SCHEDULE
The 14th edition of INOTEX provides a platform for companies seeking to raise capital through crowdfunding.
Crowdfunding, also known as crowd-sourcing, is a modern financial tool that enables capital to be raised through collective micro-investments. This innovative method has gained significant attention globally and has also become increasingly popular in our country.
Also referred to as collective investment or community capital raising, crowdfunding involves gathering the financial resources required for a project from the micro-capital contributions of a large number of investors. In today’s digital age, this process is predominantly carried out online.
Primarily used for medium-scale investments, crowdfunding is a common method for financing knowledge-based companies, startups, and entrepreneurial ventures. It serves not only as a means to launch new businesses but also as a tool for sustaining operations and driving development.
Each crowdfunding campaign comprises three main components:
1- The capital recipient or project initiator, who seeks financial resources to begin or expand a venture.
2- The investors, who provide the necessary funding.
3- The platform, which acts as the intermediary between the capital seekers and providers.
In our country, crowdfunding operates under a revenue-sharing model regulated by the Iran Fara Bourse Company.
Most crowdfunding campaigns focus on attracting investors to provide one year’s working capital for a business. In these projects, the capital return period under the revenue-sharing model is typically less than one year. During this period, the principal amount, along with a share of the profits, is returned to the investors. Given the inherent risks of this model, investors naturally expect higher returns compared to traditional bank deposits or fixed-income investment funds.
Funds are raised based on a business plan submitted to the crowdfunding platform. The maximum duration for raising the required capital is one month. If the full amount is raised within this timeframe, the campaign is deemed successful, and the investment proceeds. Entrepreneurs are required to contribute at least 10% of the total investment amount from their own resources at the start of each campaign, ensuring they share in the project's risk and potential reward.
There are specific investment limits to protect individual participants. Legal entities face no restrictions on the amount they can invest, but individual investors are capped at 5% of the total funding amount. These limitations aim to minimize risks for individual investors while enabling businesses to secure funding for their projects.
Crowdfunding not only facilitates business financing but also allows investors to participate in the country's economic growth and production initiatives.
