When a Stock Exchange Looks into Crowdfunding

By Irene Tordera, CrowdFundBeat Guest Contributor,  Singapore Exchange, one of Asia’s leading stock markets, has begun considering the feasibility of an equity crowdfunding platform for early-stage companies, and has formed a team focused on small and medium-sized enterprises.

The purpose which pushed Singapore Exchange to create a team to investigate the possibility of setting up a crowdfunding portal is to find a way to improve access to finance for SMEs. In fact, public listing may not be feasible or cost-effective for businesses that do not have a minimum scale.Therefore an alternative portal where SMEs can raise finance from accredited investors could be a potential way to bridge the gap to public markets.It is interesting to see that a stock exchange is looking into crowdfunding as a way to expand its activity. Crowd Valley, which has been active in this new sector at global level since already more than two years, has observed during this time an increasing interest from traditional finance actors. This confirmed what the company thought from the very first moment it entered the market: crowdfunding is not just for startups and creative projects. There is a whole world of different applications out there.The following graph well represents the variety of crowdfunding applications that may exist, by crossing three different dimensions: Security Type, Investor Type and Scope of Portal. In the case of Singapore Exchange, if they were ever to expand into crowdfunding, their portal would be allocated somewhere in the mid-upper right corner, since it will likely be only accessible by accredited investors buying equity shares in SMEs. The portal’s scope would be “vertical integration” as Singapore Exchange would expand its activities down the line towards smaller companies.

Crowd Valley can provide solutions for a variety of crowdfunding applications, as shown in the graph. Get in touch with our team for more information.References Sacks-McLeod (2014). People power at Singapore Exchange! Crowdfunding on the horizon. Leaprate.com Photo credit to: Storm Crypt.  http://bit.ly/1zrjlxl


About the author – Irene Tordera , Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.

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