1. CROWDFUNDING: CONCEPTS
AND APPLICATIONS 2
P R O F E S S O R D R . M D . AM I N U L I S L AM
V I S I T I N G P R O F E S S O R
E AS T D E LTA U N I V E R S I T Y
a m i n s a z e a @ g m a i l . c o m
W h a t s Ap p : + 6 0 1 6 4 0 4 9 0 8 7
M Y Y O U T U B E C H AN N E L :
P L AT F O R M F O R R E S E A R C H A N D D E V E L O P M E N T
h t t p s : / / w w w . y o u t u b e . c o m / @ P r o f A m i n u l I s l a m
2. Take Aways from the previous slides
Using Video Campaign
Starting with a Strong Team
Ensuring that the Proposal is Written in Good English.
Proofreading is the key here.
“The First Impression is the Last Impression”. Creating
stronger impact at the beginning with coordinated efforts and
justified appeal.
Using a good model (Female seemed to be working better)
3. The Challenge - The Mobile Revolution ::
Mobile
Social
• Interaction and sharing is the new deal
• Learning from the customer is crucial
• Social Networks are crucial for information distribution
Traditional
• Users and developers still keep one foot in the non-
mobile world
• A site must also work on a traditional desktop with mouse
• Many users do not appreciate too fast changes
• Smartphone users are more eager to find content fast
• Apps must be functional, simple and elegant
• Multi platform usage is preferable
Changes
• Moving from desktops and laptops to smartphones is a
challenge
• Responsive Web Design is used for many screen sizes
• Web sites must conform to both touch and non-touch
screens
4. The Live Site Experiment ::
Crowd Navigator
Blogging with Wordpress
Social media interaction
Responsive Web Design
Cross-platform coding with HTML & JavaScript
Smartphone look PC browser look
5. How does crowdfunding
work?
The basic principle is that you set a
target sum to raise and a timeframe
within which to do it.
You then place your project on a
publicly available platform and
encourage people to visit the page
through an active and planned
outreach program using tools like
social media and email.
6. How does crowdfunding
work?
The intention is to appeal to as many of
these visitors as possible so that they
contribute funds to your project and
share this news with their own network.
You collect the financial pledges made
with the intention of reaching the target
set.
10. Crowdfunding
around the
world
• The crowdfunding industry keeps growing fast—
the fastest in Asia, with 210 percent year on year
growth (Massolution 2019), driven by countries such
as
• China (estimated between US$60 billion and
US$100 billion),
• India (US$27.8 million),
• The Philippines (US$26.9 million), and
• Nepal (US$25.5 million) (Allied Crowds 2016).
• In Africa, crowdfunding platforms raised US$37.2
million in 2019 in Kenya, Rwanda, Tanzania, and
Uganda (Allied Crowds 2019b).
12. OVERVIEW OF CROWDFUNDING IN
MALAYSIA
• The Malaysian crowdfunding industry is young. It first made news in 2015. The
Deputy Finance Minister announced that 6 companies were approved by the SC
Malaysia and could now provide crowdfunding services under the Bill regulating
this niche.
• Since that time, RM199 million have been raised benefiting 150 issuers
through 159 campaigns.
• In the aftermath of the COVID-19 pandemic, the SC Malaysia took measures to
increase the investment demand on the alternative markets:
• granting of a limited tax deduction to individuals for amounts invested in ECF
ventures
• the upper limit for ECF fundraising was increased to RM10 million
• Companies with up to 10 million paid-up capital got access to the crowdfunding
market
• A secondary trading framework (secondary market) for ECF and P2P backers was
launched to create exit opportunities for backers
13. OVERVIEW OF CROWDFUNDING IN
MALAYSIA
As a result, RM631.04 million were raised by issuers on ECF and P2P
financing platforms in 2020 (to compare, in 2019, RM441.56
million were raised.
The regulator reports that 57% were raised for business expansion
while 97% of financing issuers raised funds for working capital.
Also, in 2020, issuers shifted towards larger fundraising amounts,
with 84% of campaigns raised beyond RM500,000 mark.
Speaking about p2p financing, since 2017, 2,801 issuers managed to
raise a total of RM1.14 billion through 15,862 successful
campaigns, 77% of which involved shorter-term financing.
14. TOP MALAYSIAN CROWDFUNDING
COMPANIES
To help you better research the Malaysian market and define your
competition in a particular niche or business model, we’ve gathered a few
crowdfunding platforms there. Check out the most popular crowdfunding
companies from Malaysia.
CapBay – a crowd lending company, the provider of p2p business loans to
businesses of all sizes who can obtain short-term financing and banks and
investors who want to participate in high-quality financing deals.
Funding Societies Malaysia – another company operating in the area of
business lending. The company supports SME owners by providing access
to funding from individual and institutional investors.
pitchIN is a registered operator in Malaysia offering companies to raise
funds from the general public and investment community.
MyStartr is the leading fundraiser for creative projects in Malaysia.
GiveMy is the online fundraiser helping educational projects get the
necessary funding.
15. TOP MALAYSIAN CROWDFUNDING
COMPANIES
Ethis Group – an Islamic equity crowdfunding company operating in several
markets (Indonesia, Malaysia, and Dubai). The company brings
entrepreneurs and the community of investors together.
Ata Plus is a blockchain enhanced Equity Crowdfunding online platform
matching world-class businesses and investors.
Crowdo – a digital financial solutions platform powered by Neobank
technology for SMEs in emerging markets.
Eureeca is a multi-regulated equity crowdfunding platform offering high-
yield potential investment opportunities from the Middle East, Europe, and
Southeast Asia.
Fundnel is operating as a private investment platform leveraging
technology and data for new opportunities in growth & pre-IPO companies.
16. CROWDFUNDING REGULATIONS IN
MALAYSIA
There are guidelines and requirements for different market players including
investors, issuers and platforms. Here’s a brief overview of the rules that
Malaysian crowdfunding platforms and other players are expected to follow
and be aware of:
Platforms should:
operate in a fair and transparent manner
manage risks associated with crowdfunding activity
protect investors and their interests
make sure there are necessary people, tech and capital resources
allowing platforms to act as middlemen
control the fundraising and investing limits
17. CROWDFUNDING REGULATIONS IN
MALAYSIA
There are guidelines and requirements for different market players including
investors, issuers and platforms. Here’s a brief overview of the rules that
Malaysian crowdfunding platforms and other players are expected to follow
and be aware of:
Issuers should:
• comply with the registration rules
• raise up to RM3 million within a 12-month period, the total maximum
amount of funds raised is RM10 million
• disclose business and financial information
• not advertise their offerings except through the crowdfunding platform
18. CROWDFUNDING REGULATIONS IN
MALAYSIA
There are guidelines and requirements for different market players including
investors, issuers and platforms. Here’s a brief overview of the rules that
Malaysian crowdfunding platforms and other players are expected to follow
and be aware of:
Investors should:
comply with the investment limits, they’re different for different types
of backers: sophisticated (no limit), angel (max – RM500,000 within
a 12-month period;), individuals (max – RM5,000 per issuer)
The SC Malaysia regulates P2P financing platform operators by
registering them as Recognised Market Operators.
Regarding the regulatory environment in Malaysia, the majority (80%)
of platforms reported that the current regulation was adequate and
appropriate.
21. Choose your platform
Each will have their own processes for setting up – but you’ll
basically need to have username and password and then you can
get started. US based ones such as Kickstarter and Indiegogo,
most well known with vast international audiences.
There are few UK based like Buzzbank, or Spacehive.
22. Choose your platform
IndieGogo is Open to any kind of project, anywhere in the world.
IndieGogo offers a lot of tools and support to track your project. It’s also helpful in that it
offers the opportunity to keep money raised from campaigns that do not reach their goal.
Smooth integration into social media and individual websites and a robust set of
analytics tools to track your progress round out its benefits.
Fees: IndieGogo features two funding plans:
• Flexible. 4% if you meet goal, 9% if you don’t, but you keep your money in either case.
• Fixed. 4% if you meet goal, no fees if you don’t and you get nothing in the latter case –
donations are returned to contributors.
Goals: Flexible or fixed plan. In flexible, you get whatever you earn. Fixed, meet goal or
nothing, but you can keep anything you earn past the goal.
23. Choose your platform
Kickstarter is the biggest of the crowdfunding sites. It has raised approximately
$100 million in funding in 2011, and is on-track to raise upwards of $250 million or
more in 2012.
Kickstarter is open to any kind of project, anywhere in the world – but although
anyone can be a funder, to create a campaign, you must have a U.S. presence and,
theoretically, tax ID. Approval is required to launch campaign.
Kickstarter provides many levels of support from the time you begin developing your
campaign until after it is completed. The site offers smooth integration into social
media and individual websites, great online help, an analytics dashboard that helps
you track your project progress and see where your pledges are coming from, and a
post-campaign survey tool.
Goals: Meet goal or get nothing. You can keep anything over your goal, though fees
still apply
24. Choose your
platform
Kickstarter charges a 5% fee from the project’s
funding total if it is successful, as well as an
additional 3-5% for payment processing. (Tip: set
your project goal to include these additional costs).
The fees are 5% of the cost of the project (before
any additional fees are added). If projects fail to
raise the money they need, there are no charges.
All fees are calculated automatically and are built
into the total project cost. Fees are transparently
displayed both in the Project Promoter's dashboard
and in the "costings tab" on each project page.
25. Choose
your
platform
GoFundMe
Monthly Traffic Estimate: 2.3M US.
Funding: You will get the funds earned for projects,
regardless of whether the project reaches its goal.
Fees:
Free to sign up.
7.9% + $0.30 per donation [5% (GoFundMe)] + [2.9%
(Stripe) + 0.30Euros/donation]
or 9.25% total fee for non-profit projects.
Categories: National News & Events, Accidents &
Emergencies, Animals & Pets, Babies, Kids, Family,
Business, Celebrations, Community, Competitions, Creative
Arts, Dreams, Education, Funerals, Medical, Missions, Non-
Profits, Charities, Sports, Travel, Volunteer, and Weddings.
Project Duration: No deadlines unless you choose an All-or-
Nothing campaign.
26. Choose your platform
Spacehive
Spacehive’s founder describes it as “an online funding platform for
neighborhood improvement projects” – and primarily for those based in
England at that. Approval is required to launch a campaign.
Fees: Scale with size of project. Money is in English Pounds.
Goals: Meet goal or get nothing. You can’t earn more than the goal you
set.
27. Choose your platform
Ulule
European/international focus, default funding in Euros, but supports other currency
options.
Also focused on projects that are “for the betterment of society.” People can
additionally “like” projects and the number of likes is displayed with the project
listing. Approval required to launch a project.
Fees: 5% on funded projects plus 3.4% commission to PayPal and $0.25 per
transaction. No charges for projects that are not fully funded.
Goals: Meet goal or get nothing. You can earn an unlimited amount past the initial
goal.
28. Choose
your
platform
Crowdcube
Based in the United Kingdom, serves as a
platform for small investments in UK
businesses and startups.
Each project runs for 90 days. Equity in the
company is given in exchange for donations.
Incentive rewards are also recommended.
Must be 18 or older and be legally able to
create a UK based limited company to utilize.
Fees: £250 (currently waived) plus 5% of
realized goal. Also £1750 in legal fees. No
charges if the project fails to meet its goal.
Goals: Minimum £10,000 goal. No maximum.
All or nothing
29. Choose
your
platform
33Needs
This crowdfunding service differs in several ways
from other crowdfunding sites.
Its primary strength comes in the form of profit
sharing: In exchange for donations, backers are
promised a percentage of profits for a set amount of
time.
This is especially relevant to entrepreneurs starting
new ventures who are willing to share profits with
backers (Equity Crowdfunding), who are betting on
the project’s success and end up with a strong stake
in the outcome.
The focus is on business startups as opposed to
other sites, which tend to be more project-oriented.
Fees: 5% plus transaction fees.
Goals: All or nothing. Can earn more than goal.
31. What can I fundraise for?
• Pilot projects
• Capital projects
• Equipment
• Feasibility Studies
• Community events
• Temporary uses
• Festivals
32. Why is
crowdfundin
g growing?
Making a public call to fundraise from the
crowd is not a new idea but crowdfunding as
we now understand it has grown very quickly
for a number of reasons since its emergence in
the 1990s. These include:
Technological developments - The
emergence of wide and low-cost access to the
internet and communication tools like social
media mean it is easier and cheaper for us to
reach out to much more widely dispersed and
larger groups of people.
Societal changes - These technical changes
have also empowered us to take on new
activities which were once controlled by
gatekeepers. We can see this in the was people
write and publish books, publish music,
writing blogs, and the general sharing of our
lives online.
33. Why is crowdfunding growing?
Economic factors - The other key
factor in the extraordinary growth of
crowdfunding is that after the
financial crisis of 2008, access to
funding has been more problematic
and so people are exploring
alternatives to the traditional
sources.
At the same time interest rates have
fallen to historically low levels and
so “retail investors” are looking for
better places to put their
investments and some
crowdfunding campaigns seem to
offer better returns than would be
available on the high street.
34. The Benefits of Crowdfunding
From tapping into a wider investor pool to enjoying more flexible fundraising options, there
are a number of benefits to crowdfunding over traditional methods. Here are just a few of the
many possible advantages, which we’ll cover in greater detail later in this guide:
• Reach – By using a crowdfunding platform like Fundable, you have access to thousands of
accredited investors who can see, interact with, and share your fundraising campaign.
• Presentation – By creating a crowdfunding campaign, you go through the invaluable
process of looking at your business from the top level—its history, traction, offerings,
addressable market, value proposition, and more—and boiling it down into a polished,
easily digestible package.
• PR & Marketing – From launch to close, you can share and promote your campaign
through social media, email newsletters, and other online marketing tactics. As you and
other media outlets cover the progress of your fundraise, you can double down by steering
traffic to your website and other company resources.
35. The Benefits of Crowdfunding
Validation of Concept – Presenting your concept or business to
the masses affords an excellent opportunity to validate and
refine your offering. As potential investors begin to express
interest and ask questions, you’ll quickly see if there’s
something missing that would make them more likely to buy in.
Efficiency – One of the best things about online crowdfunding
is its ability to centralize and streamline your fundraising
efforts. By building a single, comprehensive profile to which
you can funnel all your prospects and potential investors, you
eliminate the need to pursue each of them individually.
So instead of duplicating efforts by printing documents,
compiling binders, and manually updating each one when
there’s an update, you can present everything online in a much
more accessible format, leaving you with more time to run your
business instead of fundraising.
36. What makes
crowdfunding
different from
other
funding?
Crowdfunding reaches widely by using
technology and reduces the size of
funding each individual contributor has to
come up with. Making it easy for a wider
group of people to support a business or
project. This means that there is a range
of reasons why people might support you,
and not simply for a financial return.
Because the process of crowdfunding is
a very public one and involves many
people it can, and does, bring many more
advantages than simply money. It can be
a powerful campaigning tool, it can build
networks, validate an idea, build
awareness and many other things, all of
which can be very valuable and useful.
37. What makes
crowdfunding
different from
other
funding?
For some entrepreneurial projects, it has
the advantage of accelerating the process of
setting up a business by allowing the
entrepreneur to run in parallel a series of
processes like market research, publicity and
marketing and fundraising, which have often
traditionally been seen as sequential.
38. Crowdfunding:
What are the
advantages?
It is a very accessible process which is open
to all and can be carried out on your terms –
you decide on the amount you want to raise
and the timescale to raise the funds.
You are in control – the promotion and
selling of the project is the responsibility of
your group.
It can bring much more than money – it can
attract new people and support
(nonfinancial) to your group.
39. Crowdfunding: What
are the advantages?
What money it does bring can be very different from traditional investment –
funds raised through crowdfunding are unrestricted and can be used for all
elements of your project.
It can be quick – as you are in control you are able to work quickly to start raising
funds.
You will also produce a very valuable asset for you or your organization as you
run a campaign and that “crowd asset” can be a very useful and enduring resource
– people who support your project are also likely to support your group.
40. What are the
disadvantages?
It is may not be easy for certain projects – to be a success
takes a lot of time and effort to carry out continued
promotion of your campaign.
Many campaigns are unsuccessful and the successful ones
take work, preparation and effort to make them happen –
there is no guarantee of success but work, preparation and
effort can increase the chances of success.
It is also a very public process and so you must be prepared
to be open and honest in a public arena and expect
brickbats and bouquets in equal measure – it is important
to accept that there may be public scrutiny of your project
and prepare for this.
41. But is it worth it?
(from – Capital Crowdfund Advisors Report on 73 campaigns)
1. Does Crowdfunding produce sales?
Yes. Across all methods (rewards, debt and equity). Average quarterly
increase in sales (not including the revenue raised through
crowdfunding) of 24%. For equity-based raises an average of 341%
increase in post crowdfund quarterly sales.
2. Does Crowdfunding create jobs?
Yes, it does, though not in large numbers. 39% of respondents hired
an average of 2.2 new people after crowdfunding. An additional 48%
reported the intent to use the crowdfunding proceeds to create additional
jobs.
(Source: http://www.forbes.com/sites/cherylsnappconner/2014/01/21/new-
report-the-roi-of-crowdfunding/#11eb81225cd8 )
42. But is it worth
it?
(from –
Capital
Crowdfund
Advisors
Report on 73
campaigns)
3. Does Crowdfunding deter follow-on
investment?
No. Within three months of successful
crowdfunding, 28% had completed rounds
of traditional investment with angels or
traditional venture capitalists. An additional
43% were in talks with institutional
investors.
4. What is the ROI of Crowdfund
Investing?
Every hour invested in a crowdfund
campaign returned $813 on average.
Source:
http://www.forbes.com/sites/cherylsnappconner/2014/0
1/21/new-report-the-roi-of-
crowdfunding/#11eb81225cd8
43. Reflections …. What next?
1. Shift in platform
management from
idealistic activists to
professional
entrepreneurs.
2. Platforms shifting
from technology to
community focus.
3. From domestic to
international expansion
of platforms.
4. Ongoing rise of
equity-crowdfunding.
5 Rise of niche
platforms (real-estate,
renewable energy,
sports).
45. Reflections …. What next?
6. Front and/or back-
end consolidation of
small platforms.
7. Regulatory
amendments and
adaptations across
countries.
8. Crowdfunding
education will increase
and move to
mainstream.
9. Increasing
professionalism of
campaign
management.
10. The crowdfunding
campaign support and
preparation industry
will grow, especially
with respect to equity.