1. Overview

1.1 What is an emerging market?

The term "emerging market" is loosely defined, but the general consensus is that emerging markets are fast-growing economies that are progressing towards higher income levels and standards of living. They already show some liquidity in local debt and equity markets, and they have usually embarked on economic development and reform programs.
The MSCI index currently classifies 23 countries as emerging markets, with a full list here

1.2 What is a frontier market?

Frontier markets are countries with investable stock markets that are less established than those in emerging markets. They are also known as "pre-emerging markets". Investors in frontier markets can face higher risks compared to emerging markets.

Frontier market investments can have a low correlation to developed markets, and thus can provide additional diversification to an equity portfolio.

The MSCI index currently classifies 33 countries as frontier markets, with a full list here.

1.3 Is Emerging Crowd regulated by the FCA?

In respect of its regulated activities, Emerging Crowd Limited is an appointed representative of Share In Limited, which is authorised and regulated by the Financial Conduct Authority (No. 603332).      

1.4 Is it safe to invest through Emerging Crowd?

Yes. Investors can be assured that their funds and securities are held in segregated client accounts by FCA authorised institutions.

All payments and financial transactions that you make through the Platform are processed by Global Currency Exchange Network Ltd (“GCEN”), which is an Authorised Payment Institution authorised and regulated by the FCA under the Payment Services Regulations 2009 (No. 504346) and is a Money Services Business Regulated by HM Revenue & Customs (“HMRC”) under the Anti Money Laundering Regulations 2007 (No. 2137189). All funds you invest through the Platform and any cash dividends, interest or principal payments, or other cash distributions due to you in relation to any Securities will be held on your behalf in a segregated client account administered by Global Custodial Services Ltd (“GCS”), which is authorised and regulated by the FCA (No. 595875). In this Agreement, GCEN and GCS are referred to collectively as the “Custodian,” as the context requires.

All Securities issued in any Campaigns will be held in a segregated client account by Reyker Securities plc, as nominee for the benefit of the investors in that Campaign (the “Nominee”). The Nominee is authorised and regulated by the FCA (No. 115308) and is a member of the London Stock Exchange No. 730.

Please visit our Privacy Policy for an explanation of your data protection rights when you use our platform.      

1.5 Which internet browsers are supported by the Emerging Crowd website?

We have endeavoured to make sure that the Emerging Crowd website looks great and works well on as many browsers as possible. Those that the website has been specifically designed for are listed below so we do advise using one of these whenever possible. If you use a browser which is not listed below the website may unfortunately not work as well as it was designed to:
  • Firefox 31 ESR
  • Firefox 37
  • Google Chrome 41
  • Google Chrome 42
  • Internet Explorer 9
  • Internet Explorer 10
  • Internet Explorer 11
  • Safari 8

1.6 What is your complaints procedure?

In the unlikely event that you are not completely happy with the service that we have provided, please email us at help@emergingcrowd.com. If your complaint is not satisfactorily resolved, then you may have the right to refer your complaint directly to the Financial Ombudsman Service, whose details are available at www.financial-ombudsman.org.uk, provided that you do so within 6 months of the date of our final response. 

2. Investor Eligibility

2.1 Who can view the fundraising campaigns on Emerging Crowd?

Anyone can access the website and see basic information about the platform, but only Members of Emerging Crowd can view details on investments. To become a Member, simply click the "Sign Up" button on the wesbite. Signing up is absolutely free and only takes a few minutes.

2.2 Who can invest on Emerging Crowd?

To invest on Emerging Crowd you must become an Accredited Member by updating your profile or clicking “Invest”. You will need to provide evidence of your identity so that we can carry out our know-your-client (KYC) and anti-money-laundering (AML) checks. Accredition is absolutely free, and if you are a resident in the European Economic Area (EEA) then you are likely to be able to complete the process in a few minutes. If you are not resident in the EEA, please contact us at help@emergingcrowd.com to see if you are eligible to invest.       

3. Investing

3.1 Do you charge investors to invest on the Platform?

No. We do not charge any fees to invest on the Platform.

3.2 What is the process for making an investment?

To invest on Emerging Crowd you must become an Accredited Member by updating your profile or clicking “Invest”. To become an Accredited Member, you will need to provide evidence of your identity so that we can carry out our know-your-client (KYC) and anti-money-laundering (AML) checks.

Once you are an Accredited Member and you have found a campaign you would like to invest in, simply click “Invest” and enter the amount of money you wish to invest. After making this commitment you will have a 14 day cooling-off period during which you are able to cancel your investment by following the instructions on the website.

3.3 How long will the campaign last?

A campaign will normally last approximately 6 weeks. If it is underfunded at the end of the campaign then Emerging Crowd and the company may decide to extend the campaign.

3.4 What happens at the end of the campaign?

Once the target amount, or the campaign end-date, is reached, the campaign ends and no further commitments are accepted.

The paperwork and legal documentation will then be completed and Emerging Crowd will instruct the appointed custodian to transfer the money to the company’s bank account, and the shareholder or debt certificates will be issued to you.

3.5 What happens if the target amount is not reached?

In addition to extending the campaign there are two possible outcomes if the target amount is not reached during the campaign period. Either the issuer will accept the amount raised up to that point, with the investors’ permission, or the campaign will be cancelled and all funds committed to that campaign will be refunded to your ‘Wallet’.

3.6 What if I change my mind?

You will have 14 clear days after you have made your investment to withdraw it. To do this please follow the instructions online.

3.7 How many campaigns can I invest in?

There is no limit to the number of campaigns you can invest in. In order to remain compliant with the FCA’s restrictions ‘Everyday Investors’ must not invest more than 10% of their investable assets. There are zero fees associated with investing across multiple campaigns and we encourage you to diversify your investments.

3.8 What is the minimum and maximum amount I can invest?

The minimum amount per campaign is £500. There is no upper limit.

3.9 What types of investments can I make?

Depending on the campaign, you can either buy shares in a company (an Equity Offering), or you can lend that money to a company by buying bonds (a Debt Offering) issued by the company.

3.10 What are the risks of investing?

Please see the Risks Section on the Platform for a summary of the key risks involved in investing on the Platform.

The Invitation Document for each campaign will set out key risks in relation to that particular investment.

The risks presented on the Platform or in the Invitation Document are not exhaustive and are not intended to be a complete explanation of the risks involved. You must be sure to understand all of the risks involved in making any investment before you decide to invest.

3.11 Do I receive confirmation of my investment?

When you invest we are legally required under the Membership Agreement to arrange payment of the funds to the issuer. The issuer is also under legal obligation to issue equity or debt certificates to the Nomine. You will be able to directly view your holdings through the Platform.

4. Payment

4.1 What payment methods can I use?

When you make an investment you will be given three options to pay, as described on the platform.

Debit Card: You can make a payment via all major debit cards from any UK bank account. We use Stripe as our payment processor. When you make an investment, your card will be charged with that amount and the funds transferred to the custodian’s account.

Bank Transfer: If you choose to pay by bank transfer, you will need to contact your bank and transfer the investment funds to the custodian by following the instructions on the Platform.

Wallet: You are able to use any Available Balance available in your ‘Wallet’ to make an investment.

4.2 Does Emerging Crowd hold investor’s money or assets?

Emerging Crowd does not hold client money or assets.

All money and assets are held separately and securely by independently FCA-authorised custodians. Money is held by Global Custodial Services (FCA Registration Number 595875). Whereas client assets are held by the Nominee Reyker Trust & Depositary Services Limited, a public limited company incorporated in England and Wales under No. 8835247 whose registered office is at 17 Moorgate London EC2R 6AR. When a campaign is successful, Emerging Crowd instructs GCS to transfer the money to the company and the shareholder or debt certificates are transferred to the Reyker. All of this information is updated in the investors’ portfolios.

4.3 What is the ‘Wallet’ in my user account?

As an Accredited Member your user account will feature an online Wallet which will reflect; any commitments you have made to a campaign; any funds in excess of your commitments held by the custodian on your behalf; and any transactions you have previously made on the Platform.

5. Our Screening Process and Due Diligence

5.1 What are your country selection criteria?

We look at countries based on the following criteria, amongst others:
  • Economic and political stability
  • A reliable investor protection framework
  • A high degree of legal and regulatory certainty
We automatically exclude some countries on the basis of risk, for example those being monitored by the Financial Action Task Force (FATF), which can be found here.

5.2 What sectors does Emerging Crowd focus on?

Emerging Crowd will consider a wide range of sectors, although typically we look at consumer-focused businesses that we believe our investor base will relate to. We do not currently support extractive industries, such as mining or oil & gas.

5.3 What are your company selection criteria?

We look for companies that can demonstrate:
  • Strong financial and operational track record
  • Experienced local management and adherence to good corporate governance practices
  • Sound strategic and financial planning and transparent financial reporting
  • Strong growth prospects based on realistic assumptions
  • Realistic exit strategy

5.4 What is your due diligence process?

Emerging Crowd offers a new approach to crowdfunding.

We’re very selective – for every company you see on Emerging Crowd, many more have been rejected. Our team of analysts works with independent legal experts to carry out due diligence on every company and the people behind it.
  • Background checks
  • Fact-checking and documentation review
  • Financial analysis and modelling
  • Legal and compliance review
We do our homework, and we’ll only show you the companies that have met our due diligence standards. Not all platforms can say that.

5.5 What if I want to ask my own questions?

As a Member of Emerging Crowd, you can log in to your user account and chat directly with the Company using the “Q&A” feature of the platform. You can ask specific questions and request relevant documents before investing.

5.6 How will the company use the money I invest?

The company will tell you up front how it plans to use the money you invest. This is referred to as the “Use of Proceeds” and is spelled out clearly in the Invitation Document available on the platform. Your money will be paid via Global Custodial Services into the company’s corporate bank account – not to the founders or managers. And you will receive quarterly management updates with key financial indicators so that you can keep track of the company’s financial performance.

6. Managing Your Portfolio

6.1 How do I manage all of my investments?

You can manage your investments easily through the Portfolio section on your account with Emerging Crowd. It is easy to keep track of your different investments, interest payments received, investments and participate in corporate actions. The Portfolio section also provides you with updates from the companies you have invested in or followed.

6.2 Can I sell my shares to someone else?

Companies raising funds on Emerging Crowd are unlisted so there will be no secondary trading market in which to sell your shares. This means that even if your investment increases in value, it is unlikely that you will be able to sell your shares to realise your investment until the company has a liquidity event such as floating on a stock exchange or is bought by another company.

6.3 Will I receive updates from the company after I invest?

Yes. Companies are required to provide quarterly management updates with key financial indicators and yearly financial statements and they are encouraged to use the Platform to keep you informed.

7. Company Eligibility

7.1 Does Emerging Crowd raise capital for start-ups?

Emerging Crowd focuses on Small and Medium-sized Enterprises (SMEs) that can provide an operational history and a proven business model. We do also love to hear from exceptional start-ups with outstanding management teams. Please get in touch if you fall into any of these categories.

7.2 Is there a minimum or maximum amount I can raise through Emerging Crowd?

We typically work with companies that are looking to raise at least £500,000. The maximum amount a company can raise is the sterling equivalent of €5,000,000.

7.3 How do I apply to raise money for my business?

Please email info@emergingcrowd.com with details of your business and the amount you are looking to raise. One of our analysts will then be in contact to discuss matters further.

7.4 Can anyone invest in my business?

Only an Accredited Member of Emerging Crowd can invest in a campaign. Please see question 3.2.

8. Fundraising

8.1 What type of capital can I raise for my business on Emerging Crowd?

Depending on your situation, you can raise capital on Emerging Crowd by issuing shares to investors (an Equity Offering), or you can borrow that money by issuing bonds (a Debt Offering). Do get in touch so that we can explore these options with you.

8.2 How long does the fundraising process take?

The length of time required to raise funds through the platform will be dependent on the business and its investment readiness. Typically our pre-screening and due diligence process takes between 4-6 weeks, and the online campaign will run for approximately 6 weeks. You should allow a further 15 days for the preparation of documents and payment of the money.

8.3 What documents do I have to prepare for my campaign?

You will need to prepare an investor presentation called an Invitation Document. This provides an overview of the business, financial statements and forecasts and other information relevant to the campaign. Your campaign will also require a short marketing video, which will add vibrancy to your campaign.

8.4 What happens at the end of the campaign?

Once the target amount, or the campaign end-date, is reached, the campaign ends and no further commitments are accepted.

The paperwork and legal documentation will then be completed and Emerging Crowd will instruct the appointed custodian to transfer the money to your company’s bank account, and the shareholder or debt certificates will be issued to the investors.

8.5 What happens if the target amount is not reached?

In addition to extending the campaign, there are two possible outcomes if the target amount is not reached during the campaign period. Either you can accept the amount raised up to that point, with the investors’ permission, or the campaign will be cancelled and all funds committed to that campaign will be refunded to the investors’ ‘Wallet’.

8.6 How does my business receive the amounts raised?

On the closing date, the proceeds will be paid to the company by wire transfer into the pre-designated account.

8.7 Do companies receive money in Pounds Sterling or local currency?

The company can elect to receive funds in either their local currency or a sterling denominated account. We have a close relationship with an FX provider to ensure you receive a highly competitive rate.

8.8 What fees will you charge me for raising capital through Emerging Crowd?

We charge companies an admission fee when their campaign is launched and we charge a success fee if your campaign is successful. The success fee will be a percentage of the amount raised and will be payable on the closing date.

9. Nominee Structure

9.1 How are my Securities held?

Your securities are held by our custodian partner Reyker Securities plc in one of their non-trading nominee companies. Reyker Securities plc is a public limited company incorporated in England and Wales under No. 1747595 whose registered office is at 17 Moorgate London EC2R 6AR, they are authorised and regulated by the Financial Conduct Authority No. 115308. 

9.2 Do investors hold shares and bonds directly in the issuing company?

The individual investors are purchasing shares or debt directly in the issuing company. Our custodian partner Reyker Securities plc will hold the assets in safe custody and will register ownership of the assets with one of their non-trading nominee companies for the benefit of those individual investors.  Even though the nominee is the legal holder, the investors are the beneficial owners, and they are entitled to all the economic rights, including any dividends or coupon payments and the full upside on exit, as well as any voting rights and tax benefits such as EIS (if applicable). 

9.3 Can the investors elect to hold shares and bond documents directly in the issuing company?

No, the Securities are held by the Nominee. 

9.4 What is the benefit of the nominee structure to investors?

The nominee structure allows all level of investors to not have to worry about day-to-day matters such as tracking corporate events, issuing consents, and attending meetings. That said, as shareholders they are of course entitled to do all of those things if they wish.

In terms of investor protection, it is also vital that the investment is governed by the same standard legal documentation, and that all investors are treated equally at the time of investment and at the time of an eventual exit.

9.5 What is the benefit of the nominee structure to the investee company?

Unlike other platforms, where investee companies are left to “fend for themselves,” we have designed Emerging Crowd for companies to build a sustainable and cost-effective relationship with shareholders.

The platform allows for future investor relations to be simplified, as corporate announcements and corporate actions (such as voting) are conducted through the platform. Without the nominee, the company would have to bear the cost and administrative burden of communicating individually with each of the shareholders and tracking their individual votes.  With Emerging Crowd, the nominee acts as a conduit for those actions and relays the instructions of the individual shareholders.

When it comes to another round of financing or an eventual exit, the nominee structure is believed to be much more attractive, because shareholder communications and consents are more easily obtained.  Some institutions can be reluctant to invest in companies with a disjointed shareholder structure because of the potential cost and administrative burden - the nominee structure keeps the shareholder register streamlined.