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How are allocations for fundraising rounds defined?

Jon Olsson
3 min reading time
20 October 2024
There are five membership levels in the club, ranging from Bronze to Diamond. For each fundraising round, the allocation amount and the total amount you can invest in a year vary.
Summary
Akka Nordics

Jon Olsson and Thomas Rebaud’s startup investment platform.

Each membership level includes four parameters:

  • The maximum total amount you can invest on Akka during the membership period (1 year).
  • The maximum amount you can invest in each fundraising round (the allocation).
  • The number of Priority Coupons that guarantee a spot in a fundraising round even in case of oversubscription.
  • The share of the overall fundraising allocated to members of a specific level.

Subscription Intentions

For two weeks, all information about the fundraising project is available on the Akka website. During this period, each member must indicate the amount they wish to invest (the intention) and specify whether they want to use a priority bonus, a booster, or none of these.

The intention amount cannot exceed the maximum amount linked to their level. However:

  • This amount can be lower and must always be rounded to thousands of euros.
  • Additionally, the member can indicate if they wish to include an option for a higher amount, which will be considered only in case of undersubscription.

Example: A Silver level member can subscribe up to €5,000 per project. They can then invest €5,000, €4,000, €3,000, €2,000, or €1,000. They can also indicate an additional option up to €5,000, which will be considered only in case of undersubscription.

Counting the Intentions

At the end of the intention registration period, we calculate the sum of the amounts that all members wish to invest and determine whether the round is oversubscribed or undersubscribed.

In case of undersubscription:

A fundraising round is undersubscribed if the sum of the intentions is less than the total amount to be raised. In this case, all investors who have indicated their intention can participate in the fundraising, up to the amount of their intention or the additional option, if applicable.

In case of oversubscription:

A fundraising round is oversubscribed if the sum of the intentions is greater than the total amount to be raised. In this case, not all investors will be able to obtain an allocation equivalent to their intention. This is where the algorithm comes into play.

Selection via Algorithm in Case of Oversubscription

Akka’s selection algorithm is used only if the sum of the intentions exceeds the amount to be raised. Its purpose is to allow as many members as possible to obtain an allocation without exceeding the total amount to be raised.

a) Allocation of Priority Coupons

When a member uses a Priority Coupon, they are guaranteed to obtain an allocation in the fundraising round, and their allocation will not be reduced. The algorithm always starts by assigning shares to members who have used a Priority Coupon.

Special cases: In the rare case that, within the Gold, Platinum, or Diamond levels, the sum of the intentions of members with a Priority Coupon exceeds the total amount allocated to that level, the allocations of each member will be proportionally reduced so as not to exceed the maximum amount to be raised.

b) Allocation for Other Members

The remaining amount is allocated by applying the same divisor to each intention.

Example: Fundraising round X has a maximum target of €1,000,000.

  • The total amount of intentions is €2,000,000 for 2,000 intentions, of which €100,000 come from 100 members who have used a Priority Coupon.
  • €100,000 are automatically allocated to the 100 members with a Priority Coupon.
  • There are then €900,000 left to allocate to the remaining 1,900 members.
  • €1,900,000 / €900,000 = 2.11 is the divisor.
  • If you invested €1,000 without using a Priority Coupon, you will receive an allocation of €474 in this operation, equal to 47% of your intention.

The Subscriptions

Members who have indicated their subscription intention will receive an email to finalize their participation in the fundraising round. The amount they will have to invest cannot be different from the one indicated during the intention phase, except in case of oversubscription, where the amount will have been reduced.

Legal and Administrative Finalization

Once all subscriptions have been received and the information collected, Akka’s legal teams will proceed with the capital increase and subscription to the startup’s fundraising.

You are a Shareholder!

Once the fundraising is completed, you will have access to your investment commitment directly in your Investor Space.

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