Local Crowdfunding investment in SME

Extremely strange for EpicCentre to raise money this way.
Maybe they need to prove that they have multiple ways of raising cash
without the need to negotiate a deal with the bank or issuing new shares/bonds/etc

But overall these platforms are nett positive if run correctly. There are small sized firms in need of Cash when vying for a major contract or have already secured a major contract that is well beyond their normal contract value. Or an opportunity presents itself. It happens but it is rare.
Investors get more choices, higher yield for their idle money.

(15-03-2016, 01:36 PM)Big Toe Wrote: Extremely strange for EpicCentre to raise money this way.
Maybe they need to prove that they have multiple ways of raising cash
without the need to negotiate a deal with the bank or issuing new shares/bonds/etc

But overall these platforms are nett positive if run correctly. There are small sized firms in need of Cash when vying for a major contract or have already secured a major contract that is well beyond their normal contract value. Or an opportunity presents itself. It happens but it is rare.
Investors get more choices, higher yield for their idle money.

I reckon, there are different needs, either long-term trade finance facilities, or short-term working capital loans. The former, are still more feasible from conventional means, but the later are alternatively via crowdfunding now.

(not participated in any crowdfunding activities)

SINGAPORE — Banks are upping their ante to serve small and medium enterprises (SMEs) and start-ups. In recent weeks, some banks have announced more support for loans and crowdfunding options for this sector.

....United Overseas Bank partnered OurCrowd, a crowdfunding start-up to give its clients access to equity crowdfunding opportunities globally...

Source

I may be slowed in this regard, but to me this is an Interesting but expected development .

What kind of roles do banks play in these crowdfunding site? 
Do they actively participate in giving out loans or are just underwriters? 
Are they still subjected to certain regulations and are these off balance sheet items?

http://www.dealstreetasia.com/stories/la...nse-34621/

in 26 hours, Epicentre raised 1 mil. Not bad.

But now subscription for the third tranche of notes has slowed down a lot. Guess retail investors do not have much ammo left. Nevertheless a quick look at EpiCentre balance sheet reveals losses are accumulating and it is quite weak. Current cash holdings is 4.5 mil with 6.5 mil receivables vs trade payable of 13 mil and current borrowings of 5.1mil. Furthermore, ops cash before WC changes is about 600k annually, interest expense due to moolahsense and bank will wipe off 50% of that.

For Moolahsense retail investors, holding the equal installment notes is likely to be safe. As for those holding the callable bonds, Epicentre will likely hold to the end. Epicentre needs to roll over its debt constantly to survive. So with its "2 mil revolving credit facility" with moolahsense, lets see how it goes.

I am mulling to split epi center related posts, and merge them into the company thread, for ease of reference later.

Any objection from the ground?

Regards
Moderator

(21-03-2016, 08:49 AM)CityFarmer Wrote: I am mulling to split epi center related posts, and merge them into the company thread, for ease of reference later.

Any objection from the ground?

Regards
Moderator

I have moved and merged some posts to Epi Center thread. Please continue the company related post over there.

Non-EpiCentere related, crowd-funding related post will continue to be in this thread.

Thank you

Regards
Moderator

MAS has finalized its regulation on crowdfunding? How about others sites, pending for regulation? The requirement is similar as in M'sia, only AIs are allowed to participate, not any retail investors.

Equity and debt crowdfunding platform Fundedhere launched

SINGAPORE (March 21): FundedHere has launched Singapore’s first licensed equity and debt crowdfunding platform, bridging start-ups in South East Asia and China with investments or venture debt from as low as $5,000 each.

This comes after Fundedhere received its Capital Markets Services Licence from Singapore’s Monetary Authority of Singapore on March 18.

Start-ups can raise angel or seed funding – through equity issue and/or debt – by registering their business ideas through the platform. As the startups mature they can seek more traditional venture capital or private equity.

FundedHere says it has reviewed more than 100 start-ups, mostly from Singapore, and has short-listed approximately ten which have potential to be crowdfunded.

Only accredited investors (AIs) -- defined as those with at least $2 million in net personal assets, excluding the primary residence, or earn an annual income of at least $300,000 --are allowed to invest via the platform.

FundedHere aims to register at least 1,000 AIs by year-end. Over the longer term, it hopes to register up top 10 per cent of AIs in Singapore.
http://www.theedgemarkets.com/sg/article...e-launched

Think it is an interesting movement and keeping an eye on it.

As of now - think this is one of those things that are "Too little to matter, too much to risk".

The capital I am willing to deploy in each of these funding (when there's no balance sheet, cashflow statement, dicey business model etc) is probably just a few grand each. It's quite illustrative that 330 investors funded a mio SGD funding so roughly 3k per investor only. A few grand * 10+% interests* higher probability of default means it's probably not going to make a big splash on my total returns. And I'm not willing to put in substantial capital into a blind bet.

AFAIK, in the US, defaults have rose to a level that the new movement is to get the relatives and/or the borrowers to put in capital so that the borrowers have skin in the game as well.

(21-03-2016, 05:38 PM)AQ. Wrote: Think it is an interesting movement and keeping an eye on it.

As of now - think this is one of those things that are "Too little to matter, too much to risk".

The capital I am willing to deploy in each of these funding (when there's no balance sheet, cashflow statement, dicey business model etc) is probably just a few grand each. It's quite illustrative that 330 investors funded a mio SGD funding so roughly 3k per investor only. A few grand * 10+% interests* higher probability of default means it's probably not going to make a big splash on my total returns. And I'm not willing to put in substantial capital into a blind bet.

AFAIK, in the US, defaults have rose to a level that the new movement is to get the relatives and/or the borrowers to put in capital so that the borrowers have skin in the game as well.

There are two different types of crowd-funding, under MAS regulation, one is debt-based, another is equity-based. I reckon, the more interesting part is the equity one, IMO.

AIs: $2 million investible asset to join the club. Not sure how many people are willing to disclose their net personal asset in exchange of a status that says "I have money/high income. I know the risk. I am ready/ok to lose".

For AIs who wanted to be an angel investor, FundedHere is simply another platform for equity and debt for start-ups. An interesting platform though if the minimum investment is as low as $5,000 compared to those $20k, $100k a pop kind of start up funding platform.

I believe it would help the start up environment in Singapore. Currently Government/Gov-linked is leading the startup funding. Some critics believe 10k, 50k of seed funding can be obtained too easily from school/government. 55k is a lot of money to waste on people who simply "do not want to work for other"; but too little for a team of 4-5 graduates who would spend the money carefully on their brain child - to the extend that they would have no money to see a doctor when sick. To get money from real venture capitalist these entrepreneurs have to get more business like: selling sensible execution plans instead of selling visions.

With the AI only exclusivity, Fundedhere is licensed and as "regulated" as other "AI-only" investments (read: high risk).
Unless FundedHere allows AI eligible individuals to "opt-out" as AI, and still invest in it - there's nothing new being offered to the investors.

http://www.mas.gov.sg/News-and-Publicati...stors.aspx