The private fund
Before Monethera, our team launched a private investment fund. There were several areas of activity. Among them:
Electricity, gas and steam supply.
Accommodation and food services.
It was successful Fund. At 31 December 2018, the Fund held a portfolio of financial instruments for the total value of EUR 6.2 million (gross) issued for 36 projects.
In 2018, the portfolio of the Fund’s financial instruments increased by 21.6% (EUR 1.11 million) in terms of volume and by 26.9% in terms of the number of projects vs year-end of 2017. Of the financial instruments, the loan portfolio had the most rapid growth by 29.3% in terms of volume (EUR 0.72 million).
As the results were great, we decided to go forward and transform our Fund into crowdinvesting platform. We have kept the same core model that was in the Fund but provided it to the general public.
How do we select the projects?
On the one hand, the public platform imposes more requirements for project evaluation. On the other hand, since we also act as investors and value our reputation, we initially set high criteria and developed the principles of projects selection. Here they are:
We are looking for profitable projects, or project owners send us projects for consideration.
We conduct our own research and comprehensive verification.
We approve the project if Due Diligence was successful.
We conclude a loan agreement with the project.
We care not only about the potential profit of our investors, but also about safety of their money. That’s why we have multi-level verification system. The first step is a complex analysis of the business and the search for investment risk by our analysts.
The next step is conducting Due Diligence by SIA Doma Audits. It includes a comprehensive analysis that lasts 2-8 weeks, depending on the complexity of the project.
And the last one is concluding the loan agreement with the project. It covers 65% of the potential costs of our investors in case of project failure. The rest 35% covers Monethera Fund itself.
Besides, we implement a reporting system, which allows us to monitor project development and track KPI achievement. We are going to share all the milestones of our project in social media so every investor also can track the health of the project.
This approach allows us to minimize financial risks and select potentially successful projects.