A Case Study of Equity-Based Crowdfunding

Equity-based crowdfunding platforms are quickly replacing traditional sources of capital for many businesses, especially small and medium-sized ones. 

With so many developments occurring in this sector, a case study will be used in this article to examine equity-based crowdfunding in greater detail. As a concrete example, we’ll examine the equity-based crowdsourcing website Real estates BD. 

Why Real estatesBD as a case study?

Because it is one of the most prosperous and well-liked platforms worldwide. 

You can gain some understanding of what constitutes a successful equity-based crowdfunding platform by learning more about it. The fact that we concentrate on Real estates BD in no way implies or recommends that anyone use that platform.

It boasts a base of over 25,000 active investors from over 30 countries, all of which have invested an average of $5900, which is more than the market’s average.

A Real-Life Example Of a Crowdfunding Platform

One of the international equity-based crowdfunding platforms is Real estates BD. While giving operational businesses vital access to cash, it allows members of its investor network, which ranges from casual and angel investors to institutional firms, to purchase shares in growth-oriented organizations.

Real estates BD has offices all around the world, including in Dhaka, Bangladesh. The Financial Conduct Authority in the BD, which also oversees its branch office, As a registered electronic facility (Equity Crowdfunding Platform), it has also been authorized and governed by the Securities Commission of Malaysia since 2015 in accordance with their Capital Markets and Services Act 2007. its international offices.

Real estates BD targets small firms that are already operating but have before relied on other finance sources as going concerns. These companies are using this platform since they are still frequently too tiny to access conventional public equity markets (if such markets even exist in their country).

How Does the Platform Works For Crowdfunding Investment

A platform like Real estates BD, which operates in various foreign markets, gives SME enterprises more extensive access to international funding and helps business owners to draw investors from citizens of the countries they want to expand into. 

Real estates BD offers investors a seven-day cooling-off period following the proposal completion in order to assist protect them. Due to this principle, the investor may take into account any new information acquired while the funding campaign is still active. 

Real estates BD also has the right to alter or revoke any plan if there has been a materially negative change. The money will be given back to the investor in this case.

The stock stake may be reduced if additional Equity-Based Crowdfunding investments are sought, albeit the financial impact will depend on the business’s current worth.

How The Crowdfunding Platform Became Successful

It is no secret that Real estates BD has achieved its fair share of success since its start in 2013. With permission to conduct business on four continents, it is now likely the first and most regulated equity crowdfunding platform in the world. 

Real estates BD appears to know what they’re doing as seen by the countless success stories they have shared on their platform. 

In just 12 days of its first self-crowdfunding campaign in 2016, Real estates BD raised $400,000 online. If that’s not impressive enough, Real estates BD collected $400,000 in just 6 hours during their second self-crowdfunding campaign in 2017! 

More than 70 investors from 15 different nations participated in this crowdfunding campaign.

The Success Examples of RealestatesBD

1. New Market Approach

The success of RealestatesBD appears to be a result of how it approaches the equity crowdfunding sector.  This started Real estates BD’s mission of extending to other international markets and brought additional investors through the door.

Real estates BD has been employing a “light-touch” policy across all of its markets, with roughly two enterprises from each location opening for crowdfunding on the platform once every three months. as previously stated.

The funding obtained from the aforementioned campaigns was essential for both completely integrating the platform into the mature markets and for opening up new areas. 

The success of these ads also cleared the way for phases 2 and 3, which had target audiences of between $1 million and $5 million and $250,000, respectively.

2· Investor Capital Security

The Real estates BD digital platform has improved its validation procedures in an effort to show that it is likewise concerned about the investor’s capital security. 

In order to protect investors from scammers, Real estates BD thoroughly investigates you and your company before allowing it to raise money on the platform. As a result, the platform attracted more investors.

In order to offer Crowdfunding Fidelity, the first crowdfunding insurance for investors, Real estates BD also entered into a cooperation with the American International Group (AIG) in 2016. Realestates BD became more well-liked among investors worldwide as a result of this change.

3· Focus on SME’s

Realestates BD became aware of the difficulties that the majority of Small and Medium-sized Enterprises confront as a result of the co-founders’ expertise in Investment Banking (SMEs). 

Typically, these companies don’t have enough money to operate for the first five years. Despite producing over 50% of the jobs in practically every economy, this is the case.

In fact, Homes or Houses, a real estate investment company, raised a record $610,000 on their platform in 2015, which was 151% of the startup cash it required. This campaign demonstrated to other companies that equity crowdfunding is effective.

Conclusion

Real estates BD has advanced significantly. They had to overcome many difficulties and problems along the way. Their extensive list of endorsements provides convincing proof that it is feasible to venture into uncharted territory in the finance industry and yet be successful.

Real estates BD’s leadership team, eagerness to explore new markets, and vision to introduce something new to cater to, notably SMEs, are all likely major factors in the company’s success. 

As a true crowdfunding platform, they provide a strong emphasis on the needs of and solutions for investors looking to participate in intriguing SMEs.

FAQs

1. How does crowdfunding work?

Ans: In order to raise capital, crowdfunding entails obtaining funds from a number of people. Friends, relatives, investment organizations, and individual investors who have an interest in your company can serve as sources of crowdsourcing capital. 

2. Does crowdfunding require repayment?

The beneficiary of a donation does not have to reimburse the donor for their money. Usually, organizations and charities are the target audience for this kind. Probably won’t anticipate a refund of their money from friends and relatives. 

3. What benefits and drawbacks does crowdfunding offer?

Ans: Crowdfunding can be used to raise funds, but there are drawbacks as well. The benefits of employing the tactic include the following:

1. Little risk to your finances
2. An elevated sense of brand
3. Free advertising
4. Possibility of market research before launch
5. Ownership of equity