In this section, we will take you through most of the information required for you to answer 2 questions:
Fundraising for start-ups and small to medium-sized companies is not easy in general and raising funds via ECF is no different. It is a time consuming and often a difficult process that can take months of preparation and planning. Investors will also want to be sure that you have the talent to drive the business to the next level and to be worthy of their investment and trust. It is also important that you have taken your business as far as you can prior to undertaking a funding round. So, if your business is no more than an idea, it’s probably best that you try to reach and exceed as many milestones as you can with it before you look to raise investment.
Under the Securities Commission Guidelines, only locally incorporated private companies and limited liability partnerships (excluding exempt private companies) are allowed to be hosted on ECF platforms.
Prior to Securities Commission's regulation on ECF, advertising and selling private limited company shares to the public was illegal. Working with a registered recognised market operator like Ata Plus, allows you to do just that, i.e. legitimately raise funds from the public.
For more information on the eligibility, requirements and limitations kindly click here to view the Securities Commission Guidelines.
A successful crowdfunding round takes work and commitment before starting the round, during the round and also afterwards. Based on our experience, we’ve highlighted below a few steps you can take to increase your campaign chances of success.
Managing your fundraising round should be one of the priorities of the company, not just something to do on the side. A key senior person should be dedicated and assigned to be responsible for the fundraising. Remember, a crowdfunding round is also a marketing campaign for your company and its products & services.
You should be able to identify and engage with your own community and others in your industry (ie. customers, partners, suppliers, etc). It would be a challenge to mobilise retail investors otherwise.
Aside from that, you should build your network through offline engagement and via digital/social media. If you are not active on social media, we recommend that you immediately start building your social media presence and get followers on the channels you deem to be relevant to your business.
ECF works for all kinds of companies and industries. We do note that the stage of the company does matter. For example, companies that are still in ideation stage generally do not do well in ECF. This is not to say there hasn’t been amazing success stories, there are, but we believe that these are just outliers. We recommend you have some sort of traction before you consider raising funds via ECF. Traction could mean a million different things depending on your business model and the industry you operate in. Generally, traction could mean, signed up merchants, a tested prototype or even a mailing list or a large social media following.
Valuing your startup is never a straightforward task, especially for companies with little or no revenue. Ultimately, investors want to see a valuation that you can defensibly back with a valid valuation method. Click here for a list of valuation methods.
“What is the exit strategy?” is the question we see asked the most by investors to companies raising funds on our platform. This obviously for good reason. Investors want to know what is their potential return and when should they realise their investment. Ensure you highlight potential exit strategies, timeline and justification.
Launching your crowdfunding campaign with indicative funds commitment (~20% of your target amount) helps greatly in the success of your crowdfunding exercise as it reduces the perceived risk of investing in the crowdfunding exercise.
Traditionally ECF campaigns are set for 60 to 90 days (it may take more or less time than this). In that time, your business will progress, numbers will change; you will acquire a new client for example or you will start testing your new app. Keep your investors and anyone who might be listening up-to-date with your business progress.
Once you raise the funds and close the campaign, keep your investors informed of the company’s progress. This helps transform your investors into brand evangelists and you’ll have a crowd that is happy to invest in your company again should you try to raise funds again. We recommend to provide them with brief quarterly reports. Our platform streamlines this process using our Investor Dashboard and templates.
Complete & Submit The Application for Due Diligence
The due diligence looks into the statutory standing of your business, past track record and creditworthiness of your business and primary team members, as well as the future business plan and financial projections.
Due Diligence Process
Upon receipt of the completed online application together with the corresponding required documentation AND payment of the application processing fee; the due diligence process will commence.
On-boarding & Aligning the Marketing Strategy
Once the due diligence is completed, then we start working on the content of the fundraising campaign and ironing out the fundraising details. Concurrently, we will also discuss with you the marketing strategy and approach to the fundraising campaign, how best to leverage them, map out the various marketing strategies and plans on various channels to maximise investor outreach and conversion.
Pre-Live Campaign Marketing
At this stage, we encourage you to start marketing your campaign and to give your community a sneak peek of the investment proposition.
Campaign Go Live
Your campaign will be live on our platform for the recommended 90 days. This is also when the marketing plan will be executed: PR (including campaign launch & closing press releases, one-on-one media interviews), Digital/Social media & Offline investor pitching events.
The following are the documents required to be submitted together with your online application.
A 3-year business plan. You can view examples of the business plans in the next section.
Certified True Copy of the latest Audited Accounts.
Certified True Copy of the latest Management Accounts (monthly).
3 years Financial Projections corresponding with your business plan (including P&L, Balance Sheet and Cashflow) with sales assumptions.
