Kuala Lumpur, Malaysia (2nd April 2015) – Many people are often intimidated by the idea of entrepreneurship simply from the sheer difficulty of securing seed funds to bring forward their big ideas. As a result, many ideas remain unrealised.
Panellists at the ‘Is Crowdfunding the Key to a New Generation of Entrepreneurs?’ plenary discussion at the WHS 2015 Business Forum this morning discussed crowdfunding as a means of enabling the next generation of young entrepreneurs.
Getty Goh, who is the CEO of real estate crowdfunding firm CoAssets, likened the concept of crowdfunding to the traditional practice of building a mosque by collecting money from the whole community.
“Opportunities’ at present are only available for people who are connected, which is unfair. Why can’t the poor guy get the juice?” he asked.
Crowdfunding he believes is a way of democratising the availability of funding by allowing ordinary people with big ideas to put forward their ideas and be funded by investors who share similar passion and background as them. This opens up a whole new set of possibilities to people who are ordinarily excluded from accessing large capitals due to their backgrounds.
Navid Akhtar, CEO of Alchemiya Media Ltd who moderated the discussion, opined that traditional forms of funding such as the banks were risk averse, and often failed to grasp new opportunities due to their inflexibility.
As a result, a lot of great ideas are unable to be actualised due to the reluctance of traditional institutions to invest in them.
Umar Munshi who heads Club Ethis, a Syariah-compliant crowdsourcing firm that specialises in real estate, told the audience that governments were starting to see the value of crowdfunding.
While it is still unregulated in jurisdictions such as Singapore, governments are starting to reciprocate and work together with players to try and understand this concept better.
“In this regard, I feel that Malaysia is moving ahead of Singapore,” he told the audience.
Umar added that while much has been achieved by crowdfunding in recent times, a lot more can be done in order to reach poorer entrepreneurs who are often based in less connected rural areas.
He gave examples of using crowdsourcing to fund infrastructure projects in countries such as Indonesia where this often went hand in hand with the waqaf development.
“Islam is a religion that encourages one to do business, we should not be ashamed of it,” said Navid Akhtar.
He also added that traditional funding mechanisms used by Muslims in the past by buying properties and starting a business as an example of a deep- rooted culture of community funding. This, he says, makes crowdsourcing all the more suitable for young Muslim entrepreneurs.
Crowdfunding is about giving people who otherwise do not have an opportunity, a shot at building up their own businesses and making something out of their lives. This in turn allows communities to make a profit by investing towards a worthy idea.
“After all Islam is all about compassionate capitalism,” Navid concludes.