Crowdfunding: Bank Borrowing Alternative For Start Ups

 

SSC Capital, a leading financial management firm based in Dar es Salaam, Tanzania has pioneered the country’s first equity crowdfunding.

Crowdfunding is the most plausible solution to raise start-up capital for Small and Medium Sized Enterprises (SMEs).

It is the process of raising small amounts of capital from many investors through an online platform.

Unlike traditional financing models, crowdfunding platforms give entrepreneurs an opportunity, to build, showcase, and pitch their businesses.

It is a digital platform that links start-ups and individual investors across Tanzania, while the start-up gets capital, the individual gets a viable investment option.

“The platform helps entrepreneurs with great ideas find the capital they need while getting technical support for their businesses,” says Salum Awadh CEO of SSC Capital

He went on to detail how crowdfunding provides an alternative source of finance to MSMEs, that would hardly be available in normal financial sources.

“The platform will also provide an opportunity for Tanzanians, selecting projects as angel investors in exchange of getting stake in the portfolio companies. Our main objective is to help these early stage start-ups access finance, grow their businesses, and be ready for venture capital funding…” he said.

“Mbadala is a crowdfunding platform we plan to help Tanzanian companies raise small amounts of equity capital through online campaigning to multiple retail investors,” he added.

 HOW IT WORKS

Once the SME has applied, they receive their funds within just three months.

The crowdfunding platform allows the SME to invite customers and personal network to own a stake in the business which in turn gives them the drive for long-term engagement, loyalty and advocacy, whilst also tapping into Mbadala’s investor community to drive interest and brand awareness.

“We’re the first choice for hundreds of startups and businesses in the growth stage looking to fund their next stage of growth,” the CEO points out.

The fundraising process is simple and efficient and there are additional support for special needs with a team of experts handy every step of the way.

They also provide a platform that supports legal and regulatory compliance ensuring all regulations and laws are followed and abided by.

Mbadala offers either a direct or a nominee structure, in the former, investors become direct legal shareholders in the company, which helps foster stronger relationship and advocacy for the brand.

For the latter nominee structure, a representative is the legal owner of the investment on behalf of the investors, so there is only one legal shareholder on the share register.

“We will work with you and your team to identify which model meets the needs for you and your business,” Awadh sums up.

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