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How to raise capital
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Answering your questions
What is equity crowdfunding?
Equity Crowdfunding is a new way to invest in SMEs. Multiple investors contribute to innovative business pitches in exchange for equity shares in the company. Raising capital alongside multiple sources reduces the investment risk. Businesses gain validation and build brand awareness through the capital raising process.
How does investing work?
Whether you are a novice or professional Investor, you can sign up on our website and choose the business you want to invest it. You upload your FICA documentation and select the amount you wish to invest, and transfer the funds. The funds are held in a trust account until the campaign is closed. If at campaign close, the funding round is successful then the business receives the funds, you will be issued shares and you will be a shareholder of a South African business. If the campaign is not successful, then your funds will be returned to you less the bank charges or transaction fees (EFT fee, R10.00, instant EFT 1.5%, credit/debit card 2.5%, Paypal 5.5%)
How does raising capital work?
Create a user profile on www.uprise.africa. Start a pitch and complete the application form. Once approved, build your pitch and set a funding goal between R500 000 and R50 000 000. Start Raising the funding you need.
How much does it cost?
Uprise.Africa charges a initial fee of R23 000 (VAT inclusive) to entrepreneurs. The fee is fully refundable for campaigns that successfully reach their funding target in the Uprise.Africa platform.
50% of the fee is refunded if Uprise.Africa decide not to take the deal live on the platform.
This fee covers the following:
- Legal Due Diligence – R5 000
- Financial Due Diligence – R5 000
- Prospectus – R8 000
- Admin – R2 000
Cost of Capital Raise:
8% excluding VAT is deducted on successful capital raises. This is split accordingly: 1% (one percent)(this amount will not accrue VAT as it is part of the subscription raise) of the proceeds raised from this public offering will be retained by Uprise Fund I to cover the running costs of Uprise Fund, 2% Uprise Management company fee – to ensure legal compliance and judiciary oversight post raise for the first year (after year one the company will need to take on their own post-campaign reporting cost), 5% Uprise.Africa platform- capital raise fee.
Campaign Preparation costs:
As part of live public campaign preparation, Uprise Africa recommends that Entrepreneurs factor in approximately R30 000 – R80 000 for legal costs, video production, professional financial advice, social media ads etc.
Transaction fees are charged on investments. EFT fee, R10.00, instant EFT 1.5%, credit/debit card 2.5%, Paypal 5.5%.
How long is the pitch process?
The entrepreneur sets the campaign duration, this can be between 30 and 90 days.
For the full campaign, estimated timing would be approximately 6 months.
Campaign preparation 1-2 months, Campaign run 1-3 months and Shares Issues & Payout 2 – 4 weeks.
When is a shareholder’s certificate issued?
Equity shares are issued once the funding round is closed.
Can I invest if I am not a South African citizen?
No, only South African citizens may invest on our platform.
Can I sell my shares once I’ve invested?
Shares are kept in a digital register with Profsoft, our asset registry partners.
Shares on Uprise.Africa cannot readily be sold and are not likely to be listed on a secondary trading market. In other words, you will be able to offer your shares for sale to other shareholders only if the company you invest in floats on a securities exchange or is bought by another company. It also depends what is included in the shareholders agreement which changes with each deal.
Uprise.Africa is in negotiation with a secondary market exchange platform that we are taking through a due diligence process to be our share trading mechanism platform. We expect this to go live within 6 months of launch.
Approximately how much time will I have to commit to before and during the campaign?
You will need to prepare for at least 2 months before the start of the campaign. During the campaign you will need to be available everyday to answer questions from investors and you will need to be available for select media appearances.
What is FICA?
Financial Intelligence Centre Act 38 of 2001
South Africa introduced FICA in 2001 to help fight financial crimes such as money laundering, the financing of terrorist activities, and to protect banking customers from such crimes. According to FICA, banks must ensure that the customer information that the bank keeps is correct and up to date as it is important for banks to know their customers.
What documents are acceptable as proof of residence?
Any one of the following valid documents reflecting your name and physical residential address (except where a credit provider is a subsidiary of Absa, e.g. Woolworths):
– Utility bill, e.g. municipal water and lights account or property managing agent statement
– Bank statement from another bank on an official bank document or form
– Municipal councillor’s letter
– Tax certificate
– Recent active lease or rental agreement
– Municipal rates and taxes invoice not older than 3 months
– Account statement from a NCR (National Credit Regulator) registered service provider (NCR number must be visible/recorded on the document)
– Security service providers registered with PSIRA (Private Security Industry Regulatory Authority), e.g.Chubb, ADT (PSIRA number must be visible/ recorded on the document)
– Telephone or cellular telephone statement
– Official SARS document (not eFiling documentation)
– Valid television license renewal letter
– Television license renewal/confirmation letter
– Subscription TV, e.g. MultiChoice statement
– Home loan statement from another financial institution
– Long/short term insurance policy documents from another Financial Services Provider (FSB number must be visible/recorded on the document)
– Motor vehicle registration/license documents
– Body corporate/governing body letter or statement
– Official employer letter for employees residing on company/ institution premises
– Official university/technikon/college or tertiary institution registration letter
– Affidavit to confirm address (only applicable to individuals)
– Posted traffic fine from a Metro police department (E-toll statements are not accepted)
– Medical aid statement or policy document (policy number must be visible on the document)
Does the Uprise.Africa community have first option to buy shares off a fellow investor?
You can make this a pre-requisite in the shareholder agreement and only offer the shares when they become available to your community.
What are the expectations from a dividend’s point of view and how is that payout managed?
There is no defined dividends expectation. Each deal is specific and you can include a commitment in your capital raise or not. Regarding payout, Uprise.Africa will manage the process for you through ProfSoft.
Is Uprise.Africa regulated?
Uprise.Africa is regulated and is compliant with all relevant legislation in South Africa.
How much can I invest?
It depends on the business you want to invest in. They may offer shares for as little as R1000 or as much as R10 000.
Why do I need to register on the platform?
Uprise.Africa is built on long term investment relationships and requires a certain degree of liability from its users. We ask for basic information to ensure we have your details should we need to contact you and to hold you accountable for your activity on the platform.
What is the criteria for applying to run an Equity Crowdfunding campaign?
- Any industry
- Raising R500 000 –R50 million. 3mil + is preferred
- Already generating revenue
- Have at least one anchor Investor
- Good returns (10% – 40%+)
- Strong Team
- Ideally at least 2 years operational
- No litigations
Is it possible to use Uprise.Africa for BEE restructuring?
Yes, however you must be willing to give at least 30% for BEE ownership.
What are the benefits of equity crowdfunding for me as an entrepreneur?
You gain access to a community of professional and novice investors who are active and ready to invest should your business idea excite them. This is also an opportunity to market test your product/service and develop a new customer base as your investors become your loyal customers. Your crowdfunding campaign will also increase your online visibility (it literally is a marketing campaign), which will be great for business, potential partners, sponsors, etc. An Equity Crowdfunding campaign, when done right, can give your business a significant boost.
What are the benefits of equity crowdfunding for me as an investor?
Equity crowdfunding collects and pools together a variety of businesses on one platform. These businesses have been vetted to include high quality deal flows with all necessary legal checks and compliance in place. Think of it as your ‘online shop’ for business investment.
How can I protect the confidentiality of my business idea or product?
If you are concerned about the confidentiality of your business/product, you should protect your intellectual property according to South African trademark and patent laws prior to starting your equity crowdfunding campaign. Crowdfunding is a very public way of seeking investment as you’re appealing to the general public to be your potential investors. Uprise.Africa, potential investors, venture capital firms and angel investors will not sign NDAs because they see several similar business plans every year. As a platform, we will treat your information confidentially and will publish content with your permission. However, we do need enough relevant and essential information to display to enable potential investors to make informed investment decisions.
Who can I contact if I still have questions?
Please email firstname.lastname@example.org or call/whatsapp 078 228 4910
What is the Board Member selection process?
During the payment process you will be asked if you would like to be considered as the board representative of the crowd. Ultimately, whether you are appointed as such is in the discretion of Uprise.Africa as Uprise.Africa holds the rights to appoint a board member. Should the funding round be successful, you will be informed of the full extent of the expected responsibilities of you and then you will have the further option of recusing yourself from the voting process. The selective individual may have the right to attend meetings of the investee company as an observer right at board meetings. All shareholders the rights given to them in terms of the Companies Act and Uprise.Afric’s Memorandum of Incorporation. Uprise.Africa will always attempt to maintain a good level of communication and flow of information with you.
The selection process works as follows;
– Each crowd member that selects to invest into a campaign will have the opportunity to nominate themselves
– At the end of the raise, approximately 2 weeks after the raise closes an email will be sent to all the crowd member to vote for their board member representative.
– Ultimately the discretion to appoint you and remove you rests with Uprise.Africa.
What is overfunding?
Investing in early stage businesses and startups can be very rewarding but comes with its risks and challenges. These risks include dilution, illiquidity, loss of investment and rarity of dividends which is why investment should only occur as part of a diversified portfolio. Uprise.Africa is targeted specifically at sophisticated Investors who are sufficiently aware of these
risks and make informed decisions. As an Investor, you will only be able to invest via Uprise.Africa once you have passed our application process and registered on our platform.
Pitches by Entrepreneurs for investment are not offers to the general public as only registered members of Uprise.Africa can invest into Uprise.Africa and mandate Uprise.Africa to invest that money into the particular Entrepreneur, based on information provided in the pitches by the Entrepreneurs concerned. Uprise.Africa takes no responsibility for this information or any recommendations or opinions expressed by the Entrepreneurs or Investors.