An online capital and investment access window dubbed Mbadala has set up the first equity crowdfunding platform in Tanzania. It provides capital for Tanzanian entrepreneurs and offers investment opportunities for Tanzanian retail investors.
The platform links start-up owners with potential angel investors as crowd funders Crowdfunding is the process by which small amounts of capital are raised from many investors through an online platform.
Unlike traditional financing models, crowdfunding platforms give entrepreneurs an opportunity, to build, showcase, and pitch their businesses.
“Mbadala is no different, we plan to help Tanzanian companies raise small amounts of equity capital through online campaigning to multiple retail investors,”” said the company’s
The company is a crowdfunding platform linking start-ups and individual angel investors in Tanzania. The platform helps entrepreneurs with great ideas find the capital they need while getting technical support for their businesses.
“The platform, owned and managed by SSC Capital, will provide an alternative source of finance to MSMEs, that would hardly be available in normal financial sources,” he added.
“Our main objective is to help these early stage start-ups access finance, grow their businesses, and be ready for VC funding,” he detailed.
Other than proving funding for the start ups, Mbadala also provides the opportunity for investors to select projects as angel investors and earn stakes in the selected company portfolio.
The platform supports micro investments between TZS 10m to as high as TZS 500m per transaction. SSC will oversee the registration of the businesses to the platform, and provide technical support to both the business owners and angel investors. All initial deal making processes are done online, followed- up with other final processes off-line.
Mbadala’s Benefits to Investors
Investors will realize their investment return in the event the company you have invested in makes an ‘exit’ in the future.
Different types of exits will be used that include a trade sale, IPO or share buyback.
These options are different for each company, as shall be stipulated in the pitch. A pitch with no clear exit option will not be registered.
The Risk factor
Entrepreneurs using our platform to raise funds are private start-up, early stage or small or medium sized companies. Investment in these types of businesses is very speculative and carries high risks.
Investors may lose the entire investment or may not be able to recoup the investment, and as such, you must be in a position to bear this risk without undue hardship. 4.
The actual performance of businesses could differ materially from the anticipated performance disclosed by the pitch, and as a result, the investor may or may not get back to the original investment.
One should always rely on their own evaluation, or seek independent advice, to assess the merits and risk of the investment before investing.
ALSO SEE: https://www.exchange.co.tz/half-of-bureaus-in-tanzania-to-close/
