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Equity Crowdfunding (ECF)
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What Is Crowd-Funded Venture Capital (CFVC)?
Crowd-Funded Venture Capital (CFVC) are Microfunds that will be set up on pitchIN. Only registered venture capital funds are allowed to raise MicroFunds on the platform. These CFVCs can raise money for investments on pitchIN only from sophisticated investors.
The eligibility criteria consists of the following:
- Venture Capitals must be registered with the Securities Commission.
- Only sophisticated investors can join a CFVC.
- Funds raised by a CFVC must only be used to invest in Issues listed on pitchIN.
Difference between Venture Capital (VC) and Crowd-Funded Venture Capital (CFVC)
| Differences | Venture Capital (VC) | Crowd-Funded Venture Capital (CFVC) |
|---|---|---|
| Source of Funding | Usually sourced from institutional investors, such as pension funds, endowments, and wealthy individuals, who are referred to as Limited Partners (LPs). | Funded by a large group of individuals who invest smaller amounts of money, typically through online platforms. |
| Investment Size | Generally invest larger amounts of money, ranging from several hundred thousand dollars to tens of millions of dollars, per investment. | Investments are usually smaller, ranging from a few hundred dollars to a few thousand dollars per investor. |
| Control | Take a more active role in the companies they invest in, providing guidance, mentorship, and oversight. | Investors generally have little or no say in the management of the companies they invest in. |