Resuscitated Startups With Crowdfunding

Startups and small and medium enterprises (SMEs) with transparent payment records, good business plan and vibrant vision are definitely qualified to raise funds with crowdfunding, according to SEC.

The Securities and Exchange Commission, Thailand (SEC) holds an online seminar on Power of the Crowd: Coping the Covid-19 crisis with crowdfunding to educate startups and SMEs about funding sources so that they can keep on running their businesses through the Covid-19 outbreak. Financial experts agreed that crowdfunding is a promising channel for raising funds for startups and SMEs amidst the crisis.

Dr. Nares Damrongchai, Director of Thailand Center of Excellence for Life Sciences Public Organization (TCELS) said SEC or the concerned organizations should take part creating confidence in a digital financial system, providing fast and convenient fundraising services. Startups and SMEs must have reliable projects or businesses which are socially and economically valuable.

He pointed out a fundraising project by TCELS of scarce medical resources during the Covid-19 crisis which certified the standard by the medical organization, leading to a social campaign interested by investors and general public.

Vorapon Pornvanit, Founder and CEO of crowdfunding platform PeerPower Co. Ltd. commented that crowdfunding is a bright fundraising channel for startups with its more interesting feature comparing to ordinary financial institutes. The best part of equity crowdfunding is that startups or SMEs are not required to put up their personal assets as collateral.

However, equity crowdfunding investing comes with both risks and opportunities. Startups, SMEs and investors must learn and understand. The financial system is now moving toward digital economy, database system, financial institutes, credit bureau and FinTech must be ready, likewise, the SEC and Bank of Thailand must build the ecosystem involved with legal and stable fundraising structure. 

Three qualifications of startups and SMEs are: 1. Transparent payment records for shareholders, customers and suppliers, 2. Dynamic business plan, for example restaurants that converted from dine-in to delivery application, and 3. Vibrant vision. There are over 6 trillion baht in the capital market which is a great choice for investors and if startups and SMEs come with all the three criteria, they will be definitely attractive to investors.

Ada Chirapaisarnkul, Founder of fundraising website taejai.com noted that crowdfunding is not a new normal, however digital technology and innovation adoption for crowdfunding tend to be increasing due to the Covid-19 crisis. Cashless society that Thailand is moving toward, becomes a factor of crowdfunding growth. 

Startups and SMEs must be transparent and be responsible for the donation money or fundraising, especially those social organizations should have the network to screen the projects enabling the startups and SMEs access to funding sources. Those crowdfunding related agencies should also create public awareness.