After announcing their intention to form a special purpose vehicle to bid for SA Express, the employees of the State-owned airline have formed a public interest company called Fly SAX that will use the first equity crowdfunding platform in South Africa to raise funds.

Uprise.Africa is a digital platform that offers retail investors the opportunity to strategically invest their capital into any business in South Africa, in exchange for equity shares in the businesses.

Through this platform, South African businesses have access to an alternative funding solution to raise the capital they need to rescue their businesses while gaining market validation and brand awareness.

Uprise.Africa will facilitate the R250-million capital raise for about 690 SA Express employees through its crowdfunding platform to salvage embattled SA Express and its assets from liquidation, which will require significant planning and consistent effort, as it is not just about raising capital, but also marketing a brand and building a following.

To build a successful crowdfunding campaign, Uprise.Africa says a business needs to either build a large base of raving fans or have large investors lined up who are ready to come on board.

Uprise.Africa says crowd investors are not all about presentations and spreadsheets, rather, they seek people and businesses who are aligned with their beliefs and values.

“The story of the business will be one of the most important aspects of equity crowdfunding, including enthusiasm and passion for the business. The story will inspire investors to be a part of the business and the business model and plan will ultimately convince them to invest.

“Investors want to see a path to potential success. This means a clear outline of the market and opportunities to grow. How businesses plan to use the raised finds will also inform investors of the value of their contribution. If a successful raise can lead to an initial public offering in the next 24 months, then communicate that to investors,” Uprise.Africa explains.

The company suggests getting an anchor investor to pledge funding before the campaign is live on the platform for a public offering. For a private raise, the project owners are required to sensitise their networks to give them the opportunity to invest in the campaign before it is exposed publicly.

The project owners are expected to seed the campaign to the tune of 20% to 30% of the target raise.

Once the crowdfunding campaign launches, it will be made active for a period of between 30 to 60 days to reach the “minimum tipping point”, which is the minimum amount of money necessary to enable the entrepreneur to implement their strategy.

If the tipping point is not reached after 60 days, the campaign is considered unsuccessful and all pledge money that was received by the platform will be refunded back to investors.

On the other hand, there is a possibility that the campaign will be oversubscribed when there is significant interest from potential investors. Project owners, therefore, need to decide the maximum amount of investments they will take and accordingly the maximum amount of equity that can be sold in the business.

Uprise.Africa has a joint venture in place with a stock exchange in South Africa, called ZARX, where project owners will have the opportunity to list shares on the exchange for secondary market trading, while retaining their status as a private company.

Crowd investors who participated in the equity crowdfunding campaign may be able to trade their crowd shares on the ZARX trading platform.