Crowdfunding Crowdfunding #6 fundraising and investment alternatives

            After we learned about Crowdfunding in various forms including Donation - Reward - Equity -Debt previously. And we know that fundraising through Crowdfunding is very important to SMEs. Because this is the first round of fundraising. where the required amount is too high to rely on just those around you The one called FFF (FFF: Friend Family and Fool), but it may not be high enough to attract Venture Capital (VC) to invest. In the period when there was no Crowdfunding system in place, if there were no angel investors to help invest (average investment amount approximately 2.2 million baht), this would create a funding gap (Fundraising GAP), causing the growth of SMEs to stagnate if No Crowdfunding (although there is a decent story but unable to find investors to invest)

            In addition to the benefits of Crowdfunding, this time I would like to talk about using Crowdfunding to create value for the company. Which is another benefit. In addition to receiving money from fundraising to use for various purposes.

            Crowdfunding tools in various forms It affects the value of the company at different levels, as shown in Figure 1, which we have further developed from Crowdfunding and Value Creation by Moriah Meyskens and Lacy Bird, 2015. It can be seen that Debt and Equity Crowdfunding will have an effect. with a high level of company value

Figure 1: Fundraising in various forms and the impact on company value

The need to create value for the company

            Planning to create value for the company or various organizations is necessary It is not just about creating numerical value. But it is also a part that creates a long-term strategic view for the company. It is also a response to the needs of shareholders. and customers as well Creating value for the company This can be done through Crowdfunding by designing the shareholding structure. and price structure (Valuation Model) that is appropriate However, this process is related to both Companies looking to raise funds and investors

Companies that want to raise funds

            As for companies wanting to raise funds (especially Equity Crowdfunding), they must know that fundraising must have a method. And how is the process done? In order to make the company have higher value. For example, designing a roadmap for fundraising, which will result in creating a strategy. To make the company have higher value, such as

            1.Creating a strategy for setting sales targets calculated from Designed company value

            2.Determining strategies for expanding the market and the time period that must be completed corresponds to Roadmap for fundraising

            3.Determining strategies for conducting M&A at the SME level

investor

            As for the investors, It will be a natural part of investors. There is a demand for investment in the company. Benefits grow. Therefore, investors will be looking for A company that places importance on creating value

            It can be seen that both those who want to raise funds and investors must have ideas combined needs They are related through the company's value creation process.

Creating company value through Crowdfunding

            Regarding creating value for the company There are many ways to do it. Whether it is designing retained earnings, setting assumptions through KPIs and making projections to make Discounted Cashflow (DCF), creating stories. (Good stocks must have a story) to have interesting points consistent with global trends such as BCG (Bio-Circular-Green Economy) or ESG (Environmental, Social and Governance) or selecting industries that the market is interested in and values. As every investor is familiar with.

            “Creating company value through Crowdfunding requires this process as well.”

            In addition to Valuation for Crowdfunding, the above factors must be taken into account, as the company is moving beyond a small field. Go to a bigger field Therefore, it is a period in which the company And the management team must be more professional. Have a reliable accounting system There is a systematic company structure. Have a clear strategic plan These factors affect all valuations.

            And another point that is no less important. During fundraising through Crowdfunding, it is about building trust with investors, doing your homework, and trying to talk. Exchange with experts or consultants in various fields Make the company improve and be stronger in the right way. Many difficult questions that comes from outsiders and investors It's all about sharpening your mind. that will be used in drafting strategy plans (Strategy Design) into shape more clearly and can actually be put into practice It's not a pretty plan. But it is difficult to apply in practice and poses a challenge in actual implementation. (implementation challenge), which I see as one of the most difficult points of business operations that encounter problems These items must be Tailormade and cannot be copied from samples. or books easily Otherwise, companies must succeed And finally, companies raising funds must redesign the number of shares. After successfully raising funds as well. Therefore, it will be a completely value-added form of fundraising.

            If the company can do this The path to successful fundraising and creating value for the company at the same time It's like shooting two birds with one stone. It tends to be a high possibility.