A. Purpose
The fund aims at providing readily available funding to upcoming entrepreneurs at an affordable price.
B. Relevancy
With unemployment currently at its highest, most talented young people are unemployed. However most of such young people have amazing dreams full of potential but they have no funding to launch their projects. Banks are currently demanding collateral in the form of unmovable assets which most young people do not have at the moment. Besides that, most financial institutions have been treading carefully in terms of issuing out loans fearing the credit crunch web.
C. Ownership of the fund
The fund will be 100% owned by subscribers/contributors. Subscribers may choose to contribute either equal amounts or different amounts depending on their varying capacities. However, should subscribers choose to contribute uneven amounts, this will then be reflected in their voting powers; dividend distribution and profit share to retain equity fairness.
D. Management of the fund
The fund will be managed by the subscribers through a presiding committee which they would have elected. The purpose of the committee will be simply for administration purposes. However, all members will be involved in deciding the viability of a project submitted by a member applicant as explained in clause F(c).
E. Legal status of the fund
The legal status of the fund will be decided by the subscribers during their first meeting. Options available include company; a trust and partnership.
F. Operations of the fund
a. Subscriptions/Contributions
Subscribers will be invited to contribute the minimum of US$100.00 towards the fund. A minimum of us$ 100 will aid in the administration of the fund. For example if a minimum of us$5 is set it will take 1000 people to reach a capital target of us$5,000 making it difficult in terms of administration.
On subscribing, the subscriber will be receipted and registered in the fund register kept by the fund secretary who shall be elected, together with other committee members, by the subscribers.
b. Fund deposit
Contributed funds will be deposited with an investment company in an investment account. Why investment account and not bank account? Because currently banks are not giving any interest on deposits yet they are harvesting bank charges.
c. Projects funding
After pooling together their capital, subscribers will have the privilege of accessing capital to fund their projects. A subscriber will make an applicant to the committee which will then summon all other subscribers for an open forum appraisal of the proposed project. If the project is approved, the funds will then be released to the applicant on terms that shall be pre-agreed upon by all the subscribers, i.e. the tenure; interest or whether its equity etc.
d. Monthly reports
To foster transparency and accountability, the committee shall be required to give monthly feedback to subscribers about the status of the investment account and also the performance of the funded projects.
e. Return on investment
This shall be realized through dividends payouts based on the dividend policy which shall be agreed upon by all the subscribers.
f. Exit strategy
Should a subscriber decide to exit the fund, he/she shall give notice to other subscribers through the committee about the intention to exit leading to the refund of the contributed amount. However, subscribers will agree upon the notice period another subscriber should give before the release of the contributed funds.
No member shall however exit the fund with an outstanding loan amount.
G. Conclusion
This document is not a constitution or operations manual of the fund but a teaser to communicate the concept to potential subscribers. However, the relevant manuals and constitution shall be prepared by all the subscribers.
One way or the other we all have dreams; that thing deep down your heart
