BELEGA is a start-up that plans to deliver a state
of the art technology platform which allows Small-
Medium Businesses (SME’s) access to the peer-to-peer fundraising market.
The BELEGA platform will allow those SMES looking to raise funds access to cross-border Crowdfunding opportunities, and the ability to build relationships all while working with the startup community. The aim is to become a leading global crowdfunding platform for these SME businesses.
This white paper will explain, in detail, our strategy and approach to business execution, and ultimately how we intend to build and delivery a successful business. All the information contained within this white paper are subject to the disclaimers contained at the end of this document. You should read these before you continue.
BELEGA will deploy a unique blend of leveraging its FinTech business experience and a global network of both startups and investor relationships. In doing this, BELEGA can offer SME companies a new, alternative financing opportunity.
BELEGA believes that the crowdfunding market offers SME within underserved areas of the globe, access to new finance. A great example of this is the African FinTech space It is frequently looking for both European and Asian seed and growth funding..
BELEGA is confident that it can manage market segments such as this, better than this market better than other players in the crowdfunding space. This assessment is based on the quality of the team’s background along with its network.
The business model BELEGA will deploy, intends to enable the company to generate a commission on each client based on the total amount of funds raised for every project.
The team will be based in Europe and led by FinTech professionals with decades of experience in developing markets. BELEGA will position itself directly to have access from experts with experience working with large global technology and finance organisations.
BELEGA was originally based in Malta. Over the last eighteen months, the team has spent a large amount of
time and money with the aim of being regulated by the Malta Financial Services Authority (MFSA). After the
introduction of the Virtual Financial Assets (‘VFA’) Act in 2018, this seemed like a logical step. Using the
benefits of this Act to conduct a legal and regulated Token Sale. During 2018, Malta’s then-Prime Minister
Joseph Muscat presented Malta as a “blockchain island” at the United Nations General Assembly. However,
by the end of 2019, it became apparent to BELEGA that Malta would not follow through on this promise as
no licenses had been issued by the MFSA. As a result, the majority of blockchain, DLT and cryptocurrency
based businesses who moved to Malta, have since left. Including large named such as Binance, the largest
cryptocurrency exchange in the world.
Because of the change in market and failings of the Maltese license issuers, BELEGA made the strategic decision to change approach entirely. The BELEGA team took the critical decision to exit Malta, and focus on moving to a jurisdiction which would allow it to meet its fundraising objectives.
BELEGA saw this as an opportunity. An opportunity to re-energise the company and initiate a strategic revision, allowing us to adapt both the jurisdiction where the raise would be conducted and make the necessary changes to the business model for planned success. As a result, we entered 2020 with the new BELEGA.
The BELEGA project has the advantage of nearly three years of project preparation, having passed through the fluctuation of blockchain interest from sector professionals, amateurs and the mass market. We have worked closely in Europe and Asia with technology innovators, product design and marketing professionals. Alongside this, we are now working with top level legal and regulatory professionals and developed relationships with potential partners who are fundamental to delivering results. Today we use this foundation to guide our strategy and belief that in 2020 we have developed a strategy, model and business plan to deliver value.
BELEGA is issuing its BLGA token as an Initial Token Offering to generate seed funding, enabling BELEGA
to grow and meet its end goal creating a UK Crowdfunding business. The BLGA Token will fuel the
crowdfunding ecosystem as it may be used by its holder in exchange for BELEGA services at discounted
rates, and will provide participants exclusive project membership benefits.
The project has established relationships with product and user experience experts, licensed technology partners, licensed payments processors, licensed in the UK and Europe. Leadership is on board and has been working with the founders to develop the strategy and business model for the past two years. Our short and long term vision are in place and we have worked through the financial planning exercise to understand the path to value creation. The next step is to raise the seed funding necessary to initiate the business build.
Crowdfunding has brought fintech closer to its customers, as the industry experiences a daily buzz related to
Unicorns, digital banking, a surge in lending, and success stories from crowdfunding capital raises.
After 2008, trust in banks and financial institutions was at an all time low. The global financial collapse sent the world into a depression, not only financially, but psychologically. The recovery led to a new breed of financial service provider driven by the alternatives born of the collapse of trust in the regular providers. Banks, once considered the cornerstones of global finance, failed, and people in growing numbers actively searched for alternatives.
Fintech has grown as a sector, and although initially in total opposition to the banks, today the relationship has led to collaboration, partnerships and increasingly, M&A combinations. In FinTech, the focus is on how to monetise, and the industry has spent a lot of time on this, developing innovative business models, transactional revenue understanding, and scale.
In our view, the industry is moving in the right direction, but we'd like to approach fintech from another angle, one where value is created for the companies, and investors. Crowdfunding solutions are providing fastmoving companies access to capital from a diversified source, eager to be involved based on the press pouring daily out of the industry. It is common that advanced rounds of funding are being followed by large crowdfunding rounds and in the meantime, adding to its base of users, as these startup investors, their friends and family, are the early adopters pushing the product deeper into the market.
In the crowdfunding model, investors evolve into users with influence, and in return, the companies leverage those investors as sources of feedback, valuable information, and from which to pull ideas for the future product roadmap. The model enhances communication by providing a direct channel for dialogue to a vested customer base, creating an environment for developing better products, ultimately driving growth, and ideally, revenues. This change is taking place across many industries, not just finance. Businesses have learned that a product-first approach, while forging strong customer relationships through new business models and investment channels, is creating a modern dynamic with their market for their brand: owners, customers, companies, and success... democratised.
To set the scene for you, let’s look at the Revolut example. In 2016, a little known pre-paid debit card startup that allows users to exchange currencies and transfer money internationally with the interbank rate, rather than the extra fees that banks slap on users, based out of the UK, asked people to contribute into the fintech startup on crowdfunding platform Crowdcube, and those who did, saw their initial contribution increase in value by around 19 times initial contribution by August 2018. . As of today, that number is closer to 27 times initial contribution. . Translated, this means early contributors realised a 2,700 percent return on their original contribution to the company in just two years. At the moment, contributors have been offered the choice to either sell their shares back to Revolut or retain them. Today, Revolut is valued at over $1.7B, most recently launching in Singapore, Japan, and the USA.
Introduction to crowd funding models
- 1. Donation Based Crowdfunding
- The typical example of this type of crowdfunding is the fundraising for humanitarian purposes. People donate their money for a cause, an idea or simply in order to help the organisation making the campaign. In fact, the people who donate don’t expect any type of reward from their actions, they simply hope that the amount they have invested can really help make a difference.
- 2. Rewards Based Crowdfunding
- We can consider the Rewards Based Crowdfunding as the “upgrade” to donation crowdfunding. In fact, very early stage companies make these kind of crowdfunding campaigns in order to finance the production of their future product. By financing the project, the investor will get the product or a discount when the product will be ready for the market. In order to make people invest more money, there are different discount levels that are offered, usually increasing with the amount invested. However, the perception of this kind of crowdfunding is similar to the donation type because you don’t even know if the campaign will reach the target and the production will effectively start. One of the most famous platforms for rewards-based crowdfunding is Indiegogo, in which you can find innovative and hightech products that are going to be produced with the funds of their campaigns.
- 3. Debt Based Crowdfunding
- Think of a bond. A state offers these types of financial instruments in exchange for liquidity. Of course there will be an interest rate that defines the earnings that the investor will get at the end of a fixed period. It works similarly for debt based Crowdfunding. In fact, these campaigns are particularly popular among entrepreneurs who don’t want to give up equity in their start-up companies immediately and/or do not have access to more traditional types of loan facilities. These are also growing in popularity as a way for real estate developer to fund a particular real estate project or projects.
- 4. Equity Based Crowdfunding
- In an equity-based crowdfunding campaign, a person contributing money can expect to receive some ownership of the company that is raising the funds. From another perspective, the company which is running the campaign is selling off a piece of its ownership (e.g., shares, membership interest, etc.) to each of the crowd members who contributed with money. Usually the crowd is interested in participating in this kind of crowdfunding because the equity, that they are buying can address them dividend or can be sold in the future at a higher value. Equity based crowdfunding campaigns are being used more and more by entrepreneurs and start-ups seeking an alternative to traditional venture capital and angel investors when looking for a capital infusion to take their business to the next level.
- 5. [NEW] The Introduction of Blockchain Equity Crowdfunding
- Equity crowdfunding is the most interesting type of crowdfunding for investors who are seeking for great profits. In the the blockchain based equity crowdfunding model, the equities are recorded on a blockchain in order to make use of the advantages that blockchain technology brings. It is immutable too hacks such as DDoSS attacks, which is a problem that even big companies like VISA and Playstation still struggle with. It also allows for a more liquid tradeoff which makes it more accessible. By combining the blockchain technology and the equity crowdfunding, each project will have more visibility and engagement from the investor side, because they are interested in the growing of the company.
Clearly equity crowdfunding is experiencing rapid growth, here are some recent examples:
- 1. Zazu, a Lusaka-based fintech company, announced that it had raised USD 1.4M in funding in its second crowdfunding campaign, it has already announced a third coming soon.
- 2. The UK FinTech Curve, an Over-The-Top banking platform that consolidates multiple cards and accounts into one smart card and app to simplify and unify how people spend, send see and save their money, announced it's first crowdfunding campaign (Crowdcube). Curve offered eligible customers a chance to invest in "one of Europe’s hottest fintech start-ups", enabling them to invest from as little as £10 to own part of the business and gain access to some exclusive shareholder rewards. Curve raised £6m in a fast-paced crowdfunding campaign that saw £4m raised in just 42 minutes. The first £1M took five minutes and the total number of participants ended at just over 9,500 people.
- 3.Arival Bank recently raised $2.3M in a pre-Series A, equity crowdfunding campaign. The Singapore-based FinTech bank for businesses and entrepreneurs soared past its fundraising target of $864,500, and now boasts a pre-money valuation of more than $14.8 million. The campaign marks the first time a digital bank has conducted an equity crowdfunding raise in the USA. Seedinvest, an SEC-licensed broker-dealer platform based in New York, spearheaded the fundraising with Crowdcube in the role of joint partner.
In 2020, many SME’s are looking for new ways to obtain financing for their startup. The world has been
rocked by COVID, and large nations such as the United States have re-entered recession. As a result,
financial institutions are once again, pulling the rug from under many new companies looking to make their
It is because of this reluctance by traditional financial institutions, that the peer to peer market is moving forward at a speed the market has not seen in other comparable segments. In recent years, lending and investing on a peer to peer model, has spread globally as user experiences and business models are reimagined. Much of what is to come in the next few years will certainly be about consolidation, at all times enhanced user experience and crucially important, marketing innovation.
The battle for attention is waging and an ethical, yet aggressive solution is what may differentiate a brand. Let's not forget, the same banks are pouring hundreds of millions into FinTech M&A, into the very same challengers who spoke so poorly of them publicly in their initial days.
For those watching the industry closely, we know that today's founder/CEO is frustrated by venture capital, who many say do very little real venture investing, but instead focus on the lowest possible risk investments working in tandem with their partners as “followers”. Twinning this with the fact that most VC firms are simply looking for their ‘pound of flesh’ and give little to no care about the company itself. Rather, they place their focus on the profits to be made and their exit strategy.
Founders and innovators, are looking at alternatives and crowdfunding has become a proven channel for these different funding rounds. A good performing peer to peer fundraising can expect to reach numbers as high as $15M, although regulatory hurdles keep these rounds to lower amounts for smaller organisations (typically less than ~$8M).
This market is driven by great user experiences, promoting ease-of-use for the companies and investors who expect easy-to-use mobile experiences, and providing holistic, integrated digital lending capabilities, helping to address the market's changing preferences.
One advantage of the past ~10 years is that the industry is making strides to overcome the fear of mobile, with user uptake of mobile financial services soaring in global markets, including in the USA where, for example, Bank of America's digital channel now accounts for 26% of total sales, with mobile representing over half of these digital sales. And as another good sign for the lending sector, despite this growth, BOAs strategy to increase these numbers is centered around focused energy on even more advanced areas of digital account opening, like lending.
In an example of traditional cornerstone investors moving to an online and mobile financial services focus, Goldman Sachs CEO, David Solomon, recently said, “I think we’re in the early stages of building a digital platform for consumers that gives them more information, more tools are their disposal. Over the last three years we’ve built a digital bank with $55 billion in digital deposits, with $5 billion of loans; 4 to 5 million customers; a brand-new credit card platform and have launched a card with Apple. I feel like that’s pretty good progress over a short period of time.”
Traditionally, only professional investors could get involved in equity financing rounds, and it's clearly crowdfunding which has forged the path around this obstacle. In its simplest form, Crowdfunding connects startups with people in the market who have funds and believe in the plans of these businesses, and this simple model is expected to grow the industry to over USD 300 billion by 2025.
In the past, traditional investing could lead to a long, tiring, and often rewardless exercise. We believe crowdfunding innovation can change this, giving companies the chance to engage with investors when their ideas might otherwise never have come across the desk of a traditional investor. It also allows founders and their teams to validate their ideas before entering the market, while providing the advantage of converting investors to loyal customers and brand ambassadors by offering them incentives for their early show of support.
Equity crowdfunding is creating a new class of investor. There are genuine risks that many people who become involved do not have adequate investor experience to understand all of the implications of their investments, or, as a risk to the companies themselves, to be a positive influence on the future of the business. This places a new responsibility on those backing projects through crowdfunding platforms to educate themselves, through crowdsourced Due Diligence and progressive community conversation. Coupled with this level of necessary self-governing responsibility, crowdfunding has the real potential to become a reliable tool for venture capitalists to achieve a lasting ROI long into the future of fintech.
It is our objective at BELEGA to provide access to capital for developing market SMEs, and access to global investments for investors who want access to wider portfolio differentiation opportunities. The companies are being built today, we believe we can accelerate their growth, building our own sustainable crowdfunding business in the process.
The team has researched the market and knows our competition well. On the surface, it may appear that
BELEGA is entering a crowded space, but a deeper review of our strategy reveals that the niche market of
developing country startups that we plan to address, is very underserved.
For example, crowdfunding has been steadily gaining traction in Africa over the past decade. Still, crowdfunding in Africa remains limited compared to other regions: In 2015, the African crowdfunding market amounted to ~ $70M, accounting for less than 1% of the global crowdfunding market. However, a 2013 World Bank report estimated that by 2025, crowdfunding will be a $96B industry growing at a rate of 300% per year.
While much has been made of crowdfunding’s potential to transform small business and entrepreneurship across Africa, there are important challenges and regulatory barriers that we have identified and will address. One is example is that African entrepreneurs who use crowdfunding platforms are often operating in an unregulated market. BELEGA will address this by requiring startup companies to make substantial disclosures when providing Due Diligence information in order for BELEGA to be able to make informed decisions, and strengthen investor protections.
There are other European based platforms that allow developing country entrepreneurs to pitch their businesses and raise capital from funders abroad. However, many international platforms simply re-use their European policies and procedures and fail to address the developing market requirements. We believe our expertise in this area will differentiate BELEGA and lead to a larger portfolio of startups and investors.
Key competition in the crowdfunding sector
BELEGA tokens are called BLGA. BLGA is a token developed based on ERC-20. This token will be used on
the UK crowdfunding platform as follows: BLGA is a crowdfunding platform feature that supports both
projects and users.
1. As payment of service fee from the project - The project pays for the service for listing on the crowdfunding platform. The project can receive a substantial discount by paying this payment with BLGA tokens. Especially for cross-border projects, the project can benefit compared to existing payment methods.
2. Priority to user - If the users of the crowdfunding platform are BLGA holders, they will have the priority to invest in the projects listed on the platform. For example, when an attractive project is posted on a crowdfunding platform, BLGA holder users have the priority to invest a few days ahead of users who do not have a BLGA holder.
3. Future - Adoption of BLGA at partner companies
BLGA Token Offering
BELEGA is issuing its BLGA token as an Initial Token Offering with the aim of raising funds to allow the
company to meet its objectives.
After the raise, the BLGA Token will fuel the crowdfunding ecosystem as it may be used by its holder in exchange for BELEGA Services at discounted rates, and will provide participants exclusive project membership benefits.The complete token distribution plan is detailed below:
Use of Funds
Following the BLGA Token ICO, the funds are planned to
be deployed to build an SME crowdfunding solution and
execute a go-to-market plan. The funds would enable
BELEGA to launch services catering to underserved
SME founders and alternative investors, in order to
become a strong provider of working capital to SMEs.
This ICO is an opportunity to participate in an
organisation focused on a global FinTech business
model. Funds are planned to cover the costs associated
with developing an FCA regulated company, along with
all the technology requirements to make it operate. The
model to the right is a conceptual use of funds model
that graphically represents how use of funds could be
To bring the business to life, BELEGA will recruit a FinTech team to build and manage the company from
early stage seed funding, through to full execution of the crowdfunding model.
Executive Management Team
Upon completion of the ICO, funds are intended to be used to recruit key skills required to execute a
European crowdfunding business. Profiles include executive management, finance, product, commercial and
technical, with an emphasis on background that includes bank-grade security and data management.
What follows is an example of a potential implementation timeline to be developed following the ICO once
leadership and the management is engaged. This is an example of a working plan profile that BELEGA
intends to for the first 12–18 months of operations.
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