South Africa’s first ever crowd-sourced investment platform has been launched, planning to stimulate entrepreneurial development and allow even those with limited funds to become investors.
Web-based platform Crowdinvest is looking to break down investment barriers for a broad segment of the population.
The platform offers users the chance to directly invest amounts of their choosing into a variety of asset classes and gives business owners access to capital and intellectual resources.
“Many South Africans simply don’t consider investment to be an option, as the vast majority of investment classes require at least R500,000 (US$57,000) worth of capital,” explains Anton Breytenbach, who conceived the project in 2010. “Investor’s co-operations can prove to be an effective solution, but the reality is that few of us have sufficient connections to make these happen.
“Crowdinvest was devised as a tool to make an investor out of anyone, capitalising on the power of online networks to allow like-minded individuals to effectively collaborate on investment opportunities.”
Breytenbach came up with the idea for Crowdinvest after becoming concerned that many of his contemporaries would not be able to generate the capital required to create an investment portfolio. Crowdinvest is designed to create a model allowing investors to reap returns in spite of financial limitations.
Investors can invest nominal amounts together in a wide range of investment classes, such as businesses, property and fixed assets, and go on to claim their portion of the returns. As little as R1 is required in order to get started, meaning sceptical users can explore investments with minimal risk attached.
The platform also provides seasoned investors with an opportunity to diversify their portfolios and further spread their risk, with the large investment communities established around various businesses and ventures lessening the likelihood of significant losses. The platform can also be used for networking.
It should also prove beneficial to entrepreneurs seeking funding.
“South African entrepreneurs are very limited when it comes to financing options, and as a result, many great start-ups never make it to fruition,” says Breytenbach. “Crowdinvest makes capital far more readily available to a wide range of potential entrepreneurs, and this solution will hopefully empower them to take that next step and convert their concepts into successful enterprises.”
Crowdinvest will also offer budding entrepreneurs access to comprehensive mentorship and incubation programmes, which have been developed in order to equip them with the necessary tools and know-how to effectively translate their ideas into feasible business models.
“What we’re aiming to create with Crowdinvest is a community of truly invested investors, who can work together to help ensure a business or venture’s success,” Breytenbach says. “Many companies suffer from significant skills shortages, and can help to address these by involving some of their investors in exchange for discounts and rewards. Essentially, the Crowdinvest platform provides unprecedented access to a wide range of intellectual capital, which could prove instrumental in driving the creation of a thriving enterprise.”
“80% of the country’s capital lies in the hands of just 2% of the population, and our primary aim in building this system was to address this critical imbalance.”