CROWD-FUNDING entity pitchIN is the latest of several companies to launch an equity crowd-funding (ECF) platform, giving emerging companies and startups more options to turn to when they want to take their businesses to the next level.
pitchIN chief executive officer Sam Shafie said the platform was open to all kinds of businesses and not just tech start-ups.
“All we require are companies run by capable entrepreneurs with scalable businesses, and a plan on what to do with the capital they raise.
“They should also be earning revenue already. Right now, the companies we have on the platform are aiming to raise between RM100,000 and RM3mil,” he said, adding that they aimed to help between eight and 10 companies prepare their offer documents within this year.
He said their first offer would likely be launched sometime in mid-April.
“We have several lead investors on pitchIN whom we will talk to about the businesses on the platform. We believe if we can get them on board first, it will help raise confidence in other investors when the offer goes online to the public,” Sam said.
Cradle Fund chief executive officer Nazrin Hassan said they found that most investors in startups were as new as the companies they supported.
“It is as high as between 70% and 80%. They are very new to it, and I realise there was a need to better ease them into it. That’s when I talked to Sam about it. I hope this ECF will spur the start-up industry,” he said during his speech.
Apart from Cradle, pitchIN’s ECF also partnered the Multimedia Development Corporation Sdn Bhd (MDeC), Malaysian Business Angel Network (MBAN), Malaysian Global Innovation & Creativity Centre (MaGIC), Cyberview Living Lab Accelerator Programme and Mah Weng Kwai & Associates.
Sam said they had 11 lead investors on board for now, and they aimed to find more in order to cover a wider range of industries.
He also said that anyone who was not a bankrupt could be an investor on the platform, but they needed to be aware that in ECF, the rewards might not be immediate.
“Investing in ECF ventures is for the long-term. The only way to exit for now is through a trade sale or if the company goes for an initial public offering (IPO) which will then make them into a public-listed company.
“We are, however, thinking about starting up a secondary market whereby ECF investors can sell off their shares after six months of the initial ECF offering,” he said, admitting that with five other companies in the market offering ECF platforms, it was a very competitive business on their part.
“Malaysia is the first country in Asia to legalise ECFP, thanks to the Securities Commission (SC) who also approved all six ECF platforms. Among the regulations is that each company has an ECF fundraising limit of RM5mil per year,” Sam added.
The six platform approved by the SC are Alix Global, Ata Plus, Crowdonomic, Eureeca, pitchIN and Propellar Crowd+.
Sam is confident of pitchIN’s move to start their own ECF platform, which they had thought of since they were first established in 2012 as a crowd-funding platform.
“We are a pioneer company, and know what works and what doesn’t work here. I feel this is a matter of survival of the fittest until we naturally reach stability like in some other countries such as Britain and New Zealand. I think we stand a fighting chance at the very least, and it’s always to have good competition,” Sam said.
During the platform launch, pitchIN introduced the first four companies that they are in the midst of helping, namely KRU Academy, Aqua Genesis, KakiTangan and Gastrobaby.