By NEIL HARTNELL
Tribune Business Editor
A Bahamas-based crowdfunding platform will showcase “four, maybe five” start-ups each seeking between $1m-$2m in financing when it launches by the second week in July, it was revealed yesterday.
D’Arcy Rahming J, chief technology officer for ArawakX, told Tribune Business that the initial group of entities seeking financing for their ventures will be “mostly locally-owned” start-ups in their early stages that are focused on the international markets and resident in The Bahamas.
“We are seeing interest from companies in other jurisdictions that want to come and operate out of here,” he added. “It’s at both ends. For us it’s about financial inclusion. We’re not just going to set up something one group can use. Financial inclusion means everybody.”
The first finance-needy ventures are said by ArawakX to be focused on industries such as health, technology, tourist attractions and agribusiness. The platform, which will also act as an exchange and secondary market in listing these businesses after equity shares are offered to investors, says it has obtained all necessary approvals and licensing from the Securities Commission of The Bahamas to launch.
Christina Rolle, the Securities Commission’s executive director, yesterday told Tribune Business that its new crowdfunding rules were expected to be implemented in time for ArawakX’s planned July start.
“We expect them to be done probably within another week or so,” she said. “They’re with the minster [Dr Hubert Minnis] for his ‘no objection’, and then they’ll be signed off and gazzetted.”
Crowdfunding involves financing a project or business venture by raising small amounts of money from a large number of people, typically via an Internet-based electronic platform such as ArawakX. It pools money from friends, family and investors.
Bahamian entrepreneurs and small and medium-sized enterprises are especially familiar with this, as it is typically the mechanism they have employed to raise start-up and expansion capital. Crowdfunders take equity stakes in the businesses they finance, appointing directors to the Board to safeguard their interests, rather than offering debt financing.
Besides crowdfunders earning a higher return on their investment, via dividends and share price appreciation if the business prospers, this financing method also enables start-ups and entrepreneurs to avoid having to take on a heavy debt financing burden than can often cause their idea to fail.
“The need for funding is great across all sectors because the banks are not lending, and that was the traditional source of funding,” Mr Rahming said yesterday. “A big catastrophic event like COVID-19 shakes everything up, but in shaking everything up it creates a ton of opportunities.
“That’s kind of why we need something like ArawakX. There are lots of good business people here that need funding to go after opportunities that are only there for fleeting moments. Technology has finally caught up with finance.”
Mr Rahming, in an earlier statement, added: “The primary purpose of ArawakX is to move Bahamians from consumers to owners. We have targeted early-stage international startups that are resident in the Bahamas. And our rules are written for Bahamians to participate through share ownership. ArawakX itself will be a publicly traded company so Bahamians of all financial levels will finally be able to own their own capital markets.
“We are changing the reality that Bahamians can only get jobs from these companies, but can actually own a portion of them. When the company grows so will the potential wealth of the owner investor. Additionally, with just our initial launch we will begin to see diversification in the economy and the potential creation of hundreds of jobs. Our regulations are very robust and provide strong protection for Bahamian owners”.
Mr Rahming said Bahamians could participate in investing with as little as $25, with ArawakX having obtained its licence after four years of scrutiny. D’Arcy Rahming, his father, will act as ArawakX’s chairman and chief executive.
To round out its executive management team, ArawakX has appointed Winston Rolle, former Chamber of Commerce president, as chief of equities, while Leroy Archer, ex-Commonwealth Brewery managing director will be chief of investor relations. Kenneth Donathon, former RND Holdings managing director, will be chief community officer.
“These successful and proven Bahamian executives should give confidence to the Bahamian and international community. Additionally, our rules are being designed and vetted by some of the world’s foremost authorities on exchanges. We have literally looked at dozens of exchange rule-sets and adopted the best ones to suit Bahamians so that they can grow their wealth,” said Mr Rahming.