SEC oks PH’s first crowdfunding portal
MANILA, Philippines — The Securities and Exchange Commission (SEC) has approved the country’s first crowdfunding portal – one that will be operated by a joint venture between Gotianun-led conglomerate Filinvestment Development Corp. and Investree Singapore Pte. Ltd.
The local entity, called Investree Philippines Inc., was authorized by the SEC to operate a crowdfunding platform that will connect small, medium, and emerging enterprises with banks and other lenders. The registration of Investree will be valid for one year, subject to a review by the SEC of the actual operation of the crowdfunding portal during the first 11 months for a possible extension, the SEC announced on Thursday.
Crowdfunding is a fundraising activity typically conducted through an online platform for startups and small and medium enterprises. It basically involves three parties: the entrepreneur or project initiator; the supporters or those willing to fund the business idea or project; and the platform or moderating organization that brings the entrepreneur and supporters together to realize the business idea or project.
Crowdfunding may be donation-based, where supporters pool their resources to support a charitable cause; or reward-based, where supporters give money in exchange for a “reward,” usually a product produced by the project initiator.
Crowdfunding may likewise be lending-based, where supporters lend money to the entrepreneur and receive his/her legally binding commitment to repay the loan at predetermined time intervals and interest rate; or equity-based, where supporters invest in shares sold by the entrepreneur and receive a share of the profits in the form of a dividend or distribution, subject to the entrepreneur’s discretion.
