Equity crowdfunding (“ECF”) is the process whereby the people (the ‘public’) (“Investor”) invests in an early-stage and unlisted company in exchange for shares in a company hosted on an ECF platform (a “company” or “issuer”). These investors in turn become shareholders in the company, having certain agreed ownership of the company.

As an investor, you stand a chance to profit if the Issuer does well – like entitlement to dividends or potential to exit, either on initial public offering or sale of the business to a third party.

Investing in startups and growth stage companies was previously exclusive to wealthy individuals, venture capitalists, and business angels. ECF stands to democratise the investment process both ways: opening the door for Issuers to alarger pool of potential investors via crowdsourcing, and making the once-exclusive opportunities of startup investments accessible to the public.

Any locally incorporated company from various sectors and stages – whether a start-up, growth stage company, or even social enterprise – all are welcome to host their company on the platform.

However, the SC has set forth several requirements that companies must complywith prior to hosting:

Companies that can raise funds through ECF:

• Locally incorporated companies
  Limited liability partnerships

Companies that are prohibited from raising funds through ECF:

• Commercially or financially complex structures (i.e. investment fund companies or financial institutions.
• Public-listed companies and their subsidiaries
• Companies with no business plan, or business plan to merge or acquire an unidentified entity (i.e. blind pool)
• Companies other than a microfund that propose to use the funds raised to provide loans or make investment in other entities.
• Any other type of entity that is specified by SC

An issuer may only raise, collectively, a maximum amount of RM20 million through ECF platforms in its lifetime, excluding the issuer`s own capital contribution or any funding obtained through a private placement excersize.

To raise through Equity Crowdfunding, companies have to provide Leet Capital information on their business, shareholders and directors. The companies also have to clearly state the allocation of the funds and why it is required, which should be shown in relevant business cases and projections.

Most importantly, the SC has several guidelines that mandate for various levels of audited and certified financial information depending on the amount of money intended to be raised.

• As a company seeking to be hosted on our platform, you are required to provide the following:
• information that explains key characteristics of the company
• information that explains the purpose of the fund raising and the targeted offering amount
• information relating to the business plan of the company
• Financial information relating to the company eg audited financial statements or certified financial statements or information by the company’s management (if the company is newly established)

A company proposing to be hosted on our platform shall ensure that all information submitted or disclosed to an ECF operator is true and accurate and shall not contain any information or statement which is false or misleading or from which there is a material omission.

Once you agree to host on our platform, we will charge a one-time administrative fee of RM 2,000.

In addition to the above, we will charge a fundraising fee of between 5% to 7% for funds successfully raised.

The fee will cover the charges for setting up a crowdfunding campaign on our platform, roadshows and effecting a nominee arrangement for one year.

If your fundraising is unsuccessful, all the funds will be refunded to the investors.

As there may be certain shortfall due to transaction and banking charges incurred by the custodian and the investors respectively, we reserve the sole and absolute discretion to deduct the ‘shortfall’ amount based on the administrative fee to ‘top up’ for the ‘shortfall’.

A company seeking to raise money on Leet Capital has to apply and undergo a due diligence process by Leet Capital.

If your application is approved by Leet Capital, you will sign an Issuer Agreement with Leet Capital which sets out the agreed fee and other terms and conditions required for you to be hosted on our platform.

After that, we will assist you in creating a crowdfunding campaign site on our platform and help you launch your campaign, which typically runs for around 30-60 days.