WORLD BUSINESS ANGELS INVESTMENT FORUM
WBAF
wbaforum.org World Business Angels Investment Forum
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The World Business Angels Investment Forum is committed to empower the economic development of the world by fostering innovative financial instruments for SMEs, innovators and startups, invites you to join our global efforts to ease access to finance for them to create more jobs and social justice for the world economy.
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World Business Angels Investment Forum
CHAIRMAN’S STATEMENT What is ‘the best finance’ for startups, scaleups, entrepreneurs, SMEs and angel investors? As a global organisation, the World Business Angels Investment Forum is bringing together key players of the equity markets to discuss the benefits and challenges of achieving successful growth for businesses and to explore additional possibilities for empowering the world economy. In the wake of the global economic crisis, it was far from easy to reach out for any kind of finance, smart or otherwise. The World Business Angels Investment Forum focuses on developing innovative financial instruments for entrepreneurs, scaleups and SMEs as a part of its global agenda. To focus on the ‘smart’ factor in innovation in the context of entrepreneurial ecosystems, the World Business Angels Investment Forum directs its attention to developing smart investors, smart finance, smart exits, and smart entrepreneurs, startups and SMEs. By working together across borders, with a common vision, and with these smart dynamics in mind, we are well placed to bring about positive change in the global economy. As the Chair of the World Business Angels Investment Forum, I invite you to join our global efforts to ease access to smart finance to create more jobs and more social justice worldwide. Your efforts to convert the world economy to a smart economy in cooperation with the World Business Angels Investment Forum will be highly valued.
Yours sincerely,
BAYBARS ALTUNTAS
Chair, World Business Angels Investment Forum
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The World Business Angels Investment Forum (WBAF) is an international organisation aiming to ease access to finance for businesses from start up to scale up to exit.
ABOUT WBAF
The World Business Angels Investment Forum (WBAF) is an international organisation aiming to ease access to finance for businesses from start up to scale up to exit. 4
World Business Angels Investment Forum
WBAF MISSION The World Business Angels Investment Forum (WBAF) is an international organisation aiming to ease access to finance for businesses from start up to scale up, with the ultimate goal of generating more jobs and more social justice worldwide. It is committed to collaborating globally to empower world economic development by creating innovative financial instruments for innovators, startups, and SMEs.
SMART FINANCE OPPURTUNITIES The Forum interacts with leaders in all areas of society
The Forum interacts with leaders in all areas of society, first and foremost in business and political spheres, to help assess needs and establish goals, bearing in mind that the public interest is of paramount importance. We engage a wide range of institutions, both public and private, local and international, commercial and academic to help shape the global agenda.
HOW WE DIFFERENTIATE OURSELVES As a global organisation, the WBAF is unique in its focus on a ‘smart’ approach to transforming the world’s economy to a smart economy — one that we believe will produce more jobs and more social justice. The Forum provides an open environment where key players from equity markets around the world can freely discuss the challenges businesses face in achieving growth and explore ways to empower the world economy. The Forum is also unique in its focus on dynamics, all of which embed the smart concept for scaleups.
We hold that, with the participation of individuals and institutions from all parts of society, real progress can be achieved.
SMART FINANCE & INVESTORS
SMART SMART EXIT ENTREPRENEURS, STRATEGIES SCALEUPS, SMEs
BEYOND FINANCIAL ECOSYSTEMS
WE FOCUS ON THE LONG TERM
IDENTIFYING THE RIGHT ENTREPRENEUR, SCALEUP OR SME
We help ensure that policymakers, entrepreneurs, scaleups and SMEs fully appreciate the importance of smart finance, which can be provided only by angel investors.
An increase in the number
Identifying the right entrepreneur, scaleups or SME is
of new business ideas is
crucial for any investor. On the other side of the coin, it
closely related to exit
is also crucial for entrepreneurs, scaleups and SMEs to
opportunities.
receive investment from the right team of investors.
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SME SCORING
WHAT WE DO Why our work is important? The 2008 global economic crisis produced an economic environment that resulted in unprecedented challenges for entrepreneurs, startups and SMEs seeking access to finance. It was clear that an entirely different way of working was required, a new approach to solving qualitatively different problems. The WBAF provides an international platform where all stakeholders can join forces to drive change, with a particular focus on linking the best entrepreneurs, startups, scaleups and SMEs with smart finance opportunities afforded by qualified angel investors and institutions that work in cooperation with angel investors. In addition to conferences, talks, meetings, and debates, the WBAF gives importance to taking concrete steps that fuel the growth of the world entrepreneurial ecosystem.
Converting Public Money to Smart Money The WBAF draws the attention of policymakers to the risks posed by financing entrepreneurs, startups, scaleups and SMEs. If finance is not backed up by know-how, mentorship and good networking, an investment can easily lead to the border of the proverbial valley of death.
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The WBAF therefore invites governments and policymakers to develop strong angel investment schemes to be used alongside public support for entrepreneurs, startups and SMEs. Policymakers should also develop smart policies to convert public money to smart money in cooperation with qualified angel investors. By working together across borders, with a common vision, and with these smart dynamics in mind, we are well placed to bring about positive change in the global economy.
SME Scoring Another specific area of interest of the WBAF isSME scoring. The WBAF sees the benefit to the world economy of a well-developed SME scoring system. We believe that such a system will accelerate the investment process and that investors will facilitate finding suitable entrepreneurs, startups, scaleups and SMEs to invest in. The WBAF is ready to cooperate on initiatives and action plans to develop a valid, objective and reliable SME scoring system that can be applied globally.
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The Forum schedules four meetings per year. Annual Conference, Strategic Planning Meeting, Global Collaborations Summit, Excellence Awards & VIP Gala Dinner. An Annual Conference, held every February works to shape global, regional and industry agendas. A Strategic Planning Meeting is held in October or November each year to identify a specific area of focus for the coming year. In addition to these events, the WBAF offers workshops, seminars, and special meetings on subjects of relevance to its global agenda and in line with emerging needs.
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GLOBAL COLLABORATIONS SUMMIT Every May
A Global Collaborations Summit aiming to share knowledge and insights on the most pressing global issues impacting investment markets and related areas is held every year in a different country.
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EXCELLENCE AWARDS & VIP GALA DINNER Every February A VIP Gala Dinner, held every February brings together the best angel investors of the world to salute the winners of the World Excellence Awards.
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WHAT WE DO In addition to conferences, talks, meetings, and debates, the WBAF gives importance to taking concrete steps that fuel the growth of the world entrepreneurial ecosystem.
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The World Business Angels Investment Fund The WBAF is in the process of establishing this special investment fund with the participation of members and partners of the World Business Angels Investment Forum, with the aim of providing financing for scaleups who raised angel investor before and SMEs.
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Global CEO Alliance Club The GCAC brings together brings together the best corporate CEOs to increase their awareness about angel investing and to give them an opportunity to invest jointly with qualified angel investors.
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3 Exclusive Investment Events The Forum organizes exclusive investment events where members, investors and executives of the World Business Angels Investment Fund meet with the best high-growth companies, scaleups,and SMEs for investment purposes. These investment forums are organised either independently or in conjunction with the WBAF Annual Conference or the Global Collaborations Summit.
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Excellence Awards With its Excellence Awards, the World Business Angels Investment Forum looks beyond borders. It seeks to promote and nurture start-ups, angels, and a dynamic business community throughout the world. From business angels to policymakers to academics, the Awards salute those who stand out in imagining, discussing, and shaping the future of an entrepreneurial World.
5 Investment Academy The WBAF Investment Academy serves not just business angels; all types of stakeholders are welcomed, ranging from entrepreneurs and SMEs to banks and stock exchanges to incubation and acceleration centres. The ultimate goal is to contribute to the development of skills and expertise and to foster the kind of creative thinking that leads to innovation and eventual success in the ever-changing market environment of the 21st century.
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OUR MEMBERS AND PARTNERS The World Business Angels Investment Forum is a membership organization. Our members comprise the world’s top corporations, global enterprises, NGOs, angel investment networks, stock exchanges, chambers of commerce and industry, technoparks, incubation and acceleration centres, VCs, SME agencies, regional development agencies, crowdfunding platforms, governmental institutes - who all share a common goal: Shaping the future of the early stage investment markets and easing access to
Partnership communities, which are designed to deepen their engagement with the Forum’s events, project and initiatives. We focus on key strategic challenges, including filling equity gaps, encouraging stock exchanges to create more liquidity, involving chambers of commerce and industry to increase the number of angel investors, encouraging corporations to set up their own corporate ventures, fostering cross-border
finance for entrepreneurs, startups, scaleups, SMEs.
investments, and fostering entrepreneurial ecosystems
These enterprises play a leading role in shaping the
contributions of our Gold Members, Full Members,
future of their industry and region. Some of our
by providing innovative and workable solutions, with Honorary Members and Observers Members from
members join the Forum’s Strategic and Industry
around the World.
Our approach to key challenges
Startups who receive angel investment face a finance challenge at scale up. If, for instance, they need to raise more than $1 million , the possibility of raising that amount from angel investors is slim because angel investors are not keen to invest over $1 million.Yet VCs generally do not invest below $5 million. This is the second equity gap. We encourage the creation of co-investments between angel investors, VCs, corporate ventures and public funds to fill this gap.
Entrepreneurs are expected to produce a demo in order to seek funds from angel investors and others, but they often lack the financial capacity to develop the demo. With this in mind, we need a solution to fill the equity gap at the seed level. We invite seed funders, crowdfunders and public support groups to cooperate to fill this gap. This equity gap is generally up to $50,000.
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Stock exchanges should open their doors to scale ups and develop innovative solutions for scaleups and SMEs who seek funding.
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Comprised of some of the world’s finest companies representing diverse regions and industries, Strategic Partners are committed to the idea that interaction between multiple stakeholders can be a positive force in creating change. They work in close cooperation with the Forum to help shape regional and global agendas in the global and regional investmentmarkets.
STRATEGIC PARTNERS
As members of the World Business Angels Investment Forum, Collaborative Partners are active at regional and global levels, working to develop insights which will inform strategic decision-making on issues that are critical to their own industry and to cross-border investments. Interaction with the Forum’s area experts and various networks drives positive change and supports efforts toward corporate global citizenship.
COLLABORATIVE
PARTNERS
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REGIONAL PARTNERS
Like the Global Ecosystem Partners, Regional Partners come from members of the World Business Angels Investment Forum. Regional Partners represent businesses with a strong regional presence or a strategic interest in a particular region, each committed to promoting economic and social development at various levels. As with the Global Ecosystem Partners, access to the Forum’s multi-stakeholder network and experts provides visibility and offers insights into strategic decision-making on important regional issues.
GLOBAL ECOSYSTEM PARTNERS
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Institutional Members, at the core of all Forum activities, cooperate to find sustainable solutions to global issues. They are typically top-rated high profile global enterprises that play a leading role in their industry and their particular region.
INSTITUTIONAL MEMBERS
Global Ecosystem Partners, selected from among the members of the World Business Angels Investment Forum, are actively engaged in carrying out the Forum’s mission at the investment level. Their Partner status affords them privileged access to multi-stakeholder networks of the Forum and its experts, providing visibility and strategic insights into the decision-making processes related to some of the most significant cross-border investment issues. This allows Global Ecosystem Partners to contribute to positive change and to engage in initiatives that support corporate global citizenship.
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The Forum Members community comprises well-established influential businesses that contribute to the development of their industry and the growth of their regional economies. Including top global innovators and disruptors and ranging from niche market leaders to regional champions, these companies collaborate to address key issues, identify emerging trends and further the Forum’s mission of easing access to finance globally.
FORUM MEMBERS World Business Angels Investment Forum
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WORLD STATS & NUMBERS The angel investment market size is more than 6 billion Euro in Europe ( EBAN2015) and more than 25 billion USD in the US and Canada (ACA2015). The total size of the world’s early-stage investment market is expected to exceed 50 billion dollars in 2020.
MALE & FEMALE ANGEL INVESTORS
WHAT DOES OECD SAY ABOUT ANGEL INVESTMENT? While venture capital trends to attract the bulk of the attention from policy makers, the primary source of external seed and early-stage equity financing in many countries is angel financing not venture capital. In some countries, policies to encourage a greater number of angel investors seem to have played a role. These include supply-side measures such as tax incentives and the creation of co-investment funds. Tax incentive progranunes have aimed to increase the number of angel investors as well as to adress tax asymmetries in profit and losses. Countries such as the United Kingdom with long standing angel tax incentive progranunes cite the impact the programmes have had on increasing angel investment activity which in turn creates jobs and economic growth. (OECD, Financing High Growth Firms and The Role of Angel Investors) 12
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ANGEL INVESTORS OFTEN OPERATE IN NETWORKS
Providers of equity capital in the early stages of firms’ lives Angel investors have an important role to play as providers of equity capital in the early stages of firms’ lives, and hence for the success of the entrepreneurial economy. The central role of business angels is increasingly recognised by policy makers. (OECD, 2015a)
In contrast to both venture capital investments and bank credit, business angel investments held up relatively well in the aftermath of the 2008-09 financial crisis and have gained further traction in recent years in many countries. In the United States, survey data suggest that there has been an increase of angel activities since 2012 when the JOBS act (Jumpstart Our Business Startups Act) was signed into law, reaching a total estimated size of USD 24.1 billion in 2014
function primarily as a matchmaking service between investors and entrepreneurs. The address information asymmetries between investors and entrepreneurs by enhancing the flow of information Business angels often operate in networks, private or semi-public organisations, which are usually active at the regional or national level. These networks
(financing smes and entrepreneurs 2016 - an oecd scoreboard, the role of business angel investments in sme finance).
25%
+2458
ONLINE BUSINESSES
IT & MOBILE TECHNOLOGIES
(Financing SMEs and Entrepreneurs 2016 - An OECD Scoreboard, The Role of Business Angel Investments in SME Finance). World Business Angels Investment Forum
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FUTURE STRATEGIES Empowering the global collaborations to ease access to finance Fostering various forms, including business angel–public funds, public fund–EIF, angel syndication, VC–angels, VC–public fund–angels.
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The World Business Angels Investment Forum explores effective strategies for using the corporations, chambers of commerce and industries, stock exchanges, innovation centers, technology parks, incubation centers, acceleration centers, banks and SME agencies as a body to leverage the efficiency of innovation in the world by converting their idle capacities into platforms where investors can find secure environments for investing in startups, scaleups, entrepreneurs and SMEs. The WBAF provides a roadmap for creating an innovation pipeline that will connect open innovation, research and development and corporate venturing by using corporations, chambers of commerce and industries, stock exchanges, innovation centers, technology parks, incubation centers, acceleration centers, banks and SME agencies as leading platforms of the local early stage investment markets.
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STOCK EXCHANGES
CHAMBERS OF COMMERCE & INDUSTRIES
SME AGENCIES
as leveraging bodies to increase the exits
as leveraging bodies to increase the number of business angels
as leveraging bodies to make more angel investor and startup friendly policies
World Business Angels Investment Forum
Angel Investors & Corporate Ventures Angel investment is booming worldwide. More than 90% of the early-stage investments in Europe come from angel investor capital. The angel investment market size is more than 6 billion Euro in Europe ( EBAN2015) and more than 25 billion USD in the US and Canada (ACA2015). The total size of the world’s early-stage investment market is expected to exceed 50 billion dollars in 2020. WBAF2016 initiated critical discussions on the concept of an early-stage investment economy where the focus is on early exit strategies from businesses funded by angel investors at the start-up and scale-up stages. A recent empirical study has examined the degree to which European CVC firms emphasize on strategic and financial objectives. Results show that 54% of European parent firms invest primarily for strategic reasons, yet with financial concerns, 33% invest primarily for financial reasons with strategic concerns and 13% invest purely financial. In fact, 50% of US parent firms invest primarily strategic with financial concerns, 20% financial with strategic concerns, 15% purely financial and 15% purely strategic. As a rule, corporate ventures, whether European or American, invest primarily for strategic reasons.
The World Business Angels Investment Forum explores ways to create more liquidity for startups, scaleups and SMEs and to develop better scale-up and exit strategies by forging strong partnerships with corporate ventures.
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STOCK
EXCHANGES
as leveraging bodies to increase the exits
EFFECTIVE STRATEGIES ARE PRESENTED for using the stock exchanges as a leveraging body to increase the market size of the world’s early-stage investment by converting stock exchanges into platforms where foreign investors can find a secure environment to invest in startups, scaleups and SMEs. 16
World Business Angels Investment Forum
CREATING A PRIVATE MARKET FOR ANGEL INVESTORS WHERE INVESTORS CAN FIND A SECURE ENVIRONMENT TO INVEST CREATING A PRIVATE MARKET FOR BUSINESS ANGELS, STARTUPS, SCALEUPS AND SMES ON A STOCK EXCHANGE
Effective strategies will be presented for using a stock exchange as a leveraging body to increase the market size of the world’s early-stage investment by converting the stock exchange into a platform where foreign investors can find a secure environment to invest in startups, scaleups and SMEs. The World Business Angels Investment Forum leads creating an awareness about why today’s stock exchanges should give more importance to
scaleups, SMEs and entrepreneurs than ever before, how private markets can serve the needs of SMEs and entrepreneurs, whether there is a need for the SEC of a country to secure the private market and how this market can be used to list global angel investors and leverage the size of the early-stage investment market by attracting foreign investors.
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CHAMBERS OF COMMERCE & INDUSTRY
as leveraging bodies to increase the number of business angels in the world
NATURAL PARTNERS FOR BUSINESS ANGELS Chambers of commerce and industry are natural partners for business angels in bringing economic development to their communities. These chambers are often the first stop for businesses and entrepreneurs looking for investors and business angels looking for ideas and innovators. 18
World Business Angels Investment Forum
PROVIDING THE OPPORTUNITY FOR BUSINESS LEADERS PROVIDING THE OPPORTUNITY FOR BUSINESS LEADERS OF CHAMBERS OF COMMERCE & INDUSTRY TO BECOME ANGEL INVESTORS TRANSFORMING CHAMBERS OF COMMERCE INTO ACCESS-TO-FINANCE CENTRES FOR ENTREPRENEURS, STARTUPS, SCALEUPS AND SMES.
Chambers of commerce and industry are natural partners for business angels in bringing economic development to their communities. Chambers are often the first stop for businesses and entrepreneurs looking for investors and business angels looking for ideas an innovators. They provide a valuable structure and convening power that allow business angels to
bring ideas to life. The World Business Angels Investment Forum presents a roadmap for chambers of commerce and industry to create their own angel networks and funds from within their operation. Bringing different skills and resources to the table: Business angels provide detailed guidance and training on the entrepreneurial lifecycle and on how to access finance and capital. Chambers provide guidance on the rules and regulations of doing business.
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SME AGENCIES
as leveraging bodies to make policies that support angel investors and start-ups
CREATING AND DRIVING HEALTY EARLY-STAGE INVESTMENT MARKETS The World Business Angels Investment Forum proposes a step-by-step country plan to create and drive a healthy early-stage investment market for cities, countries and regions.
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CONVERTING PUBLIC MONEY TO SMART MONEY AS A MAIN MISSION OF SME AGENCIES IN EACH CITY, COUNTRY AND REGION A STEP-BY-STEP COUNTRY MASTER PLAN TO CREATE AND DRIVE A HEALTHY EARLY-STAGE INVESTMENT MARKET FOR CITIES, COUNTRIES AND REGIONS 96% of the world economy is driven by entrepreneurs, start-ups and SMEs. These small- and medium-sized enterprises are the main drivers of economic stability. They recruit more than 60% of the entire working population of the world.In order for them to contribute more to the economies of their countries, they need quick access to new financial
instruments. Unfortunately, after the global economic crisis, SMEs, entrepreneurs, and start-ups were unable to access finance as easily as they had before. The development of new financial instruments such as crowd-funding, angel investment, acceleration programmes and co-investment funds, along with access to finance, therefore play a vital role in economic development.
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CORPORATE VENTURES
as leveraging bodies to increase the efficiency of early-stage investment markets
THE BENEFITS OF INCREASED INVOLVEMENT OF CORPORATE VENTURES IN EARLY-STAGE INVESTMENT MARKETS The World Business Angels Investment Forum proposes a new roadmap for corporate ventures to increase the efficiency of R&D departments by cooperating with startups that have raised funds from angel investors. 22
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A NEW ROADMAP: FROM STARTUP TO ANGEL INVESTOR TO CORPORATE VENTURES calls for corporations to invest in startups that have already WHERE STARTUPS, raised funds from angel SCALEUPS, SMES AND investors. Companies should open their doors to startups ANGEL INVESTORS and angel investor teams, WILL FIND EARLY EXIT who would then work in OPPORTUNITIES IN cooperation with the company’s R&D team. This new approach THEIR OWN MARKET can leverage the market size of local economies. Angel investors will be more willing to THIS NEW ROADMAP invest in startups, with LEVERAGES confidence of knowing they EARLY-STAGE will have access to further INVESTMENT MARKETS funding and/or early exit BY POSITIONING opportunities in the market. CORPORATE VENTURES The collaboration between angel investors, startups, AS BRIDGES THAT entrepreneurs, SMEs and CONNECT ANGEL corporate ventures will INVESTORS AND therefore serve not only the STOCK EXCHANGES. goal of creating more innovation for the company, Companies want and need but it will also serve to leverage innovation. The usual policy the early-stage investment is to create an R&D department, allocate a budget, markets and ultimately create more jobs. Leveraging and then invite or otherwise early-stage investment markets encourage employees to by positioning corporate develop innovations for the ventures as bridges between company. The biggest angel investors and stock challenge is to turn existing employees into intrapreneurs, exchanges will also serve to ease access to finance, not but the difference in mindset just for startups but for angel makes it difficult for R&D departments using this model investors as well in further investment rounds. to meet the expectation of creating a competitive advantage in global markets. The World Business Angels Investment Forum proposes an innovative roadmap that
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JOIN OUR GLOBAL EFFORTS We encourage you to join us in our efforts to harness the force of the world’s rapidly growing early-stage investment market. Join our global efforts to ease access to smart finance to create more jobs and more social justice worldwide. Your efforts to convert the world economy to a smart economy in cooperation with the World Business Angels Investment Forum will be highly valued.
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