Table of contents
- Glossary of Definitions and Abbreviations
- Chapter 1. Crowdfunding Regulatory Regime
- Section 1.1 Private companies raising publicly: a new regime for African SMEs
- Section 1.2 Crowdfunding Intermediary: a new regime for African intermediaries
- Section 1.3 Crowdinvestors: a new regime for African individual investors
- Section 1.4 Implementation of the ACfA Label Framework
- Title 1.4.1 Recognition of the SRO by national regulatory authorities
- Title 1.4.2 Cross-border securities-based crowdfunding operations
- Title 1.4.3 Treatment of non securities-based crowdfunding operations
- Chapter 2. Crowdfunding Intermediaries
- Section 2.1 ACfA Label Categories
- Section 2.2 Applications
- Chapter 3. Types of Crowdfunding Operations
- Section 3.1 Crowdfunding Operations permitted only under Category 1
- Section 3.2 Crowdfunding Operations permitted under both Category 1 and Category 2
- Section 3.3 Treatment of offerings not considered as securities
- Chapter 4. Marketing
- Chapter 5. Cross-border Crowdfunding
- Chapter 6. Privacy and Data Protection
- Chapter 7. Anti Money Laundering and Terrorism Financing
- Chapter 8. Supervision, Audits and Enforcement
An equity-based crowdfunding operation takes place when a project sponsor sells a portion of its shares to crowdinvestors. Crowdinvestors may invest directly, or be grouped into a crowdinvestment vehicle. Direct equity-based crowdinvestments include:
a. Common shares
Crowdfunding operations for common shares allow crowdinvestors to become minority shareholders with appropriate voting and information rights.
b. Preference shares
Crowdfunding operations may be conducted for preference shares which give shareholders preferential rights such as priority in payment of dividends or upon liquidation.
c. Redeemable equity
Crowdfunding operations that are run for redeemable equity are ones in which crowdinvestors buy shares with the option to sell them back to project sponsors, or in which project sponsors have the option to buy back the shares, both according to a predefined price or formula.
d. SAFE (Simple agreement for future equity)
Crowdfunding intermediaries may conduct crowdfunding operations for SAFE notes, which allow crowdinvestors the right to own future shares in the project sponsor, without the share price being determined at the time of investment. SAFE notes provide a formula or mechanism to determine the future share price. This mechanism must be explained in detail to potential crowdinvestors.