Imagine you have a great idea to start a business. If you pull it off, this idea can revolutionize the world. But there is one challenge. You don’t have enough money to fund your business. What is the result? That great idea has vanished even before you make a business plan. Lack of funding is a major challenge for aspiring Sri Lankan entrepreneurs, but that’s about to change!
CROWDISLAND is here to change the way Sri Lankan startups are funded. They are the first Sri Lankan equity based crowdfunding platform.
We have covered everything you need to know about CROWDISLAND so you can just start working on that idea. Who knows? Your idea may revolutionize the world. After all, those who are crazy enough to think they can change the world are the ones who actually do it.
What is CROWDISLAND.lk?
In essence, CROWDISLAND is an equity crowd-funding platform. We help early stage startups raise seed funding from those people who believe in their business. We wanted to create a platform that channels quality capital to innovative startups and make fundraising less painful. CROWDISLAND was officially launched in February, 2016 with most of the regulatory work being addressed in the first few months.
What is “crowd funding” and how does CROWDISLAND.lk fit in to the concept?
Crowd funding is an alternative financing method and its modern form is as old as the Internet. It involves raising small amounts of money from a large population. Broadly, there are four main models, which are used worldwide. CROWDISLAND is an equity crowdfunding platform, which means that those who provide the money are actually buying a stake in your startup.
What are the minimum qualifications for an entrepreneur to get funded through CROWDISLAND.lk?
At a minimum, we require the team to have a working prototype or some level of traction. We don’t look at paper qualifications but we do, however, evaluate the team’s composition as we need to understand what value each team member brings to the table.
How can I get funded through CROWDISLAND.lk if I am an entrepreneur?
Founders can share a brief about their idea, current stage & team information by visiting www.CROWDISLAND.lk . If we feel there is potential, we will schedule a strategy session where we will meet the founders and discuss the idea in detail. If both parties are confident, we help the team become investor-ready by working with them. Once everything is finalized, we engage with potential investors to raise the funds required.
What is the process if I want to become a startup investor through CROWDISLAND?
Investing in early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. CROWDISLAND is targeted exclusively at sophisticated investors who understand these risks and make their own investment decisions. Those who understand this can request an invite via https://CROWDISLAND.lk/investors/.
Who is in your team?
CROWDISLAND is the brainchild of Jeevan Gnanam, Nathan Sivagananathan & York Street Partners, Chalinda Abeykoon joined as CEO in July 2016. Leveraging on our experiences as founders, investors and community builders, we plan to create an efficient mechanism to identify and curate startups in Sri Lanka.
Apart from funding, what benefits will entrepreneurs get by becoming involved in CROWDISLAND?
Our benefits revolve around getting founders, ‘investor-ready’. This covers the three main areas of pre-raise, raise and post-raise. Within each category, the support required will differ based on the maturity of the founders, their experience, their domain expertise etc. Our aim is to equip founders with smart capital so that they can accelerate their growth.
How does CROWDISLAND make money?
For the pre-raise work we do, we charge a flat fee. Broadly speaking, this includes strategy, financial modelling, valuations & pitch deck. It’s important to state that we’re not in the business of providing these as a service, hence, we will only undertake startups that want to raise funds. Furthermore, depending on the effort required, we charge between 6% to 8% on the total raise. Hence, we only make money if the startup is successful in raising their seed round.
What were the difficulties you faced when starting up? How did you overcome them?
It’s been difficult for us to optimize our process because of the existing financial regulations & laws. However, stakeholders are keen on relaxing some of the regulations to create a more enabling environment. Until such time, whilst protecting entrepreneurs and investors, we work closely with selected angel investors and HNI’s. Another challenge was getting founders to become investor-ready. There are no short cuts to this and we take a very hands-on approach to ensure teams are ready. Thirdly, we wanted to position CROWDISLAND as a platform to which founders turned to raise smart capital which is not restricted by timelines or deadlines. We expect these challengers to improve with time and by also collaborating with institutions which are committed to fueling the local startup ecosystem.
What are your future plans?
Our focus for the next six months is to help at least five startups raise funds. We currently have three startups in the pipeline and are open for more potential startups. From April, 2017 onward, we hope to be in a position where we can at least support two startups per month. Establishing a co-working space and a fund of our own is also in the pipeline.
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