-Ready™ system.

Heikki Kauppinen, CEO and Co-Founder of Diligent Solutions: “Our dedicated and talented team truly went the extra mile to achieve an early launch. The first commercial version of the system exceeds our expectations in all respects: the scope, usability and visuality are even better than we anticipated at this stage.”

Next steps

The successful launch of the DD-Ready™ system is a concrete step towards Diligent Solutions’ goal of automating the due diligence process by utilizing developments in AI and machine learning. It is proof that the Diligent Solutions team is ready for any challenge.

Customer piloting of DD-Ready™ is due to begin in November 2018.

For further information, please contact:

Media enquiries:

Janiina Ojanen, CMO and Co-Founder

janiina@dd-ready.com

Piloting opportunities and investor relations:

Heikki Kauppinen, CEO and Co-Founder

heikki@dd-ready.com

Corporate governance and due diligence are inextricably linked. Automation and digitalization are about to change both areas radically. What does the future look like?

Our Diligent Expert Panel is at the forefront of innovation. Tapio Nuotio, attorney-at-law, is one of these experts. We asked him about the future of corporate governance and what it takes to prepare yourself for a digitalized world.

How would you define good corporate governance?

In addition to the statutory demands and applicable by-laws, good corporate governance is about having the correct versions of files and documents readily available so that even third parties outside of an organization can find whatever they’re looking for. Everything should be in place.

Essentially it’s how a company organizes its documentation, files, agreements, and so on.

Why is this important?

It allows manoeuvres. Whether it’s financing, operations for strategy, or many other things, you need to take a look at what you’ve done in the past, what sort of liabilities you’ve got on your back at that moment. You need to find the papers.

Sometimes the occasions where you need to know where you’re at come at short notice. Then it’s of even more importance to be able find your papers in an orderly state and examine what you’ve done.

If you don’t know your current status, you can’t really take any steps forward with peace of mind.

Why is corporate governance overlooked surprisingly often?

Because it takes time and it costs money. It’s not viewed as an important thing at the moment deals are done or an agreement reached. The papers are usually left in a file somewhere, and the company turns to the next pressing issue.

How does good corporate governance impact upon the due diligence process?

It makes it faster, easier, and cheaper. Things that require due diligence usually come at short notice and they need to be carried out quickly.

It’s good to have documentation already in place before the process begins. Especially for companies that may not have dedicated people looking after documentation and corporate governance. Otherwise it can be a week of just going through emails, trying to find the latest versions of agreements.

What role can digitalization play in corporate governance and due diligence procedures?

Digitalization can help a company keep their documentation in an orderly and maintained state. It means you know when dues are due and when actions need to be taken. This is especially important if there’s no one inside a company who is able to constantly maintain the documents.

Doing this manually is very labor-intensive. Digitalization can help to make data, especially from within documents, easily sourced.

And can automation play a part?

When law firms carry out due diligence processes, every word of every document has to be read and understood by somebody. Say you have to go through a company’s employment agreements – that can be very repetitive.

I hope that automation will ease the burden of this labor-intensive and sometimes mundane work.

What will the future of due diligence look like?

Leaner, faster, and less labor-intensive when it comes to carrying out large due diligence processes. I can already see these trends developing today.

Thank you, Tapio!

It’s obvious – we can’t keep trying to make yesterday’s tools work in today’s constantly evolving world. But what’s the next step?

Our forthcoming posts will explore the future of corporate governance and due diligence, and how global trends are revolutionizing the business world.

Big question: Will digitalization transform corporate governance?

Tapio Nuotio, Attorney-at-Law: Mäkitalo Rantanen & Co Ltd, Attorneys-at-Law

– Graduated LL.M. 2013

– Specializes in corporate governance, mergers and acquisitions, investment agreements

– Wide experience in domestic and international M&A projects

– Co-founder of Blueworks Inc, an innovative company focused on carbon fibre products

The great crypto crash of 2018 shows no signs of slowing down. A few days ago, this year’s ‘crypto carnage’  became officially worse than the dot-com crash of the early 2000s.

The trading volumes of the entire cryptocurrency market have fallen by 80% since January.

This is in stark contrast to the golden days of 2017, when Bitcoin neared $20,000 and the entire crypto market cap was at $700 billion. So what went wrong?

Here are a few recent developments:

Reframing the narrative

And there’s another factor at play. Storytelling.

The dominant narrative around crypto in 2018 is one of failure, turmoil and hype. Market psychology is crucial to the mainstream adoption of cryptocurrency. In 2017 there was a lot of belief in the future potential of crypto. This year that narrative has shifted to fear, uncertainty and doubt.

Crypto is all about the future. Meaning it’s hard to visualize how value can be derived in the here and now.

Meltom Demirors, CSO of digital asset managers Coinshares, puts it like this: “Really the only metric we have for most cryptocurrencies is the price, and price is such an imperfect metric. What does actual utilization look like? That’s the struggle for crypto right now.”

Imagining the future

It seems crazy now, but you’d be hard pushed to find examples from past sci-fi films and TV shows of mobile phones. Not until they actually started being used in the real world, anyway.

This is similar to the state of crypto at the moment. It could revolutionize our world in ways that are not yet clear. And because they’re not clear, they’re hard to imagine.

Meltom Demirors again: “New technologies that shift the paradigm take a long time to really understand.”

Comparing crashes

This brings us back to recent comparisons of the crypto crash and the dot-com crash.

Let’s look at one of the survivors of that boom. Amazon. They scraped through the dot-com crash. Their shares plummeted. It took years for them to recover.

And recently they became the world’s second trillion dollar company. They’ve reshaped the very fundamentals of how we shop.

Looked at from this perspective, is the great crash of 2018 the best thing to happen to crypto? Could it be definitive proof that crypto and blockchain are not only here to stay, but that they could one day transform our lives?

Big question: will cryptocurrency survive the great crash?

In part two of our interview, Heikki Kauppinen, our CEO and co-founder, explains the moral imperative of automating due diligence processes, why there’s always room for further modernization in the digital age, and how employers can keep Generation Z happy.

Does every business require due diligence?

Yes. We speak about due diligence mostly in terms of mergers and acquisitions (M&A), as well as investments into companies. But you still need to carry out due diligence even if you’re not seeking investment or undergoing M&A . For example when your audits are done, then you need to have your documentation in place. When new board members join a company, they should require carrying out due diligence so that they know what they’re getting into in terms of personal risk.

What are the stages of a due diligence examination?

Again it depends on the context. For corporate investments and M&A, you have preliminary negotiations which lead to a term sheet. That’s similar to a letter of intent, with high level terms regarding the investment. Then the due diligence examination begins.

Has the due diligence process evolved over the last few decades?

Yes and no. The basics of the process are still much the same. The big change has been digitalization. For the last decade we’ve had virtual data rooms (VDRs). Those used to be actual rooms full of paper, where you’d enter with a notepad and pen and go through folders one by one. Now all documents are scanned, uploaded to a VDR, and a team can examine them from anywhere.

But there’s still a need for further modernization. VDRs have been built from the point of view of being a data dump through which we siphon. From a data protection point of view it doesn’t work. We need effective tools to ensure that teams going through big amounts of data are all aware of what each team member is doing, what is approved and by who and when. That’s the examiner’s perspective.

From the perspective of a company seeking investment, it’s important to know who has looked at what documents and where, and have an insight into how long and what the viewer focussed on. This all helps with negotiations.

So can automation help employees involved in due diligence examinations?

In my own experience of due diligence, I’ve discovered that a lot of one’s time is spent on simple and quite frankly boring tasks. Humans are far too intelligent to be carrying out mundane repetitive tasks. And having customers pay highly trained individuals to do these mundane tasks is really not where we should be in 2018.

Employee retention is one of the biggest challenges facing employers hiring millennials and Generation Z, because they’re so educated and so demanding. They’re not willing to carry out the grunt work that perhaps employees were willing to do in the past. They want to use the best possible tools to give them the best possible work experience. If we have highly trained individuals comparing columns and numbers, they’re not going to hang around for very long.

Thank you, Heikki!

Big question: Is automation a necessity or a luxury?

(Aaand the answer is: “We are not ready for due diligence.”)

Heikki Kauppinen is the CEO and co-founder of Diligent Solutions, the company behind the DD-Ready platform and the Asset Verification Protocol concept. He’s also an entrepreneurial lawyer with over a decade of experience in various aspects of due diligence.

In part one of our interview, Heikki explains the importance of due diligence, why time kills deals….and the thing that Elon Musk never wants to hear.

Hello, Heikki! First things first – what exactly is due diligence and why is it so important?

In essence it’s an examination of a target – usually a company. There is no single definition. A lot depends on the profession of the person using the term. Lawyers will be looking at legal matters, auditors and financial matters, human resources will be looking at employment contracts, and so on.

It’s carrying out the background. If an entity enters into a transaction without having carried out due diligence then they’ll be exposed to significant legal risk.

For example, the job interview process is very similar to a due diligence examination. You’re seeking info about the person, seeing if they’re a fit, if their references check out. Now imagine hiring someone without that process and the risk that would entail. That’s how important due diligence is.

What does being ready for due diligence mean?

It means that you are ready to commence the due diligence process. Why is that crucial? Over the ten years or so that I’ve been working with due diligence I’ve seen countless occasions where a company is seeking investment and a counterparty is willing to provide that investment. The counterparty wants to start the due diligence process. At this point the company seeking investment gets stuck. They realize that ten or even fifty documents are missing. Lawyers are waiting for those documents. The process stalls. And such a stall creates mistrust and often kills the deal. Being ready for due diligence means the process can start immediately and without delays.

And what are the downsides to not being ready for due diligence?

Missing deals. Say a tech startup goes to an event where they meet, for example, Elon Musk. He states an interest in the company, discussions progress fast, they sign a term sheet and he wants to proceed to due diligence…and then it takes the startup two months to pull the documentation together. By that time Elon Musk and team will have moved on to project number one hundred and the tech startup is left behind and forgotten.

Then there’s legal requirements that can be missed, such as data privacy regulations. Not being ready for those has legal consequences. That’s something you always want to avoid.

In a merger and acquisition (M&A) scenario, the entity conducting the due diligence examination will create a report on the documentation that’s been provided. If some of the required documents are not provided, this can have a negative impact on the corporate valuation.

You can compare it to a cluttered desk with disordered papers everywhere. Effective due diligence means that all those papers are organized and you can find what you want, when you need it.

Thank you, Heikki!

In part two of our interview, Heikki will explore how automation is set to shake up due diligence forever!

Big question: do you think due diligence processes need to modernize?

ICOs and crypto funding are radically altering the investment landscape. Startups and other projects raised $5.6 billion in 2017 through ICOs alone. It hasn’t all been plain sailing – the market still suffers from high volatility, with 2018 being particularly erratic. During the first quarter of 2018 the market capitalization of all cryptocurrencies lost at least $342 billion.

Despite this many believe that crypto funding is here to stay. Just take a look at the CFA Institute’s recent landmark decision (the CFA is a global association of investment professionals that distributes exams and awards credentials to professionals within the financial industries). Next year’s iteration of their three-tier exam will feature topics on cryptocurrency and blockchain. This is one of the strongest signals yet of cryptocurrencies’ growing importance.

But the field can still be a scary place. Lack of regulation has left the marketplace open to scams. In just the first 59 days of 2018, $1.36 billion was stolen via crypto scams.

So the big question is – how can you take part in the exciting world of ICO investment without getting scammed?

Study the white paper

The ICO promoter should have a clear business plan laid out in a white paper. It should answer the following questions:

Avoid dodgy firms

The ICO process is nowhere near as rigorous as traditional funding processes. And most ICOs offer investors a stake in products and services that are yet to be launched. Meaning the likelihood of investing in a project that fails to launch is increased.

Is it too good to be true?

There’s no such thing as a sure thing. If an ICO campaign promises unrealistically high or guaranteed investment returns, then it’s almost certainly a scam.

Don’t believe the celebrity endorsements

Celebrities are not usually qualified investment advisors. Remember that a celebrity endorsement does not automatically mean that an investment is credible.  

SEC-compliant ICOs are fairy tales

(The SEC is the US Securities and Exchange Commission.) Some ICO campaigns may give the impression that they are, or soon will be, traded on a registered exchange, and operate under strict SEC-compliant standards to promote high-quality digital assets to trade.

Any such asset is likely to be a scam. The SEC does not review the standards or any of the digital assets selected by these platforms. The same goes for other regulatory bodies.

Don’t chase discounts

If you see a seductive ICO offer with big discounts…be careful. People often choose which tokens to buy based on the discount provided -that is an easy way to make a wrong choice and end up paying too much and over the value. If you buy cheaply, you often pay dearly.

Beware of unsolicited offers 

An unsolicited sales pitch can be part of a fraudulent investment scheme. Practice extreme caution if you receive an unsolicited communication from an unknown sender promising a golden investment opportunity.

There’s no rush

Fraudsters often try to create a false sense of urgency and hurry your investment along. Take your time and properly research a potential investment opportunity.

Pump and dump is a red flag

Fraudsters often try to pump up the value of an ICO through misleading statements. Then they dump it by selling their own stakes at the inflated price. The value of the coin falls and investors lose money.

Look out for the ASSET VERIFIED stamp

One of the main reasons that ICO campaigns can fall foul of scams? The lack of an independent third-party to carry out effective due diligence.

Asset Verification Protocol is the solution to this. It’s a streamlined process that carries out the necessary due diligence examination of a platform’s assets. If everything is legitimate, the platform is awarded the ASSET VERIFIED stamp, protecting both the platform and the investor.

Look out for the ASSET VERIFIED stamp. It’s proof that you’re looking at a verified investment opportunity.

(Psst! If you haven’t already, check out Part 1 of our beginner’s guide to ICO investing.)

After reading Part 1 of our guide to ICO (Initial Coin Offering) investment you’re hopefully feeling more confident about the sometimes bewildering world of crypto funding.

It can be a confusing and tricky world out there. So let’s take a closer look at some more ICO fundamentals, beginning with the thorny issue of regulation.

Are ICOs regulated?

The regulation of alternative funding markets such as cryptocurrencies is a hot topic at the moment, and the field is changing fast. Many believe that cryptocurrency will never truly challenge fiat money (traditional forms of money) while issues of fraud and illegality continue to be of concern.

Depending on the circumstances of each individual ICO, the virtual coins or tokens can be classified as securities. In such cases, an ICO would be subject to the local securities laws, such as the Securities Exchange Act in the US or the Financial Conduct Authority in the UK.

What is blockchain?

Blockchain technology is what makes alternative funding mechanisms such as cryptocurrencies possible.

Say you’ve invested in some cryptocoins. They don’t physically exist, so how can you be sure that they are stored safely? That’s exactly what blockchain is for. It’s a platform comprised of a digital, distributed ledger (a record of financial transactions). This ledger is used to track and store transactions.

The blockchain is maintained by several participants within a distributed network of computers. A copy of the blockchain is downloaded automatically onto each connected computer (also known as a node). Once a record is stored on the blockchain the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks. That requires the collusion of the majority of the network. This is what makes blockchain safe.

A record’s authenticity on a blockchain can be verified by the community – without the need for a single centralized authority. Decentralization is one of the most exciting things about blockchain. Some believe it could even have a mitigating effect on future economic and political turmoil.

Blockchains use cryptography to process and verify transactions on the ledger. This ensures that the entries are secure.

Blockchain technology is ideal for storing smart contracts (see below) because of its security and immutability. Smart contract data is encrypted, making it impossible to lose the information stored in the blocks.

What are smart contracts?

How do you enforce an agreed upon decision when it’s all taken place in cyberspace? The answer is by smart contract.  

This is a computer program stored on a blockchain that controls the transfer of digital currencies or assets between parties under predefined conditions. A smart contract not only defines the rules and penalties related to an agreement in the same way that a traditional contract does. It also automatically enforces these obligations.

Blockchain technology is ideal for storing smart contracts because of its security and immutability. Smart contract data is encrypted, meaning it’s impossible to lose the information stored in the blocks.

What is a white paper?

A white paper is essentially the business plan of a company raising funds through an ICO. It usually includes the business idea, benefits, required investment, the timeline of the ICO campaign, etc.

How important is due diligence when considering investing in ICOs?

In an unregulated field such as ICOs, due diligence is of vital importance. It may not be obligatory, but it’s definitely recommended if you want to avoid scams.

But where do you start? Proper due diligence can take a lot of time and effort.

This is where Asset Verification Protocol steps in. It’s designed to ensure legitimacy. It means you can safely invest in alternative funding mechanisms such as ICOs without having to worry about the due diligence process. Asset Verification Protocol does the hard work for you. Approved assets are given the Asset Verified stamp, designating a certified investment opportunity. Everyone’s a winner.

What excites you the most about alternative funding mechanisms like ICOs?

Unless you’ve been living on another planet since the last decade, you’ll know that the advent of crowdfunding was a direct result of the financial crisis in the late noughties. Startups, small businesses, charities and the like had no access to the financial markets and could not fund their projects from traditional sources like banks or from equity sales through broker channels.

The sheer growth of crowdfunding, as well as other alternative funding methods such as crypto-funding through private investor platforms is staggering. In North America alone, there were 375 crowdfunding platforms by end 2014 and 1,250 worldwide. By 2015, the global volume of crowdfunding had grown to $16.2 billion and is expected to reach $49 billion by end 2018 rising to $110 billion by 2021.

Crowdfunding may seem to have reached the mainstream status, but only for a small segment of modern, tech-savvy investors who are street-wise enough to be able to handle the risks it entails.

From an investor standpoint, crowdfunding is still the Wild West. Regulations are minimal if at all and crowdfunding platforms lack the tools for due diligence on fund seekers. The vast majority of the world’s people who invest in the more traditional instruments such as listed shares or stock funds are not yet up to the challenge crowdfunding brings.

There have been too many scams. Take the famous BitConnect Bitcoin investment lending platform. It made inroads into the crypto-funding scene with an Initial Coin Offering (ICO) in December 2016. During 2017 BitConnect stabilized its position as one of the best performing cryptocurrencies on CoinMarketCap. But despite its rapid growth, BitConnect was frequently labeled a Ponzi scheme by a small, but loud crowd of skeptics. In January 2018, soon after its market cap had peaked at $2.6 billion BitConnect abruptly announced shut down of its lending and exchange services.

For the masses, the BitConnect shutdown came as a surprise, but the writing was on the wall from the day one. Namely, BitConnect had registered false facts about its business, including its location and the identities of the founding members, i.e. information that a due diligence check carried out by a professional would have exposed.

Another famous crowdfunding scam was Imperia Invest IBC (Imperia) for defrauding more than 14,000 investors worldwide. Imperia raised in excess of $7 million, $4 million of which was collected primarily from deaf investors in the United States. According to the Securities and Exchange Commission’s complaint filed in the U.S. District Court for Utah, Imperia defrauded investors by soliciting funds via the internet to purchase Traded Endowment Policies (TEP), the British term for viatical settlements. Its unrealistic business proposal promised to pay investors a guaranteed return of 1.2% per day. Additionally, the company wasn’t even lawfully registered anywhere in the world, although it claimed to be licensed and located in both the Bahamas and Vanuatu when, in fact, it was not licensed to do business or located in either of those countries.

So, as the two scams described above reveal, the fundamental challenge with alternative funding mechanisms such as equity crowdfunding, crowdsourcing and crypto-funding today is the remarkable lack of cost-effective due diligence services available to crowdfunding and crypto-funding platforms to become self-regulating and ensure the legitimacy of their assets to protect the interests of small investors.

Can crowdfunding become truly mainstream? It seems obvious, but not before the alternative investment methods and platforms provide a safer and more credible, self-regulated marketplace. Otherwise, it will remain a niche investment playground.