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How does crowdfunding work?

Equity crowdfunding is the sale of shares in a company to investors in return of payment, it is similar to the process of buying stock from a company listed on a stock exchange, however, the difference is the companies listed are not publicly held companies, but rather private corporations that need funds for expansion and growth. It is a method of raising money to assist the business achieve its targets.

Crowdfunding is traditionally used by startups, as a method of obtaining funds for growth or create new projects. This also helps businesses cultivate a support community around them and advertise the business at the same time, gaining access to new potential customer and wider market reach.

For investors, crowdfunding is a good opportunity to grow their funds, especially where startups would be still at early stages and at their lowest valuation, where investors can later re-sell their shares for a higher price. Within Beban’s business model, investors will not carry the burden of shareholder responsibilities as it will all be undertaken by Beban as nominee account holder. Investors can enjoy the dividends from the comfort of their home thanks to the digital onboarding process adopted at Beban.

Beban operates an all-or-nothing module, meaning that if a campaign fails to receive subscriptions of 80% and more towards its campaign, then the campaign fails, and all pledged funds are returned to investors. This provides investors with more security going into the investment.