Crowdfunding, blockchain technology and disruptive technology have been the invisible driving forces in our daily lives, in the most clichéd of ways. While it will take an entire book of Dummies to explain the convoluted nature of blockchain, crowdfunding is easily understood by anyone. The cue is in its name.
What has fuelled crowdfunding from a relatively obscure existence to becoming the go-to channel for millennials and the tech-savvy in need of funds to grow their start-ups is its simplicity for both entrepreneurs and the “crowd”. An individual will only need to sign up for an account, chip in an amount that one wishes and it’s done.
Back in the days when one wanted to open an F&B outlet, sources of capital usually came from parents and relatives who had spare cash lying around. Traditional businesses go through tried and tested channels. Business loans from banks and the number of hoops that a business owner has to jump through in order to secure the approval—walk into the bank, meet an officer, provide income and tax return statements, prove a sustainable stream of cash flow, sign some forms, wait for a few business days and hope for the best. You get the drill—and the despair when the bank deems your business isn’t worthy of its financing.
With the help from venture capitalists and sovereign funds whose pockets are so deep that they have helped save investment banks from rewarding their hardworking staff with 12-month bonuses—much to the bankers’ collective dismay, the Uber and the Grab of this world can raise eye-watering amount of funds in exchange for a stake in the company, and balloon in valuation without having to be floated on the stock market. Uber, for example, is valued at US$48 billion at the latest estimation, which is higher than Maybank’s, Bursa Malaysia’s most valuable company by market capitalisation. Alternative financing has grown in stature and become the way forward.
In the more traditional sphere, Bursa Malaysia has been trying to reach out to the younger generation, including establishing various investment clubs in universities to educate students on investing, and wider public through efforts like the FTSE4Good Bursa Malaysia Index, whereby constituents have to meet a stringent set of environmental, social and governance criteria in order to be included. Nonetheless, investing in shares comes with risks that are associated with wider economic conditions as well as their inherent volatility.
That’s where the simplicity of equity crowdfunding becomes apparent. There are a variety of start-ups involved in interesting projects or championing noble causes that may pique your interest. You are also saved from having to learn the difference between preferred shares and common shares.
Take for example Me.reka Makerspace @ Publika. The organisation run classes and interactive learning experiences (such as using virtual reality in the process of designing things) to teach people vocational and practical skills not taught in formal education. Its objectives include creating an eco-system that links different groups of students, communities and makers with real-world projects and income generating opportunities, as well as offering scholarships to those from lower-income communities.
The initiative is developed by the people at Biji-biji Initiative, a social enterprise championing sustainability all around Malaysia.
Through PitchIN, you can inject funds into the organisation in exchange for a stake and contribute to a good cause simultaneously. The crowdfunding platform is under the purview of the Malaysian Security Commission, reassuring that it is regulated and supervised.
If you require further reassurance and have your questions answered by the team behind Me.reka, the next sharing session will be held at Me.reka Makerspace @Publika, 10 February 2018, 3pm to 4pm.
Who knows someday you’ll be owning a part of largest crowdfunded education centre in Malaysia and maybe Southeast Asia?