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July 4, 2016 Issue

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Equity Based Crowdfunding Platform connecting Investors with the Global SME Market

Korstiaan Zandvliet

Co-founder and CEO

Symbid Corporation

OTCQB:SBID

www.symbid.com

Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – July 4, 2016

CEOCFO: Mr. Zandvliet, would you tell us about Symbid?

Mr. Zandvliet: Symbid started out in 2011 as one of the first equity based crowdfunding platforms in the world. In short, what we do is offer securities, non-public companies to non-accredited investors by online interface. It is basically a website where retail investors can invest for as little as twenty Euros in exciting startups or very cool growing companies in the European area.

CEOCFO: What are some of the advantages of being early to the crowdfunding arena?

Mr. Zandvliet: When we came to market with our product, it was heavily inspired during the time that the co-founders Mr. Maarten van der Sanden, COO, Mr. Robin Slakhorst, CCO and I, were attending a course in entrepreneurship and new business venturing at the Rotterdam School of Management. What we saw was that many of our peer students had very exciting ideas but were unable to secure the necessary funding. This was back in 2007, so we saw the rise of Facebook, social media and Dragon’s Den area being out here in the Netherlands which is the European equivalent to Shark Tank. We thought this was very cool and we thought what if we could participate in these kinds of propositions. There are enough good ideas and enough money so why are people not finding one another. We started out from a regulatory perspective, setting the complete framework up. It took us a lot of time in order to think of this innovation; how to structure it and how to process it. In my prior job, I worked for a software company and we did not know that what we billed was what was called an equity based crowdfunding platform. My former colleague called me and said what I was doing was something special because in the US it is being deemed the holy grail for crowdfunding and you can actually buy securities in known listed companies. I was so surprised that because for us, the realization came quite naturally in doing something like this and only then did we understand the magnitude of the banker innovation that we brought to market. Symbid being the first equity based crowdfunding platform, we got a lot of speaking engagements, a lot of evangelizing of what was our vision and what was driving us. We are driven by a hunger for creating an equality in equity financing, which is the financing of small and medium-sized enterprises.

CEOCFO: Would you tell us about the various components of your funding network?

Mr. Zandvliet: Our services are primarily being used for the crowdfunding platform by retail investors. We have over 40 thousand retail investors in our databases and startup and growing companies with capital needs somewhere between 20 thousand Euros and 2.5 million Euros. On average within the retail industry, we also see about 10%, around 4000 of our investor clients can be deemed accredited investors, VC regional development companies who use our platform basically to browse to the large collection of potential use and making it into a very cheap way to start interacting with a company from an investor/investee relationship and later maybe moving on into big ticket checks etcetera.

CEOCFO: What type of information do you present about a company? Do you vet the information?

Mr. Zandvliet: We take great pride in this. Our motto back in 2011 was a little bit more rudimentary than it is nowadays because we program our crowdfunding platform into a solution for SME (Small-and Medium-Sized Enterprise) funding for the complete spectrum of financial options. To give you an overview of how we work with entrepreneurs is quite simple. They enroll on our online subscription portal. They answer six questions and receive back a pdf which allows them to already indicate between the various investment products. For example, venture capital, private equity, bank financing, and whether it is applicable from their situation or not. Then for $350, we connect them directly to an advisor. The $350 gives them two hours face-to-face contact with a financial advisor trained by Symbid, who has intimate knowledge of all the products that we are currently selling. Next to our crowdfunding products, equity based crowdfunding, loan based crowdfunding, we also offer products of our fifty institutional investors varying from other crowdfunding solutions up to private equity, global opportunity funds. Within the two hours, the actual advisor is getting all the necessary information from the entrepreneur in order to create an investor memorandum. The two hours are too short so our system allows to directly interact with the accounting firm of the actual company, making sure that there is a direct vetting of the actual information being provided, a name of the entrepreneur to the advisor. Now we have three parties on the table who are all jointly working in creating an investor memorandum. We are making sure our system works with the various parties, making sure that everything is legally safe and sound for both the advisor and the accountant in order to create this investor memorandum. From there on we automatically match it with a dynamic and the fixed profile criteria of all our institutional investors and their various products. For example, some VCs do not want to invest in 3-D printing, well then that is fine with us and you will not see those actual propositions. To that extent, we created a formula in which now institutional investors already gets vetted files, and does not have any costs in order to browse through these files, it is basically just an institutional crowdfunding platform. After the investment is made, Symbid remains involved by integrating our monitoring solution which is a SaaS solution, directly onto the bookkeeping practices of the entrepreneur, making it easy to get a quarterly performance report based upon your specific APIs or for the crowd funders. We have created a set of eighteen key performance indicators that indicate whether your investment is doing good or not. This is something we deliver back within our service. Now all of a sudden, investors have the ability to be far more responsive and it provides entrepreneurs with the right funding at the right time. It does not put you into the arena with a financiers basically saying, “VCs, banks, everybody has money”, but which money is the best for my company at my current situation. That is something that we definitely try to make sure that every good entrepreneur and every good plan deserves the right funding at the right time. That is what we believe.

CEOCFO: What is the regulatory atmosphere?
Mr. Zandvliet: We are predominantly operating within the European continent. We are originally a Dutch firm. You might recall that the Dutch were actually responsible for creating the first stock markets. We take great pride in our home Country. In terms of the regulatory environment, this is obviously a challenge for us as a company. European Union is by no means a union when it comes to offering regimes, investor protection, etcetera. This is something that we have to account for. Luckily for us, regulators in most European countries as well as the regulators in Brussels are very open towards these ideas because what we are doing here is we are solving a very pivotal problem for the backbone of the economy, how to finance small and medium-sized enterprises in a cost-effective and efficient way. We have a lot of support from the regulators especially early on in sparring about our vision and our ideas regarding how to operationalize this and placing that within the legal structure of the regulatory oversight. Most security regulation in the world predates the actual adoption of the internet. The internet is one of the reasons why we cannot be so efficient and effective in our operations. To that extent, we are also trying to educate the regulators on how to strategize for the years to come when boundaries will start to evaporate and financial institutions will become more international.

CEOCFO: How is business?
Mr. Zandvliet: Business is good. We just filed our first quarter. We successfully brokered over $ 130 million in the 1^st Quarter, which is a great number provided that the actual successfully funded SMEs, within the Netherlands are not more than 6 billion, so we are on a yearly basis. We are on track in order to get a substantial market share within the SME markets. This is something, especially the monitoring products and the complete funding network with the integration on the institutionals that we only launched last year. If we look at it on a year-to-year basis, we successfully brokered between $700 and 800 million, being successfully funded campaigns with institutional investors, crowd funders, what have you. In terms of our early models we are still pivoting from the various ways that we can make money from this enormous deal flow. We are currently working towards a base point model which will make it easier for not only our stake and shareholders but also for the general market to see that it is very remarkable for a company which is as young as ours, and with so few staff, is able to nibble off such a significant market share of the Dutch SME market. We believe that the paradigm shifting technology practice that we are bringing can be copied quite easily into other European countries. The Netherlands is a small country. We have about 17 million people living here and ten million people in the labor population. So this is a relatively small country within the Euro zone itself. We have aspirations to also offer this service profile in the German market and consequently throughout Europe.

CEOCFO: How do people find Symbid?

Mr. Zandvliet: We garner attention by various marketing campaigns. For example, in the first quarter we successfully piloted together with the RTL Media Group, which is our national television channel. We showed pictures on national television and had a commercial primarily to attract retail investors. Furthermore, I also speak on financial conferences and other events primarily geared towards the institutional audience. What I am selling there is primarily the attractiveness of the asset plans of investing into as a niche. As long as you solve the selection and the monitoring problem, you have pretty interesting asset class, which is stable in terms of this actual output and the actual gains that can be made. We also populate some of the national advisory councils, the actual European Commission where we advise of the actual capital formation within the complete Eurozone. Every now and then we also write some academic articles. We believe that sharing our knowledge and using our data in order to compile nice data sets for students to work on, as well as to provide a general overview not only for ourselves but also back to the regulators, entrepreneurs and everybody who is interested in the state of the SME funding market today.

CEOCFO: Symbid is trades as an OTC:BB company. Why pay attention to Symbid, from the product standpoint and as a potential investor?
Mr. Zandvliet: For the actual product, I think what Symbid is continuously showing over the last five years is an incredible innovativeness towards financial solutions in the domain of people needing capital between 20 thousand Euros and 10 million Euros. Besides the fact that our product is one of the safest and we have been one of the bullish leaders in the field, we see that crowdfunding currently is getting a lot of attention. We believe that the attention is always very good for the industry. There are also many players in the market. We believe that as a pioneer and as an early mover, we have significantly shown our ability to execute upon tough case. From a regulatory point of view, a technical point of view and a partnership point of view, by integrating those, we have created a solid, competitive position within the market. I think roughly speaking we are talking about a 5% to 7% market share over one year obtained within the Dutch SME market, which is pretty decent. That is why it interesting for investors, especially those planning on investing in owning Symbid stock. Although we are predominantly focused upon Europe, what we are doing here should be seen as highway to capital for SMEs all around the globe. Our aspirations are definitely global to that extent. We believe that by integrating all our partners, accountants and advisors, we need to do this is a waterfall model because of the effectiveness of the network is not there yet but I think we have shown tremendous interesting cases in which a funding was attained within 48 hours. That shows something towards investors. The earning potential that we are currently creating on the actual funding volumes, year-to-year is about $700 million US. We are now moving toward a minimum of 15 base points and 500 base points, which also provides us with very healthy margins.

“We successfully brokered between $700 and 800 million, being successfully funded campaigns with institutional investors, crowd funders, what have you.”- Korstiaan Zandvliet

Symbid Corporation

OTCQB:SBID

www.symbid.com

Contact:

Korstiaan Zandvliet

+31 6 24 23 37 73

korstiaan.zandvliet

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