Backed by an experienced consortium of founders, the recently launched online platform www.crowdisland.lk aims to bring together talented entrepreneurs and quality investors to make crowdfunding a reality for Sri Lankan start-ups and small and medium enterprises (SMEs).
A key founder of Crowdisland is SA Group Director Jeevan Gnanam, who kick started Orion City and SAKS, with hands-on experience in investing and mentoring over 15 start-ups.
He is joined by York Street Partners, a boutique investment bank based in Sri Lanka that focuses on mergers and acquisitions and capital raising and strategic advisory services.
Speaking on the venture, Gnanam commented, “Crowdfunding is widely known as the practice of funding projects or ventures by raising small monetary contributions from a large number of people.”
“Crowdisland aims to work with a community of investors, who are willing to fund and support this new dawn of creativity and innovation in Sri Lanka and bring them together with promising entrepreneurs with innovative ideas and concepts,”
York Street Partners Managing Director Sujendra Mather said they aimed to start from a slightly limited platform of equity crowdfunding from mainly high-net-worth investors and work towards larger-scale project crowdfunding that can reach rural entrepreneurs, once the government implements a more supportive regulatory framework.
However, he said they were currently hampered by old regulations that are prohibitive to crowdfunding.
“For example, according to the Company’s Act, a private company can only have 50 shareholders, which ideally should be increased. Payment gateways have been hesitant to support us due to their unfamiliarity with the concept,” Mather said.
“We would like to see the Securities and Exchange Commission getting involved and supporting the concept. It is pertinent to note that Crowdisland is not a deposit-taking institution, a trading house or an investment advisor,” he added.
The founders of Crowdisland believe the time is right to initiate the crowdfunding concept, as indicated by the increasing number of start-ups, venture competitions and
Sri Lanka Association for Software and Services Companies’ (SLASSCOM) target of reaching 1,000 start-ups by 2020.
Banks are traditionally not start-up and SME friendly, making it tough for promising business ideas to raise vital seed capital.
Crowdisland aims to solve the problem of young businesses struggling to raise early-stage capital for growth and evolve into successful mid-sized businesses in the future.