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The 100K Equity Challenge - THUDmaseru

This challenge is one of THUD’s endeavours to invest in the growth and the development of local businesses and to contribute to building a good ecosystem to foster entrepreneurship in the country.

THUD has used the crowdfunding model to award monthly THUD winners with prizes. However, this model was not sustainable as entrepreneurs were not always able to raise an amount of money significant enough to grow their businesses, furthermore, there wasn’t anything tangible that the funders were getting for their investment. Therefore, in a bid to improve the process, 

THUDmaseru came up with the equity investment challenge which is funded by THUD.

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What does equity financing entail?

In equity financing, an investor gives a business owner money in exchange for a share of ownership in the business. In order for an investor to decide whether or not the business is worth investing in, the business owner has to put a business case (business plan) forward that shows the future potential of the business to be profitable.

This should be able to show the investor that once the business starts being profitable, the investor will get a dividend payment for their share of the profit, or the investor can sell the shares to the business owner or to another person for a higher value than he/she bought them. This is how the investor makes money from the transaction (the investor’s return on investment).

The business owner benefits from an equity investment in the following ways:

-They are able to raise funding that does not require immediate repayment or collateral/security.

-The business is able to leverage the skills, know-how, and networks that the equity investor brings.

-Since the equity investor’s ability to get a return from the investment depends on the business’s ability to be profitable, the equity investor is more likely to help the business succeed. 

-This is unlike a bank, which will still require their return (interest) whether the business becomes successful or not.

The 100K Equity Challenge - THUDmaseru

This challenge is one of THUD’s endeavours to invest in the growth and the development of local businesses and to contribute to building a good ecosystem to foster entrepreneurship in the country.

THUD has used the crowdfunding model to award monthly THUD winners with prizes. However, this model was not sustainable as entrepreneurs were not always able to raise an amount of money significant enough to grow their businesses, furthermore, there wasn’t anything tangible that the funders were getting for their investment. Therefore, in a bid to improve the process, 

THUDmaseru came up with the equity investment challenge which is funded by THUD.

What does equity financing entail?

In equity financing, an investor gives a business owner money in exchange for a share of ownership in the business. In order for an investor to decide whether or not the business is worth investing in, the business owner has to put a business case (business plan) forward that shows the future potential of the business to be profitable.

This should be able to show the investor that once the business starts being profitable, the investor will get a dividend payment for their share of the profit, or the investor can sell the shares to the business owner or to another person for a higher value than he/she bought them. This is how the investor makes money from the transaction (the investor’s return on investment).

The business owner benefits from an equity investment in the following ways:

-They are able to raise funding that does not require immediate repayment or collateral/security.

-The business is able to leverage the skills, know-how, and networks that the equity investor brings.

-Since the equity investor’s ability to get a return from the investment depends on the business’s ability to be profitable, the equity investor is more likely to help the business succeed. 

-This is unlike a bank, which will still require their return (interest) whether the business becomes successful or not.

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