Investors and start-up entrepreneurs introduced to “crowdfunding” through the launch of www.crowdisland.lk

Backed by an experienced consortium of founders, the recently launched online platform www.crowdisland.lk aims to bring together talented entrepreneurs and quality investors to make crowdfunding a reality for Sri Lankan start-ups and SMEs. Dr. Harsha De Silva, Deputy Minister of Foreign Affairs of the Government of Sri Lanka, graced the official launch of Crowdisland as the Chief Guest. The key founders of Crowdisland are Jeevan Gnanam, Director – SA Group who kick started Orion City and SAKS with hands on experience investing and mentoring over 15 startups, along with York Street Partners, a boutique investment bank based in Sri Lanka that focuses on M&A, Capital Raising and Strategic Advisory Services and has worked with many leading Sri Lankan companies as well as promising start-ups.

Speaking on the venture, Jeevan Gnanam commented, “Crowdfunding is widely known as the practice of funding projects or ventures by raising small monetary contributions from a large number of people. The concept is a form of alternative finance, which has emerged outside of the traditional financial systems. Sri Lanka is witnessing a strong start-up culture that is sowing the seeds of innovation-driven growth for the future. Crowdisland aims to work with a community of investors who are willing to fund and support this new dawn of creativity and innovation in Sri Lanka, and bring them together with promising entrepreneurs with innovative ideas and concepts. This is a new and exciting investment opportunity not only for high net-worth investors but also more retail-oriented investors. It also provides an impetus for existing entrepreneurs to grow their businesses, and future entrepreneurs to take the plunge.”

Sujendra Mather, Managing Director of York Street Partners (Pvt) Ltd. said, “We aim to start from a slightly limited platform of equity crowdfunding from mainly high net worth investors, and work towards larger scale project crowdfunding that can reach rural entrepreneurs, once the government implements a more supportive regulatory framework. We are currently hampered with old regulations that are prohibitive to crowdfunding. For example, according to the Company’s Act, a private company can only have 50 shareholders, which ideally should be increased. Payment gateways have been hesitant to support us due to their unfamiliarity with the concept. We would also like to see the SEC getting involved and supporting the concept. It is pertinent to note that Crowdisland is neither a deposit-taking institution, a trading house, nor an investment advisor. It is a platform which brings entrepreneurs and investors together, facilitating the development of new ventures. The online platform will not influence either party in any direction, instead being an interface between investors and entrepreneurs, enabling the transfer of ideas, information and capital between them. Successful startups are known to grow as fast as 100% year on year for the first few years, and need investment to fuel this growth. Given the high-risk nature of start-ups, it is essential to spread the risk of one investment across the crowd of investors, and ideally one investor should allocate capital across a portfolio of these early-stage venture investments. The platform is designed to nurture a strong network of peers, mentors and strategic investors to groom Sri Lanka’s next wave of innovators and entrepreneurs.”

The founders of Crowdisland believe the time is right to initiate the crowdfunding concept, as indicated by the increasing number of startups, venture competitions, and SLASSCOM’s target of reaching 1,000 startups by 2020. Banks are traditionally not startup and SME friendly, making it tough for promising business ideas to raise vital seed capital. Crowdisland aims to solve the problem of young businesses struggling to raise early-stage capital for growth, and evolve into successful mid-sized businesses of the future.