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Got a few questions about how investing works on ArawakX? We’ve got you covered.
ArawakX is the largest equity crowdfunding platform in The Commonwealth of The Bahamas and the first mover in the industry.
According to the Securities Industry (Business Capital) Rules 2021, the government made it possible for every Bahamian resident to invest in startups, regardless of wealth or status. On ArawakX, anyone can invest in private businesses that offer shares of stock, debt, revenue share securities and more.
Entrepreneurs are no longer dependent on traditional sources of capital, such as private equity or venture capital firms, to bring their ideas to life; they just need other like-minded visionaries willing to take a chance on something novel.
Regulation Crowdfunding and Regulation A are the two exemptions for companies to raise capital on ArawakX from filing a prospectus, instead they must file an offering memorandum. In a Direct to Public Offering a company will still need to file a prospectus. The most significant differences are the amount of money you can raise, the speed at which you can launch, and the ongoing compliance required. More money asked, more required.
Under Regulation Crowdfunding you can raise up to $5M.
Under Reg A, you can raise up to $75M.
Under Direct to Public Offerings you can raise up to $300M.
The cost of launching a Regulation Crowdfunding campaign varies on a case-by-case basis, but generally speaking it costs between $4,000-$10,000 for the financial review and legal documentation required to launch a Reg CF campaign. If you are looking to raise more than $1.07M, you will need a full financial audit, which will bring an additional cost.
However, it is possible to launch at no cost upfront if you meet a few criteria: 1) the company is incorporated as a Corporation and 2) the maximum raise limit is set to $107,000 to start, which allows you to self-certify the company’s financials and save on the financial review cost.
Regulation A costs a good deal more, ranging anywhere between $50,000-$100,000. It takes longer to launch as well. Per a report from the SEC, it takes an average of 110 days to be qualified.
Given the cost and time of becoming qualified for a Regulation A offering, we recommend that companies begin with Regulation Crowdfunding if they are interested in raising capital through equity crowdfunding. If you want to learn more about Regulation A, click here, as the rest of this FAQ is devoted to Reg CF.
In terms of fees, ArawakX only makes money when you raise money. We charge 7%* of total capital raised for Regulation Crowdfunding offerings, an additional 2% of what you raise in equity, as well as $10K in deferred revenue that we collect when the offering is complete.
*The % charged may fluctuate between 7-12% based on the method of investment and fees associated.
Generally, companies finish onboarding in 3-6 months. We’re with you every step of the way and are on your timeline. Onboarding can be done more quickly if you’re on top of things and responsive to our team.
Companies must meet a basic set of criteria (such as being a Bahamian-based operating company, the founder is at least 18 years old, etc), and there is a list of prohibited types of companies that we do not work with at ArawakX.
We also analyze every company that comes to ArawakX’s platform in order to determine whether they are the right fit for our platform and audience as well as for equity crowdfunding in general. You can read more about ArawakX’s prohibited types of companies and eligibility requirements here.
To schedule a meeting with our Equity team contact us at email@3.223.142.139
Story: Tell your story in your own words. Build and design your campaign page to attract investors. Our creative team will help you!
Set your own terms: What’s your valuation? What kind of security do you want to sell and how much of it? It’s all up to you.
Legal: We request corporate documents like Articles of Incorporation and Board Resolutions to approve your fundraise.
Financial: You have a few options:
Save on upfront cost and self-certify your financials.
Use one of our low-cost, preferred CPA vendors and get a 2-year independent financial review done in order to raise up to $1.07M from the start.
Get a full financial audit in order to raise up to $5M from the start.
Don’t worry — if you start with self-certified financials, you can always commission the financial review during your offering in order to raise more than 107K. Similarly, if you start with a financial review, you can commission a financial audit during your offering in order to raise more than $1.07M.
It’s impossible to predict which companies will resonate with ArawakX’s community of investors and raise significant amounts of capital. Companies from all industries have successfully raised capital everyday.
That being said, there are some trends we have identified among successful raises. Learn more about those trends here
At ArawakX, we (Platform) and you, (the entrepreneur), work together to come up with the best terms according to what the market is asking for. Our equities and compliance team will then review your proposed offering terms, as well as all the supporting documentation.
ArawakX has over many prospective investors in our community, and our community will account 70% of what you raise over the course of your campaign, on average. Throughout your raise, we will offer periodic email promotions to our community as you reach new funding milestones.
We will also refer you to a dedicated fundraising strategist that will work closely with you for the duration of your campaign. Your fundraising strategist will help you create a marketing strategy to your audience and customers as well as run digital advertising campaigns.
For your raise, you will need to disclose key information about your company and the offering, such as the background on the founders, the company’s business model, the price of shares, the goal amount the company seeks to raise, other basic financial information about the company, and risks associated with the investment opportunity. This information will be available to the public. To learn more about the disclosures of Regulation Crowdfunding, click here.
On average campaigns last 60-90 days. As soon as the maximum target raise has been reached the campaign closes and funds are distributed according to the offering memorandum.
If you have a successful raise, your cap table may have thousands of new investors on it, but we don’t believe that’s a bad thing. Through our custody solution those new shareholders are treated as a single holder of record and will also occupy a single line on your cap table. Learn more here.
In order to collect capital on ArawakX you must have met the minimum raise. Those funds minus fees can be disburse according to the disbursement schedule.
We require that companies set a minimum funding goal for their campaign. If you raise less than your minimum goal all funds will be returned to investors.
We require that companies set a minimum funding goal for their campaign. If you raise less than your minimum goal all funds will be returned to investors.
After your campaign ends, ArawakX will file the necessary form with the SCB, disclosing the amount raised during your campaign. The final investors will receive an email with their countersigned subscription agreement, which will serve as their proof of purchase.
ArawakX Secondary (“Secondary”) is our investor trading platform. ArawakX Secondary is a Marketplace registered with the SCB and operated by Mdollaz Ltd.
In the beginning, ArawakX Secondary will only be available to companies that have previously raised funding on ArawakX. Companies have to sign a quotation agreement with ArawakX to allow their investors to trade on ArawakX Secondary.
In the near future, it is possible that companies that have raised capital via Regulation Crowdfunding and Regulation A+ on other equity crowdfunding platforms trade on Secondary. We may even introduce other assets to Secondary besides shares in companies.
Local residents over 15 years old can open an Investment Account. International accredited investors only.
Secondary allows investors to trade with each other in a peer-to-peer marketplace. Sellers can post offers to sell a specific number of shares by setting a minimum price. Buyers can post offers to buy a specific number of shares by setting maximum price. If a match is made, then the trade is executed. See below for more details.
For Companies: The first year of being listed on Secondary will be free. Subsequent years there will be a listing cost for the platform. Additionally, companies must be current with their fees for ArawakX.
For Investors: Opening an account to trade on Secondary is free! Buying shares on Secondary is free! Selling shares on Secondary will incur a 0.5% transaction fee.
You can access ArawakX Secondary at https://secondary.ArawakX.com/. You will need to open an Investment Account if you have not already in order to access the platform.
Investors can place orders on ArawakX Secondary during market hours. However, each stock trading on ArawakX Secondary will have individual market hours. Market hours are the times at which our matching engine will match orders with each other. The market hours are Wednesdays between 11 a.m. and 1 p.m. Eastern Standard Time.
Users can place orders during market hours, and clearing (matching orders) will only occur during market hours.
Submitting a buy or a sell order is really straightforward! Head to your investment account at secondary.ArawakX.com, and select the “Trade” button in the top right corner. To the right of the page, you’ll see the trade widget. Select whether you want to buy or sell.
If you’re buying, enter the number of shares you’d like to purchase, and the maximum price you’re willing to pay.
If you’re selling, enter the number of shares you’d like to sell, and the minimum price you’re willing to accept for the shares.
To view the current buy/sell orders on the market, you can scroll down to the “Order Book” which will show you the current buy/sell orders. Enter a buy order above the lowest sell order, or a sell order below the lowest buy order to increase your chances of the trade being executed.
Trade orders will only be executed during market hours for the security you wish to trade. For example, the market hours for ArawakX shares are Wednesday, 11 am-1pm ET. Trade orders expire after each day’s market hours. If your order is not cleared in that window, then you will need to resubmit your trade order again. If you have trouble finding a buyer or seller for your order, try adjusting your asking price!
We were able to fill part of your order at your desired price, but there wasn’t enough demand to meet your entire offer before your order expired. Trade orders are filled based on a few criteria. In order of priority, those are the asking price, the time the order was submitted, and then finally the size of the order. Try submitting the rest of your order another day or adjusting your asking price to fill the rest of your original order.
You can cancel your order at any time before the order is matched by Secondary. After an order is matched, there is no possibility of a cancellation or a refund.
Note: if your order is partially filled, you will be unable to cancel the rest of our order. Your order will remain open until it expires at the end of the day. We are working to provide this ability in future updates. Thank you for your patience.
There are no market makers on ArawakX Secondary. A market maker is a participant or a company that actively buys and sells securities (in a National Market System) on both sides of the market in order to provide liquidity while profiting from the difference in the buy (“bid”) and sell (“ask”) spread.
You can reach us anytime at contact@ArawakX.com.
A company which intends to apply to list its securities on the marketplace will be subject to certain requirements which it may or may not be able to satisfy in a timely manner. Even if a company is qualified to list its securities on the market, there is no guarantee that a demand for these securities will exist. Even if a company does meet the requirements for listing its securities, we do not know the extent to which investor interest will lead to the development and maintenance of a liquid trading market. You should assume that you may not be able to liquidate your investment for some time or be able to pledge these shares as collateral.
A Politically Exposed Person (PEP) is any person who has held a role as a head of government, a senior official in the executive, legislative, administrative, military or judicial branches of a government (whether elected or not), a senior official of a major political party, a senior executive of a government-owned corporation and a senior manager of an international organization (e.g., director, deputy director or member of the board or equivalent function in government). A PEP also includes immediate family members and close associates of a PEP.