If Malaysian Prime Minister Mahathir Mohamad could crowdfund the $250 billion Malaysia debt and raise $2 million in 24 hours, there’s good news for Malaysia small businesses trying to raise cash flow in a similar manner. Many options exist for startup funding in Malaysia, with crowdfunding serving as one of the most recent over the past several years.
Crowdfunding is exactly like it sounds, raising money from a crowd of people. There are two common types of small business crowdfunding are peer-to-peer lending and equity crowdfunding.
- Peer-to-peer lending is a way for individuals or businesses to lend money to small business owners. It’s similar to a traditional loan with less stringent requirements and repayment happening at regular intervals with interest being paid. The Fundaztic platform is one option for Malaysian small businesses to find investors for peer-to-peer lending.
- Equity crowdfunding usually starts with a fundraising campaign for a specific amount of money. Anyone can contribute toward the campaign. In exchange, investors get shares in your company or other perks for their investments. You can try equity fundraising on the ATA Plus platform, which serves businesses in Malaysia.
Crowdfunding can be difficult to do successfully, but there are a few tips to help:
- Have a unique business proposition. It might help to write a business plan to assess your competition and edge on the market.
- Offer an award that’s compelling enough to make people bite.
- Invest in creating a high-quality and engaging video to spark interest, high-quality visuals and design are important to demonstrating you’re serious.
- Research similar projects – Kickstarter and Indiegogo don’t remove campaigns and there’s a wealth of data for you to see what has been successful or not.
- Only ask for what you need. Write the financial section of a business plan can help you forecast exactly what you need.
If a traditional loan doesn’t fit your small business needs, consider trying crowdfunding for your startup capital. In addition to the crowdfunding platforms mentioned above, check out PitchIN, FundedByMe Malaysia, Eureeca, CrowdPlus.Asia, and Crowdo to get your company started.