Last updated: 26 June 2019
This Project Sponsor Prospectus (DOC 6-2019) constitutes the information that project sponsors are obligated to provide to potential crowdinvestors during a crowdfunding operation that occurs in compliance with the ACfA Label Framework. The prospectus is prepared by a registered Crowdfunding Intermediary that holds the ACfA Label Category 1 or Category 2.
NOTE: the prospectus can be provided in any format, as long as the informational content is accessible, fair, balanced and easily understood by crowdinvestors.
OBLIGATORY DISCLAIMER
Crowdinvestors are hereby informed that the present securities offering does not require and is not subject to a prospectus approved by the national securities regulator. Crowdinvestors are informed that neither the African Crowdfunding Association nor the national regulator are responsible for the accuracy of the content provided in the present Project Sponsor Prospectus.
OBLIGATORY RISK WARNING
(Equity and Equity-like Crowdfunding Operations)
The purchase of shares in small businesses involves the following risks. You are responsible for diversifying your investment portfolio across several asset classes. We recommend that you consult with your financial planner prior to investing, and do not invest more than 10% of your savings.
- Loss of capital: The initial amount of capital invested is not guaranteed. This means that if the business does not succeed in meeting growth targets or is forced to liquidate, your shares can lose some or all of their value.
- Liquidity risk: shares in small businesses are not immediately liquid. This means that they cannot readily be resold or transferred to another investor, and could be immobilised for several years.
- Valuation risk: the valuation of shares in small businesses is an estimation based on several factors and is never a precise valuation.
- Risk of dilution of shares: small businesses are typically in a phase of rapid expansion that might be financed by several rounds of capital raising. This implies that your initial share in the company might be diluted in subsequent rounds as more shares are issued.
OBLIGATORY RISK WARNING
(Debt and Debt-like Crowdfunding Operations):
Lending is risky. Borrowers may default and you may lose some or all of your money. Make sure that you diversify your investments and only lend money that you can afford to lose.
Prospectus requirements by type of crowdfunding operation
| PROSPECTUS SECTIONS | EQUITY AND EQUITY-LIKE CROWDFUNDING |
| I. Presentation of the Crowdfunding intermediary | • Name, Surname of the Crowdfunding Intermediary • Crowdfunding Intermediary Registration. No. • Category of ACfA Label • Registered address of the Crowdfunding Intermediary • Contact phone number and email of the person responsible for the information in this prospectus IF THE CROWDFUNDING INTERMEDIARY IS ACTING FOR ITS OWN ACCOUNT: • Name, Surname and contact details of the registered Crowdfunded intermediary and their position in the company • Name, Surname, Address and contact details of the independent auditor/ accountant |
| II. Presentation of the Project Sponsor | • Name of Company • Type of Company • Company Registration Number • Company registered address • Contact phone number and email • Website and/or social media links |
| III. Information about the business activity | • Who manages the business and what is their background, experience and qualifications? • What problem is the business trying to solve? • What has been the journey of the business to date? • What is the business strategy? • Who are the clients, suppliers and distributors? • What information is known about the size of the addressable market? • Who are the direct and indirect competitors? • What are the key risks to the business? • Business forecasts showing base case, worst case and best case |
| IV. Information about the fundraise | • How much capital is being raised for what percentage of equity in the company? • How will investors’ money be spent? • What data, financial metrics and information about the business progress will be given to investors after they invest? • What evidence is there today that the company can track the relevant data and metrics and investors? • What evidence is there today that the management team is committed to good governance? • How will the investors exit the investment? |
| V. Legal information | • Contact details of the Company Secretary and/or transaction lawyer • Terms of investment (share price, class of shares…) • Company Articles and Shareholders Agreements, if applicable • Capitalisation table or shareholding structure before and after investment • Number of votes per share, decisions requiring a vote, majority and quorum rules, modalities of annual general meetings • Modalities of share subscription, distribution of proceeds, conditions of share transferal or resale, and exit/liquidity events • Investment contract or Agreement |
| VI. Due diligence checklist | • Company registration certificate • Existing accounts (unaudited or audited) • Previous annual financial statements (balance sheet and income statement) • CVs of management and organisational chart |
| PROSPECTUS SECTIONS | DEBT AND DEBT-LIKE CROWDFUNDING |
| I. Presentation of the Crowdfunding intermediary | • Name, Surname of the Crowdfunding Intermediary • Crowdfunding Intermediary Registration. No. • Category of ACfA Label • Registered address of the Crowdfunding Intermediary • Contact phone number and email of the person responsible for the information in this prospectus IF THE CROWDFUNDING INTERMEDIARY IS ACTING FOR ITS OWN ACCOUNT: • Name, Surname and contact details of the registered Crowdfunded intermediary and their position in the company • Name, Surname, Address and contact details of the independent auditor/ accountant |
| II. Presentation of the Project Sponsor | • Name of Company • Type of Company • Company Registration Number • Company registered address • Contact phone number and email • Website and/or social media links |
| III. Information about the business activity | • Who manages the business and what is their background, experience and qualifications? • Brief company overview |
| IV. Information about the fundraise | • How much capital is being raised and why? • How will crowdinvestors’ money be spent? • Are there existing loans or financial obligations that are senior or junior to this loan or financial product? • What evidence is there today that the company can meet its financial obligations to crowdinvestors? • What happens to crowdinvestors’ money if the company defaults or needs to restructure its financial obligations? • Are there any guarantees in place that benefit crowdinvestors? |
| V. Legal information | • Contact details of the Company Secretary and/or transaction lawyer • Terms of investment (share price, class of shares…) • Investment contract or Agreement |
| VI. Due diligence checklist | • Company registration certificate • Credit score (if applicable) • Proof of collateral (if applicable) • CVs of management and organisational chart |
| PROSPECTUS SECTIONS | SINGLE OPERATION CROWDINVESTMENT VEHICLES |
| I. A) Presentation of the Crowdfunding intermediary | • Name, Surname of the Crowdfunding Intermediary • Crowdfunding Intermediary Registration. No. • Category of ACfA Label • Registered address of the Crowdfunding Intermediary • Contact phone number and email of the person responsible for the information in this prospectus |
| I. B) Presentation of the Crowdinvestment Vehicle | • Name of Crowdinvestment Vehicle • Legal structure • Fee structure (management fee and success commissions or “carry”) |
| SECTIONS II – VI of the relevant PROJECT SPONSOR PROSPECTUS must also be provided. |
| PROSPECTUS SECTIONS | MULTIPLE INVESTMENT CROWDINVESTMENT VEHICLES |
| I. Presentation of the Crowdfunding intermediary | • Name, Surname of the Crowdfunding Intermediary • Crowdfunding Intermediary Registration. No. • Category of ACfA Label • Registered address of the Crowdfunding Intermediary • Contact phone number and email of the person responsible for the information in this prospectus |
| II. Presentation of the Crowdinvestment Vehicle | • Name of Crowdinvestment Vehicle • Type of vehicle: open-ended or closed-ended • Legal structure • Investment Strategy • Targeted returns • Target size of the crowdinvestment vehicle and “first close” modalities • Evaluation period(s) or frequencies for returns • Type of financial instruments used for the underlying investments • Mandate objectives (eg. social or environmental impact, gender lens…) • Liquidity and monetisation • Fee structure: management fees and “carry” or success commissions |
| III. Information about the target portfolio companies | • Provide “snapshots” of the target company pipeline • Provide details of the pipeline partners and their ACfA Crowdfunding Intermediary registration numbers if applicable |
| IV. Legal information | • Contact details of the Company Secretary and/or transaction lawyer • Contact details of the Custodian • Legal addenda |
| VI. Due diligence checklist | • CVs of management and organisational chart |
