Article 1- The purpose of this policy is to regulate the principles and rules regarding the approval of the Information Form submitted by the Entrepreneur or the Startup Company applying for Startupfon Crowdfunding Platform Inc. in accordance with the relevant regulations and the objective evaluation criteria and methods to be included in the Investment Committee assessment for the review of the feasibility report specified in the Crowdfunding Regulation (lll – 35/A.2) Annex-2.

Scope 

Article 2- This policy covers the necessary evaluations for publishing campaigns and is implemented in the headquarters of Startupfon Crowdfunding Platform Inc. and other organizational units. 

Legal Basis 

Article 3- This Policy has been prepared based on Article 4, Article 16, Article 35/A of the Capital Markets Law No. 6362 and the “Crowdfunding Regulation (lll – 35/A.2)” published in the Official Gazette dated 27.10.2021 with serial number 31641 and the publications of the Turkey Capital Markets Association (TSPB), and is announced to the public through the Platform website in a way to be continuously valid, bound by the decision of the Platform Management Board under the relevant legislation.

SECTION TWO

DEFINITIONS

Definitions and Abbreviations

Article 4- Definitions in the scope of this policy are as follows.

1. Evaluation Specialist: The person appointed by the Platform for the Entrepreneur or Startup Company, which is subject to a preliminary evaluation of applications to the Platform and provides evaluation consulting to prepare the Information Form for submission to the Investment Committee.

2. Entrepreneur: Real persons residing in Turkey looking for funding for their projects,

3. Startup Company: Joint stock companies established or to be established in Turkey that have growth potential and need funding,

4. Campaign: Public announcement of the fundraising request carried out by a startup company or project to obtain the necessary funds through platforms,

5. Campaign Page: The internet page created regarding a startup company or project, which is open only to members of the platform,

6. Law: The Capital Markets Law No. 6362 dated 6/12/2012,

7. Crowdfunding: The process of raising funds from the public through crowdfunding platforms without being subject to the provisions concerning investor compensation as determined by the Board in accordance with the law,

8. Crowdfunding Information Form (Information Form): The form published on the campaign page to collect the funds needed by the project or startup company, the standards of which are determined by the Board,

9. Board: The Capital Markets Board,

10. Share: The security representing the capital of the startup company and granting ownership rights to its holder,

11. Equity-based Crowdfunding: The collection of funds from the public through crowdfunding platforms in exchange for shares,

12. Project: The business idea requiring funding for the realization of a planned technology operation and/or production activity, which has the potential to turn into a startup company,

13. Startupfon Crowdfunding Platform Inc. or Startupfon: The Crowdfunding Platform (Platform)

14. Promotional Information: Summary information shared with the public through any communication means regarding campaigns, including the business idea summary, the trade name and headquarters address of the startup company, names, surnames, and past experiences of the managers of the startup company or the entrepreneur and team, targeted and collected fund amounts, specified and remaining campaign durations, and qualifications of supporting investors, if any,

15. Technology Activity: The development activities carried out for the production of high value-added and competitive technological products and services, and/or the transformation of a technological invention into a commercial product, method, or service,

16. Production Activity: The process of transforming inputs into a physical product through a specific process based on a business model with high value-added and employment creation potential,

17. Investment Committee: The committee established by the platform management board to evaluate the feasibility report prepared for the project belonging to the startup company or entrepreneur, approve the crowdfunding information form prepared for the campaigns,

defines

SECTION THREE

PROVISIONS REGARDING THE ENTREPRENEUR AND/OR STARTUP COMPANY

Acceptable Projects 

Article 5- Applications made to the Platform may only be made by entrepreneurs or startup companies who need funding to carry out their activities in accordance with the relevant legislation and have developed or are developing their products. Applications that do not meet these criteria will be rejected.

Accuracy of Provided Information

Article 6- Startup companies undertake to share all information and documents shared in applications accurately. Due Diligence will be conducted by the platform for startup companies deemed suitable by the evaluation specialist. Additional documents supporting the provided information and/or documents may be requested when necessary. The startup company is obliged to provide all information and/or documents requested by the platform fully and accurately for the Due Diligence process.

Pre-Evaluation of the Entrepreneur and Startup Company

Article 7- An e-mail will be sent to entrepreneurs whose applications have been successfully completed, indicating that their applications have been received. Applications not suitable as described in Article 5 will be rejected. Suitable applications will be notified to the applicant via e-mail.

Article 8- Meetings will be held with entrepreneurs and startup companies that pass the initial evaluation for elimination purposes. 

In these meetings;

a) The compatibility and partnership structures of the entrepreneurial team will be examined,

b) The legal stage of the venture will be determined (company incorporation, brand/patent/utilities model applications, etc.),

c) The deficiencies of the venture will be revealed and a list of the needed mentors, capital, and other supports will be compiled,

d) Other subjects and needs deemed appropriate by the parties will be identified.

e) Positive/negative decisions will be made based on the necessary summary reports of discussions for the final assessment of suitable projects by the Startupfon Management.

Information and Documents Required for the Application and Crowdfunding Information Form

Article 9- The entrepreneur or startup company fills in the online application form. This form contains information and documents they can provide, depending on whether the startup company has been previously established, including the matters required by the Capital Markets Board in the Information Form.

1. The Sector of the Venture

2. The Category of the Venture

3. Region of the Product or Service (National/Global)

4. Number of Customers

5. Total invoices issued in the last year

6. Information introducing the entrepreneur and/or their team,

7. Information introducing the startup company and/or venture,

8. Information about unofficial project partners and/or shareholders,

9. Website of the venture and/or startup company

10. Social media accounts and number of followers of the venture and/or startup company

11. Photos, videos, drawings, and texts describing the venture,

12. Current Status Report

13.State support received

1. Investments received

2. Three-Year Business Plan

3. Feasibility Report

4. Market Analysis

5. Competitor Analysis,

6. Three-Year Operating Budget

7. Three-Year Investment Budget

8. Financial Statements (Including past realizations and 3-year forecasts)

9. If the startup company is established, the capital and partnership structure

10. The amount and prices of shares intended to be issued under the campaign

11. The amount of shares allocated for Qualified Investors (minimum 5% for fund requests over 3,000,000 TL)

12. Requested Financial Resource Amount (Funding Amount)

Submission of the Application to the Investment Committee

Article 10- The information and documents given in Article 10 by the Entrepreneur and/or Startup Company are entered into the online space allocated to the applicant by the platform, and the campaign page is organized. The Evaluation Specialist and Startupfon selection team conduct a detailed situational analysis and prepare a Due Diligence report that includes the following:

a. Team analysis,

b. Business model analysis,

c. Financial analysis,

d. Competition analysis and

e. Final opinion to present to the investment committee.

Formation of the Investment Committee and Meeting Procedure

Article 11- The Investment Committee Secretary is responsible for fulfilling the obligations imposed on the investment committee.

Article 12- The Investment Committee consists of at least three members.

Article 13- The majority of the members of the Investment Committee must have at least five years of experience in fields such as finance, entrepreneurship, business management, law, project consultancy, technology, industry, and trade.

Article 14- Only one member of the Investment Committee is selected from the members of the Platform’s Board of Directors, and this member possesses the condition specified in the first paragraph of Article 6 of the Crowdfunding Regulation (lll – 35/A.2).

Article 15- At least one member of the Investment Committee is selected from persons who hold a Level 3 License for Capital Market Activities.

Article 16- All members of the Investment Committee meet the conditions specified in the first paragraph of Article 6 of the Crowdfunding Regulation (lll – 35/A.2).

Article 17- At least one member of the investment committee is selected from individuals who hold the Individual Participation Investor license defined in the Regulation on Individual Investor Participation published in the Official Gazette dated 15/2/2013 and numbered 28560.

Article 18- If any of the conditions specified in the first and second paragraphs of Article 9 of the Crowdfunding Regulation (lll – 35/A.2) are lost, the Platform Management Board shall inform the Capital Markets Board within ten business days at the latest by providing the information and documents proving that these conditions have been regained.

Article 19- In the event of any vacancy in the membership of the Investment Committee, the justification for this situation shall be reported to the Capital Markets Board in writing by the platform within two business days.

Article 20- The approval of the Crowdfunding Information Form by the Investment Committee is possible with the majority decision of the investment committee members.

Article 21- Investment Committee Members cannot vote on campaign applications belonging to projects or startup companies they, their spouses, and direct or indirect relatives are directly or indirectly related to in terms of capital, audit, and management.

Article 22- If any member of the Investment Committee raises an objection to the decision regarding the publication of a startup company or project campaign on the platform, an explanation regarding this objection and its justification will be made on the campaign page of the relevant startup company or project.

Article 23- Investment committee members cannot obtain any economic benefits from startup companies or entrepreneurs in return for their activities under this Regulation, and they cannot provide more than 5% of the targeted funding amount for the campaigns they evaluate.

Article 24- Investment Committee Members may hold meetings online or physically to evaluate applications.

Article 25- Investment Committee Members assess applications based on objective criteria and without any direction or pressure and grant approval if they find the publication to be appropriate.

Article 26- Investment Committee members may meet face-to-face with the Entrepreneur when deemed necessary.

Article 27- Investment Committee members may request additional information and documents through the Evaluation Specialist if deemed necessary for the application.

Evaluation Criteria of the Investment Committee

Article 28- The Investment Committee primarily evaluates applications based on compliance with relevant legislation.

Article 29- During the evaluation, the Investment Committee uses the knowledge and experience they possess based on the Campaign Information Form reported by the Evaluation Specialist, the situational analysis report, and other provided information and documents based on objective criteria.

Article 30- In conducting evaluations, the Platform generally focuses on technology companies that are in the early stages of their life cycle. In this context, the platform evaluates the following criteria:

-The venture and startup company aim for a global market

-Provision of innovative engineering solutions and industrial products and/or services

-Emphasis on sustainability and the circular economy concept

-Proximity to commercialization stage

-Carrying out technology-based activities

Article 31- The Investment Committee acts to safeguard the rights and interests of potential investors who will invest in the respective venture during the evaluation stage.

Article 32- It does not accept business ideas related to alcohol, tobacco products, drugs, gambling, and activities that may constitute legal crimes.

Procedure for Acceptance and Publication of the Campaign

Article 33- The application is considered accepted with the majority decision of the total number of members of the investment committee, and it is sent to the Platform for publication by the Project Specialist. After the necessary preliminary studies and processes by the platform, the application is published for fundraising.

Procedure for Rejection of the Campaign and Notification

Article 34- If the majority of members of the investment committee decide against the application, it is deemed to be rejected, and the applicant is notified by the Evaluation Specialist, along with the reasons for rejection.

Intellectual Property Rights

Article 35- The Entrepreneur and/or Startup Company applying to the Platform is deemed to have accepted and declared that all information documents submitted and all of their contents are under their intellectual property rights. If a contrary situation is determined, the application will not be assessed or if processed, the operations will be immediately canceled.

SECTION FOUR

OTHER MATTERS

Other Matters Not Included in the Policy 

Article 36- Matters not regulated in this Policy text and other issues related to the scope of the Policy are subject to the other Policy text issued by the Platform, circulars, and provisions of laws regulating capital market transactions and other relevant legislations.

Changes to the Provisions of the Policy

Article 37- The authority to change the provisions of the Policy belongs to the board of directors upon the recommendation of the board member responsible for internal control.

Execution 

Article 38- The provisions of this Policy are executed by Startupfon Crowdfunding Platform Inc.

Enforcement 

Article 39- These Policy provisions are accepted by the Board of Directors of Startupfon Crowdfunding Platform Inc. on the decision dated 29/11/2022, and become effective as of the date of the decision.