Case Detail

Case Summary

OurCrowd: Growing a Crowdfunding Platform in a VC World

Case Number: 5-215-253, Year Published: 2015

HBS Number: KEL922

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Authors: Sarit Markovich; Evan Meagher

Key Concepts

Competitive Strategy, Decision Making, Entrepreneurship, Growth Strategy, Innovation, Motivation, Pricing Strategy, Strategic Positioning, Venture Capital

Abstract

This case features the challenges of a startup in the crowdfunding space in 2015 as its leadership assesses potential sources of growth for the company’s future. Founded in Israel in 2012 by a renowned venture capitalist, OurCrowd was a venture capital crowdfunding platform that strove to connect high-growth startups raising capital with accredited private investors from around the world. Its value proposition was to democratize an inefficient market for private equity that had historically been dominated by a small number of highly connected venture capital firms (VCs). The case asks students to put themselves in the shoes of OurCrowd’s head of investor community as he prepares for a meeting with the company’s board of directors to discuss potential strategies for growth: Should the company partner with the incumbent VCs it initially sought to disrupt, emphasize marketing its Portfolio Reserve fund, strive to provide its investors and investees with higher value-added services, target a broader swath of investors by aggressively marketing the platform in international markets, or attempt to go up-market and pursue increasingly larger deals with later-stage companies? Through assessing these options and discussing this case, students will learn about incentive problems in two-sided markets as well as how different types of crowdfunding platforms create value for users.

Learning Objectives

After reading and analyzing the case, students will be able to:

  • Analyze incentive problems in a two-sided market
  • Understand the nature of pricing and barriers to adoption in two-sided markets
  • Appraise various strategies for growth for an equity-based crowdfunding platform
  • Understand the value of cooperation with competitors in creating additional value in a market
  • Understand the tension between pursuing the growth opportunities that minimize your costs and those that fit best with your strengths and position in the market

Number of Pages: 11

Extended Case Information

Teaching Areas: Strategy

Teaching Note Available: Yes

Geographic: Israel

Industry: Venture capital

Organization Name: OurCrowd

Organization Size: Small

Decision Maker Position: Head of investor community

Decision Maker Gender: Male

Year of Case: 2015