Q: What is Equity Crowdfunding?
Equity crowdfunding (ECF) is a financing method that enables companies, known as "issuers," to raise capital from a broad pool of investors, often including individuals, through an online platform dedicated to ECF. In this process, issuers offer ordinary or preference shares to investors in exchange for capital, which is used to support the company's growth, development, or other specified purposes. ECF platforms facilitate the connection between issuers seeking funding and investors looking to invest in promising ventures, creating opportunities for both parties to participate in the growth potential of early-stage or small-to-medium-sized businesses.
ECF allows companies (“Issuers”) to raise funds from a large number of investors, many of whom are
individuals (“Investors”) through an online ECF platform (“ECF Platform”) by offering ordinary or
preference shares to the Investors (“Offer Shares”).
- More info in Investor Resources Hub: What is Equity Crowdfunding (ECF)?
Q: What can Investors gain from ECF?
In return, the Investors will receive Offer Shares and may expect a return in the form of dividends
and/or profits if the Issuer performs well.
- More info in Investor Resources Hub: The Benefits of Equity Investment
Q: What are the advantages of ECF?
ECF allows Investors to own certain shares in a company, where such opportunity was previously only
made available to institutional investors such as Angel Investors (as defined below) or venture capital
firms.
Q: What are the disadvantages of ECF?
Investors may lose their whole investments if the Issuer fails in its business. Other risks include illiquidity
and dilution of shares. Please read Mystartr’s Risk Warning for further information.
- More info in Investor Resources Hub: Understand, Manage and Reduce the Risks of Equity Crowdfunding (ECF)