Crowdfunding operations may be conducted using crowdinvestment vehicles. These are simple, low-cost structures that may be used to group many crowdinvestors into a vehicle that counts as one shareholder on the shareholder register of the project sponsor, and represents the interests of the crowdinvestors.
e. Crowdinvestment vehicle for a single crowdfunding operation
Crowdinvestment vehicles may be used for a single crowdfunding operation, in which case the crowdfunding intermediary must include all relevant information about the vehicle (type of structure, elected representative(s), fee structure, location and modes of communication, disbursement of proceeds and exit/liquidation) in an Investment Agreement document. This document must be easily understandable by the categories of crowdinvestors solicited, and a copy must be sent to supervision@africancrowd.org.
f. Crowdinvestment vehicles for multiple investments
Crowdinvestment vehicles may be used for multiple investments, in which case the vehicle becomes a shareholder in more than one project sponsor. Crowdinvestors may contribute funds to the vehicle during a fixed period fundraise, or on a rolling basis. The crowdfunding intermediary may involve the crowdinvestors in deliberations around the vehicle’s investment theme or hypothesis, and its investment decision-making protocols. The crowdfunding intermediary, who must hold a Category 1 ACfA Label, must include all relevant information about:
- the crowdfunding intermediary’s relevant qualifications and experience,
- the investment hypothesis and/or investment theme,
- the vehicle: type of structure (evergreen or closed-ended), legal form, investment committee, fee structure, financial instruments, location and modes of communication, disbursement of proceeds and exit or liquidation.
The above information must be included in a Private Placement Memorandum (PPM) document. This document must be easily understandable by the categories of crowdinvestors solicited, and a copy must be sent to supervision@africancrowd.org.
