Accelerated Equity Crowdfunding Platform Officially Launched

The fintech industry in Indonesia has Acceleran as a new player who specifically dedicates himself to working on the sector equity crowdfunding to help early-stage digital startup activists and SMEs that are still active in the sector offline.

Acceleration assisting entrepreneurs who wish to raise funds by selling shares to interested investors. The condition is that they must have a clear and financially feasible business plan. Both of these are Akseleran's benchmarks for ensuring businesses that are ready to be published are not classified as frauds, as well as protecting investors.

The amount of fundraising that can be done through Acceleration ranges from IDR 100 million to IDR 25 billion. Commitment to become an investor in a business is not limited, it can take years depending on each decision.

Akseleran was founded in May 2016 by three people. They are Ivan Tambunan, Mikhail Tambunan, and Christopher Gultom. All three are related and come from a background of work as lawyers, financial consultants and accountants.

Last month, Akseleran received initial funding from angel investors with an unspecified value.

In a separate interview session with DailySocial, Co-Founder and CEO of Akseleran Ivan Tambunan explained that since last December his party claimed to have opened opportunities for entrepreneurs to start preparing campaign materials, even though the fundraising process had not yet been opened. The number of incoming applications reached more than 50, but only three attempts passed.

The three businesses have now started the fundraising process since yesterday (21/3) and have been posted on the Acceleran website. Each of these businesses has different funding requirements, and the amount of shares released also varies. They do not let go of the majority of shares so that they still have full control over their own business.

Before the campaign is posted on the site, they must prepare material for the pre-campaign. The time needed is estimated to be around two to four weeks or depending on the speed at which the entrepreneur prepares the materials.

For example, Elleanor Batik is now submitting a campaign to increase business capital. They are manufacturers and sellers of batik clothes who sell their products online and offline. The funds they are looking for are IDR 600 million and they dare to release 40% of their shares to investors.

The time period given by Akseleran for the fundraising process is 60 days. If within this time period the funding needs have been met, Elleanor Batik will proceed to the next process, namely the final verification of the relevant entrepreneurs and their businesses.

Akseleran will request and assist entrepreneurs in preparing legal documents such as share acquisition agreements, shareholder agreements, and amendments to the company's articles of association. This process takes around 30 days depending on the complexity of the verification process.

If the fundraising process is not successful in collecting the amount desired by the entrepreneur, the funds invested by investors will be returned to their respective accounts.

After the entrepreneur has passed the final verification process, the Accelerator or affiliate will sign legal documents with the relevant company to take shares and receive a share certificate, and send investment funds to the company as capital depositor. The accelerator or affiliate will issue a capital participation benefit certificate to the entrepreneur in relation to the investment received.

No regulation yet

Concept equity crowdfunding is a completely new thing in Indonesia, so there are no regulations governing the rules for playing Acceleration. However, before launching this service, Accelerator had met representatives from the Financial Services Authority (OJK) to present their business.

Ivan revealed that OJK is quite open to new innovations offered by Acceleran because it supports the availability of capital liquidity in helping SME businesses in Indonesia. It's just that, the regulator reminded Akseleran to remain careful and still pay attention to aspects of consumer protection.

Akseleran's business model actually refers to similar companies that have been operating in the UK for a long time, including Crowdcube and Seedrs.

"We refer to the Crowdcube and Seedrs business model for Acceleration, with modifications adapted to Indonesian conditions. In Southeast Asia itself, players equity crowdfunding still very little. Meanwhile in England, the fintech industry has mature, lots of players equity crowdfunding there," said Ivan.

Protection for investors

Given that there is no regulation that becomes the umbrella of business law equity crowdfunding, then Acceleration continues to carry out the same business process careful from the start so that the business remains gradual over a long period of time.

Accelerator implements multiple layers of security for investors and entrepreneurs. To become an investor, they must be Indonesian citizens, have an ID card, and answer around 8-9 short questions to ensure investors understand the risks involved in investing in stocks.

After that there will be a verification process. If passed they will become registered users and get full access rights to the Acceleration site in full, including viewing details of ongoing fundraising campaigns. If you don't register, investors can only see a bit of information and don't invest.

Through the available information, investors can see each campaign along with detailed information about the business, product descriptions, market information, business management, financial conditions and business achievements. Investors can also ask entrepreneurs for business plans, or interact with them directly.

The minimum investment amount to become an investor is IDR 100 thousand. The funds are put into a joint account.

Every investor who is part of Akseleran will not directly hold the shares of the business being invested. Accelerator or an affiliate of Accelerator will act as custodian. The Custodian will provide all the income received from the related shares to the investors and take action regarding the shares according to the instructions received by the investors.

Custodians, continued Ivan, function to simplify administrative processes that must be passed by investors and businesses that are raising capital through Acceleration. Every investor does not need to sign and attend documents or meetings that must be attended by shareholders.

Likewise for the public offering process that usually occurs in a company, generally when referring to capital market regulations, publication must be carried out through the media. So that it is not classified as a public offering, the offer is only limited through the Acceleration platform and is intended for registered investors.

"We implement multiple layers of security for investors, there is an educational process, detailed fundraising efforts, limited legal and financial due diligence, proper legal documentation and segregated accounts. We protect them because we know what stock investing is. risks."

To ensure that the business run by an entrepreneur is real and valid, after the fundraising is complete, the entrepreneur is required to make regular reports non-audited on a monthly and yearly basis.

Monetization and Target Acceleration

Ivan explained that in the monetization process, the company will only ask for a commission of 3% of the total fundraising that has been successfully fulfilled. Others, there is an administrative fee of Rp. 5 million to pay for the costs of preparing legal documents, notary fees and other administration. These fees only need to be paid when the campaign is successfully completed.

Acceleration will also help any business that is not yet in the form of a limited liability company. Entrepreneurs must set aside funds to carry out arrangements for the formation of a limited liability company, the cost is around IDR 5 million. These costs will be taken from the campaign funds collected.

"This fee is very minimal if the entrepreneur has to hire a consultant or notary public, it could cost tens of millions."

Ivan hopes that the presence of Akseleran can help resolve this gap funding for SMEs which is estimated to reach US$ 50 million in 2020. Draft equity crowdfunding is expected to be an alternative solution for SMEs, apart from the funding solutions offered by angel investors, venture capital, and P2P lending, each of which has advantages and disadvantages.

"For SMEs and startups, equity crowdfunding have an advantage. They are not charged with interest and debt. The process is also safe and efficient, all using online channels. Entrepreneurs only need to make sure the campaign is appropriate and visible from the scale of the business. We are even ready to help them make a business plan and financial planning."

This year, Ivan targets that Akseleran can succeed in 60 campaigns with a value of around Rp 1 billion each per campaign.