Is there a difference between Crowdinvesting and other types of Crowdfunding?
Yes, crowdinvesting involves investing in exchange for equity or interest, whereas other forms of crowdfunding are based either on rewards or donation, whereby there is a
In the case of crowdfunding, it has existed for much longer than crowd investing and usually has a charitable or artistic project where the reward is usually non-monetary. Crowdfunding can be divided into multiple models, ranging from donations, philanthropy and sponsorship (where no financial return is expected) to lending and revenue sharing.
Crowdinvesting is an internet-enabling way for businesses or other organizations, equity-based crowdfunding that is raised online. Investors usually focus on the exit strategy of the company and benefit from the profits of the start-up. Crowd investing in particular goes through a rigorous due diligence process with the entrepreneur/startups in order to decide on its viability.
What is Crowdfunding for Equity? Specifically – what is equity?
Equity crowdfunding is the name given to the process whereby people (the “crowd”) invest in an unlisted company (a company that is not listed on a stock market) in exchange for shares (decided by the entrepreneur and a fair valuation by VentureFin) in that company.
Am I a part of the crowd?
The crowd is anyone who sees your product/service featured on the website. These are potential investors who believe in your business and are willing to exchange equity shares for money.
Do you think that crowdinvesting/crowdfunding replaces VC firms and angel investors?
Online marketplaces are nothing new. The world has seen a disruption in how business and engagement happens, given the exponential rate at which people are going online. There is an implicit expectation today that most transactions can be done online – everyday we use platforms like Etsy or Ebay where a marketplace is created online to connect retailers and buyers.
Crowdinvesting or equity crowdfunding does just that for investing – we are an online marketplace allowing the average person to invest in businesses they believe in. Our model focuses on SMEs who for the most part require funding to grow, expand and scale. At VentureFin.com we provide solutions for SMEs that are potentially too early stage for a VC. We also ensure to elevate the governance for SMEs by requiring a standard set of documents that often don’t exist (i.e. business plans and financial forecasts).
This means that crowd investing through VentureFin.com will function as an early enabler for VC firms and angel investors to spot growing companies and especially in markets they may not be active in. Our platform allows for a fragmented investment process to become simple, accessible and organized by bringing together investors and SMEs in one place from across the world and emerging markets.
What can the crowd do on VentureFin.com?
On VentureFin, the crowd can take a look at our potential businesses or organizations that are exchanging either equity in their business or offering an interest rate in exchange for a loan now. The crowd can meet the entrepreneur and ask VentureFin for a due diligence on the company.
I am an entrepreneur and have started my venture and need to raise funding, can I use VentureFin?
VentureFin has access to a large network of qualified investors worldwide who will look at your business. In the case of new entrepreneurs who might not meet our criteria, VentureFin also provides advisory for the company or organization in order to launch on to the platform and meet our investor standards.
What type of companies are restricted from applying to the VentureFin platform?
Alcohol, tobacco, gambling, weapons, pharmaceuticals, companies that test on animals, companies engaged in child or slave labor, and pyramid-schemed business are barred from the VentureFin platform.
Why should I consider crowd investing for my company?
This completely depends on the stage of the company, depending on whether your business or organization has already raised a round previously or is planning to raise one for the first time. Crowdinvesting gives you the added benefit of a number of ambassadors; those who have invested into your proposal, allowing you to leverage their involvement and increase your marketing. VentureFin, in addition, allows you to access institutional funding as well via the platform.
If my business is located outside of the UAE, am I able to fundraise on your website?
Yes you are! VentureFin is a global platform providing a global solution for businesses and investors to connect online. Given that we are launching VentureFin in the Middle East region we anticipate the initial interest will start here.
As an entrepreneur, what criteria is needed from me to receive funding from VentureFin?
If a business or organization is searching for funding beyond the seed stage then VentureFin is the place to be. By displaying your business on our platform you will gain visibility to many different types of investors increasing the chances to get funded over the period of time your are on the platform.
Our criteria include:
o Post-seed capital
o Viable business model
o Fair valuation
o Strong team
o Business passes VentureFin’s in-house Standard Criteria, explained after sign-up
If this is you, sign up on: www.venturefin.com today.
What is VentureFin’s process to put a funding proposal online?
VentureFin is an online platform allowing entrepreneurs to raise funds for their business within 60-90days from the crowd. To upload your funding proposal: (Click Here)
1. Sign up and submit your business proposal online
2. VentureFin team reviews your proposal based on criteria & eligibility standards
3. VentureFin plus third party audit review of proposal
4. The next few points are the three scenarios your business can go through once we have reviewed your proposal:
a. Scenario 1: If your business is between 60-80% then you will have the option to go through VentureFin Advisory and vetting and furthermore published scenario A and if the proposal is not fully funded in given timeframe
b. Scenario 2: If your business is below 60% it will not get published on the platform
c. Scenario 3: If your business is above 80% then it will get published on the platform, if published scenario B the proposal was fully funded and the funds are released to the entrepreneur
What does VentureFin require from me to publish on to the platform?
Simply sign up as an entrepreneur and then submitted your pitch deck and financials to be reviewed by the VentureFin team, once approved you will be able to move on to the next step and create your funding proposal. After approval, VentureFin sends you a mandate that will restrict you to raise funds on VentureFin’s platform for the 60 or 90 day period you are live on the site. Any and all funds raised must be set in a round and must go through your campaign on VentureFin’s platform.
Who is the crowd?
The crowd is made up of anyone who wants to invest in businesses they believe in. Typically it is made up of an SME’s family, friends, fans, social networks and general public. We at VentureFin also open the proposals to our own investor network and institutional investors.
How much time do I have to create my fundraising proposal?
After submitting your pitch deck and financials you may take the desired amount of time to create your proposal.
How long will my project be live on the platform?
You have the option of selecting either 60 or 90 days in which to raise your funds. You also have the option to keep your proposal live through a lead funding round, in case you have reached your target well within the 60 or 90 day timeframe.
Once I have been put on your platform how can I increase my chances of reaching my target in 60-90 days?
We are selecting only the top-tier level of start-ups onto our platform. If you are able to make it into the 80% range of our criteria, then you have justified to majority of investors why they should invest in your company. You can push your own campaign throughout your own network, via friends, social media, partners, your initial investors, friends, and family. VentureFin commits to doing the same on your behalf simultaneously.
What do we expect from the entrepreneurs while their campaign is live on our platform?
We highly recommend you to self-promote your campaign through all social media channels specifically through your family and friends. VentureFin is at your disposal for any high-level requests.
If I reach my goal before the 60 days or 90 days what happens to my live proposal?
If your proposal is fully funded before your funding date before the 60 or 90 days the campaign will be deemed success or closed. However, if you wish to keep it open, you can pursue a Lead Funding round which allows you to raise over and above your targeted amount until the time limit has been reached.
Does VentureFin charge anything to the entrepreneurs for lanching a campaign on the platform?
Launching a campaign on the platform is free, though VentureFin takes a success fee of 5-8% (decided on a case by case basis).
Once my proposal is live, can I alter my funding target? Can I edit the proposal itself?
No, the initial amount requested and the equity offered needs to remain the same for either the 60 or 90 days you have chosen. In reference to the proposal itself, VentureFin allows for certain changes to be made regarding content, media, pictures and videos, although the amount of equity for sale cannot be altered at any point.
How can I ensure my valuation is fair?
After your proposal qualifies it to the next round we will make sure to guide you through any questions related to your valuation.
Can citizens/residents/ of the United States invest on the platform?
No, we do not accept investors who hold a United States passport, or are residents of the USA, or have bank accounts based in the USA. The SEC has adopted the final rules to allow companies to raise through crowdfunding, VentureFin is monitoring the situation until the law comes into effect.
When you invest in a proposal what do you receive in return?
Investors receive equity or shares in the business in which they have invested. The level of investment will dictate the number of shares earned.
Who can be a VentureFin investor?
Our investor network include private individuals, institutional bodies, investment funds and angels.
As an investor, what makes the proposals on VentureFin.com attractive to me?
As part of our access to high impact global entrepreneurs and business we aim to provide the everyday investor with investment opportunities they would not normally have access to.
How do I become a VentureFin certified investor?
The process includes a four step process. To commence, sign up on the VentureFin platform with your credentials and it will take you to a test that will determine what type of investor you are. The next step includes submitting a certified passport copy and a utility bill. Afterwards, once the KYC checks out you are free to invest.
What fees are incurred once I’m registered as an investor?
First time investors will have to pay $20 for a KYC compliance check. Additionally, a $20 fee will be debited on all incoming transfers into the VentureFin administered account.
How do I upload my balance onto my VentureFin account?
Log on to your profile, click on the balance section and our bank details are on the right hand side of the page. Please transfer your desired amount to the VentureFin account and ensure to submit transfer details on the balance page after you have transferred in order for VentureFin to track it. Once received, we will upload your balance.
I am a registered investor, what can I do on your platform?
Once your balance has been uploaded you are free to invest in any proposal.
How can I trust the proposals on your platform have been screened correctly?
At VentureFin all the proposal undergo two levels of due diligence. The first one has been done internally and the second by a third party. If you have any concerns regarding the sincerity of the funding proposals please feel free to reach out to the VentureFin team personally.
What type of entrepreneurs/business will be on the platform?
On the VentureFin platform, we will showcase any social enterprises, round A or round B funding opportunities and any mature business looking for a loan.
How many proposal are live at once on the platform?
There is no limit to how many businesses we will have on our website at one time however, the crowd will be able to filter businesses by industry and crowd rating on the VentureFin site.
What is the minimum/maximum I could invest on the VentureFin platform per proposal?
The minimum investment depends on the share price valued by the entrepreneur. There maximum would be the value of the remaining amount of shares in the proposal.
How do I know your platform is secure?
Safety and security is of utmost importance for VentureFin. Our fund is administered by APEX fund services.
What does the legal due diligence cover?
It covers the legal and financial aspects of the business proposals.
What happens when I make an investment commitment?
Once you make a commitment for investment, you have to wait for a funding proposal to be completed. Once it’s been complete the VentureFin team will get in touch with you regarding the share transfer. The investment cannot be withdrawn once the commitment has been made, the only scenario in which an investor can get his money back is if the proposal was not funded 100%.
As an investor, am I able to withdraw my money at any time from my own account?
Yes, the funds that are in your VentureFin account at any point as long as you are not trying to withdraw funds from an ongoing project than everything else is your balance on the platform.
Are investors able to contact the entrepreneurs directly on the platform? and vice versa?
Yes, we encourage you to communicate and engage directly under the proposal on the bottom left side. The entrepreneur will receive a message in their inbox from the investors that are trying to get in contact with them. No, the entrepreneurs are not able to reach out to the investors directly unless the investor has approached them first.
If the funds have been raised when do I get my shares?
You will receive your share certificates after our legal team have completed the necessary process from their side. This takes some time and in normal circumstances we aim to provide you with the share certificates within 6 weeks of the funding window closing.
Does VentureFin offer any additional services for their entrepreneurs?
We offer ongoing support for both the entrepreneurs and the investors. the entrepreneurs can also take advantage of the VentureFin advisory option, for more information click here ←
Once the investment commitment has been made, how are my funds transferred to the entrepreneur?
When you make an investment commitment by clicking “invest now” on any proposal, all you are doing is making a commitment to invest your funds held on account with VentureFin.com. Your money is held within our segregated client account and is only paid out to the entrepreneur’s account once the full funding target has been hit and we have completed the necessary share transfer process to you. If the target has not been hit within the allotted timeframe, your funds will be returned to your VentureFin account to either use on another proposal, or withdraw back to your personal account.
Am I required to deposit funds onto my VentureFin account in order to be able to invest?
Yes, VentureFin has to confirm that your funds have been received and cleared, after which your VentureFin.com account will be updated. Once that is completed, you are able to invest in any proposal you choose.
A campaign I have invested in is live on VentureFin, am I allowed to promote it elsewhere?
To ensure the success of their crowdfunding campaign, we encourage them to market their campaign through several social media platforms and websites. Similarly, you as an investor become an ambassador for the company, and are free to promote the investment opportunity to your network provided they understand it can only be funded via the VentureFin platform during the 60 or 90 days it is live on the website.
How do I receive my shares?
When a business proposal is fully funded, VentureFin transfers the share certificates via our Fund Administrator Apex Fund Services directly to the investor.
If a business reaches their target, how can investors monitor the entrepreneur’s progress? Does VentureFin guarantee any returns on investments?
VentureFin takes care of all procedures involved in the share swap and disbursement of capital. Our fund administrators, Apex Fund Services, a globally renowned fund administration service, monitors all aspects of the share transfers, the valuations, and legal procedures regarding the swap. Quarterly reports will be created by Apex and distributed to all investors. VentureFin does not guarantee any returns on investments, but advises both entrepreneurs and investors to be as active as possible in the relationship, thereby increasing the likelihood of a successful business.
What happens to the investors’ shares if the entrepreneur decides to raise more funding post the crowdfunding?
As a result of an entrepreneur issuing more shares in their business the investors’ shares will dilute. The investor will be notified before such an incurrence happens.