For Businesses Looking to Raise Funds

Equity crowdfunding is a method of raising capital by selling shares of your company to a large number of investors through an online platform. It can benefit your business by providing access to capital, increasing brand awareness, and engaging with a community of investors.

To raise funds through equity crowdfunding, you can apply to become listed on Alixco by submitting an application via Get Financed after you register and login to your Alixco account. The first steps are simple, just submit your business plan, financials (if available) and a compelling pitch and we will be in touch soon discussing the next steps with you.

Only locally incorporated (in Malaysia) companies and limited liability partnerships (excluding exempt private companies) will be allowed to be hosted as an ECF issuer.

Equity crowdfunding is suitable for a wide range of businesses, including startups, early-stage companies, and growth-stage companies across various industries. Businesses should have a scalable business model, a compelling value proposition, and a clear growth strategy.

Costs associated with equity crowdfunding may include platform fees, legal fees, marketing expenses, and compliance costs. It's essential to consider these costs when planning your fundraising campaign. Alixco typically charges a 6% success-only fee and a 1% sign-up fee. Additional fees such as lawyer or consulting fees may apply but typically do not exceed 2% of the targeted funding amount. Hence, most businesses can expect an overall funding cost of 7%– 9% of the funding amount.

An issuer may only raise collectively, a maximum amount of RM20 million through ECF platforms in its lifetime. This amount is excluding the issuer’s own capital contribution or any funding obtained through a private placement exercise.

The concept of ‘all or nothing’ is applied to the ECF fundraising exercise. In this regard, an issuer must raise the targeted amount from investors, or the campaign is considered unsuccessful. When the ECF campaign is unsuccessful, all monies collected are returned to the investors. A targeted range of fundraising amount (minimum and maximum amount) is set for each ECF campaign.

The issuer is only allowed to keep the funds raised within the targeted range of fundraising amount (minimum and maximum amount). A campaign is considered successful once the targeted amount sought to be raised has been met.

No. An issuer can only raise funds on one ECF platform at any one time. An issuer may be permitted to be hosted on an ECF platform and peer-to-peer (P2P) platform at the same time, subject to disclosure requirements as may be specified by the platform operators.

As part of your fundraising campaign, you'll need to provide investors with detailed information about your business, including your business model, financial projections, use of funds, and potential risks. Transparency and clarity are key to attracting investor interest.

The time it takes to raise funds through equity crowdfunding can vary depending on factors such as the attractiveness of your investment opportunity, investor demand, and market conditions. On average, the actual fundraising period lasts for 90 days while the whole crowdfunding process from application to disbursement in case of success usually takes about 2 – 6 months.

Yes, equity crowdfunding allows businesses at various stages of growth, including pre-revenue and early-stage companies, to raise funds from investors. However, you'll need to clearly communicate your business's growth potential and value proposition to attract investor interest.

Businesses raising funds through equity crowdfunding must comply with regulatory requirements set by the Securities Commission Malysia, including disclosure obligations, investor limits, and reporting obligations. Alixco is checking that your company’s campaign meets regulatory requirements. Furthermore, Alixco has a trusted legal partner firm which can support in the legal document creation for your pitch.

The SC regulates equity crowdfunding (ECF) activities in Malaysia by registering the ECF operators (ECF operators) as recognised market operators pursuant to the Guidelines of Recognized Markets (RMO Guidelines).

The RMO Guidelines, among others, sets out registration requirements and imposes a set of obligations applicable to an ECF operator. Ongoing obligations imposed on an ECF operator include ensuring compliance with disclosure requirements and governance arrangements, carrying out due diligence exercise on prospective issuers planning to use its platform and ensuring investors’ monies are properly safeguarded.

Alixco provides support to businesses throughout the fundraising process, including guidance on campaign preparation, marketing support, investor relations, and compliance assistance to ensure regulatory compliance and investor confidence.

Valuing your company for an equity crowdfunding campaign requires careful consideration of factors such as revenue, growth potential, market comparables, and investor expectations.

There are different valuation methods used for each business stage, industry and company particulars. The most common (simple) valuation methods include 1. Multiples valuation which bases the value of your company on comparable companies and transactions 2. Discounted Cash Flow analysis (DCF) which bases valuation the expected cash flows the business will generate and 3, Startup valuation which sums up value components based on how strong the characteristics of your startup are.

Alixco can support your business with expert guidance on determining a valuation for your business which is both attractive to you as a business owner and to potential investors.

Documentation for an equity crowdfunding campaign usually include a business plan, financial statements, offering documents, investor presentations, and legal agreements. It's essential to provide clear and comprehensive information to potential investors.

The timeline for preparing an equity crowdfunding campaign can vary depending on factors such as the complexity of your business, the completeness of your documentation, and your readiness to engage with investors. On average, it may take several weeks to a few months to prepare for a campaign. Historically, 1 months – 3 months has been an approximate duration.

Investors typically look for key metrics such as revenue growth, customer acquisition, market traction, product development milestones, and profitability projections. Highlighting these metrics can increase investor confidence in your business.

Yes, businesses that have received funding from other sources can still raise funds through equity crowdfunding. However, it's essential to disclose existing funding arrangements and ensure alignment with prospective investors.

Promoting your equity crowdfunding campaign requires a multi-faceted approach, including online marketing, social media outreach, investor networking, and engaging with potential investors through the platform's online portal.

After successfully raising funds through equity crowdfunding, businesses are typically required to provide regular updates to investors on the progress of the business, financial performance, and any significant developments. Compliance with reporting requirements is essential for maintaining investor trust and confidence. An update to investors is expected and required at least on a yearly basis.

Yes, businesses can set funding targets lower than the maximum allowable limit for equity crowdfunding campaigns. However, it's essential to consider the funding needed to achieve your business objectives and adequately communicate your funding goals to potential investors.

Alixco offers support to businesses throughout the fundraising process, including campaign preparation, marketing assistance, investor relations, and compliance guidance. Ongoing support after the fundraising process (after fundraise support may incur additional charges) may include support on investor updates, reporting assistance, and networking opportunities.