SEBI Promotes Crowdfunding

Crowdfunding

Crowdfunding, started first in 1997 in USA has gained immense popularity amongst the entrepreneurs and the investors. Many of us knowingly or unknowingly are involved in this recent emerging formula of raising capital to invest. Crowdfunding is raising of funds from a large number of investors to invest in a business startup. It is basically helpful for initiating small businesses as it provides large amount of finance which banks and finance institutions sometimes hesitate to provide. The investors in lieu of their investment get periodic returns as interests or shares in the new business. This is called Debt Crowdfunding and Equity Crowdfunding respectively. Sometimes investors may be people who donate money for the welfare of others expecting no returns. This is called Reward Crowdfunding.Crowdfunding may seem helpful for the entrepreneurs and profitable for investors but it has its dark side also. Sometimes there is no guarantee that the business started will flourish and investors get good returns. The equity or shares in Crowdfunding have no other markets to be sold. Many organizations get involved in fraudulent schemes for earning easy and quick money. In India, the authority which regulates Crowdfunding is Securities And Exchange Board of India (SEBI).

Recently, SEBI issued new norms for Crowdfunding to keep a check on its misuse.
It allowed companies to raise funds through web based platforms and social networking sites. These platforms can be provided by SEBI registered entities only. An issuer cannot use more than one platform.

All norms are issued in the interests of small business holders. Big business groups with turnover more than Rs 25 crore or entities associated with them are not allowed. The entities listed on any exchange and are in existence for four years are also not allowed to practice Crowdfunding.

SEBI also announced that only accredited investors which include institutional investors, companies, HNIs and financially-secure retail investors advised by investment advisors or portfolio managers will be allowed to participate in Crowdfunding activities. Besides, the Crowdfunding investment of retail investors would be capped at Rs 60,000 or 10 per cent of their net worth.

SEBI particularly showed its concerns about small businesses and entrepreneurs as after global economic crisis of 2008 have made it difficult for the banks to lend money where risks are involved.
crowdfunding 2.pnAccording to SEBI, only platforms and websites approved by it will be allowed to raise funds through Crowdfunding.

So here at Promaestros.com we provide easy and effective solutions with our promising Crowdfunding websites for the clients to promote their plans and attract potential investors for their start-ups. We, with our skills and experience in developing Crowdfunding website solutions provide the best websites which are designed and customized to provide a provoking experience to the investors and a deeper insight into your businesses.

Our websites are incorporated with features like interactive graphic designs and easy to navigate links. We also provide easy payment gateways and amazing discounts and offers. Our websites are rich in content, which is informative and creates an interest in the minds of viewers. So if you are planning to reach new investors for starting up your businesses, we are the best in market and mostly sought solution providers who keep clients preferences and fulfill their expectations.

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