INDIVIDUAL ASSIGNMENT REPORT

TITLE: CROWDFUNDING INVESTMENT

NAME OF COMPANY:
Musang Valley Agro Sdn Bhd | MAEKO Home Composting | FAR Capital Sdn Bhd

PIF 2013: ISLAMIC CAPITAL MARKET

AF 101: DIPLOMA IN ISLAMIC BANKING AND FINANCE

PREPARED BY:

NAME MATRIC NUMBER SECTION

NOR KHAIRIYATUL WAFA’ BINTI ROSDI
KBJ212510900 1

PREPARED FOR:
SIR WAN HAREEZUAN BIN WAN AB RAHIM
 TABLE OF CONTENTS

TITLE PAGE
1.0 ACKNOWLEDGEMENT 1
2.0 INTRODUCTION ABOUT CROWDFUNDING

2.1 DEFINITION 2
2.2 PROCESS CROWDFUNDING 3
2.3 INVESTOR 4
2.4 ISSUER 4
2.5 ADVANTAGES AND DISADVANTAGES 5-6
2.6 RISK IN CROWDFUNDING 7
2.7 DIFFERENT BETWEEN ISLAMIC AND CONVENTIONAL 8
CROWDFUNDING

3.0 ORGANIZATION INFORMATION 9-14

4.0 DETAILS ABOUT THE FUND RAISE 15

-FUNDING AMOUNT
-FUNDING PERIOD
-TYPES OF SHARES
-NUMBER OF SHARES
-PRICE PER SHARE
-ADDITIONAL REWARDS

5.0 CONCLUSION 16
6.0 REFERENCES 17
1.0 ACKNOWLEDGEMENT

ِ‫الر ِحي ِْم‬

َّ ‫ن‬ِِ ‫الر ْح َم‬
َّ ‫للا‬
ِِ ‫ــــــــــــــــــم‬
ِِ ‫س‬
ْ ‫ِب‬

Alhamdulillah. First of all, I am really grateful because i finally managed to complete

the Individual Assignment Report of Islamic Capital Market (PIF 2013) with great enthusiasm
and determination within the time given by lecturer, Sir Wan Hareezuan Bin Wan Ab Rahim.

Therefore, I would like to express my gratitude to all those who have guided me in
making this assignment. I also sincerely thank you to lecturer, Sir Wan Hareezuan Bin Wan
Ab Rahim for guidance and encouragement in finishing this assignment and also for teaching
me in this course.

Initially, I as well as want to thanks to my parents who always prayed well for me and
giving their time to hear my problem all this time. I hope my assignment is complete and will
be receive. I had used my effort and acknowledgement to search information and ideas.
Hoped my effort was worth it.

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2.0 INTRODUCTION ABOUT CROWDFUNDING

2.1 DEFINITION
Crowdfunding is the use of small amounts of capital from a large number of individuals to
finance a new business venture. Crowdfunding makes use of the easy accessibility of vast
networks of people through social media and crowdfunding websites to bring investors and
entrepreneurs together, with the potential to increase entrepreneurship by expanding the pool
of investors beyond the traditional circle of owners, relatives, and venture capitalists.

In simple words, crowdfunding is a way to raise funds for a specific cause or project
by asking a large number of people to donate money, usually in small amounts, and usually
during a relatively short period of time, such as a few months. There are four main types of
crowdfunding, including donation, reward, equity, and debt crowdfunding options.

For equity crowdfunding, this form of crowdfunding lets you raise funds from the public
in exchange for unlisted shares (equity) in the business. Equity crowdfunding is better for
raising larger amounts than you could get through rewards-based crowdfunding. Because of
the large amounts at stake, equity crowdfunding platforms which often called portals are
government regulated. There are rules around how much can be raised, how much can be
invested, and how often you use them.

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2.2 PROCESS OF CROWDFUNDING
The crowdfunding process is carried out on specialized online platforms such as Ata-Plus,
iPivot and pitchIN. These are process of crowdfunding:

1. Develop ideas for project. Prove the need and make some research first. Define
your aims and objectives as well as your timescale.

2. Decide which type of crowdfunding you want to invest in: equity-based, loan-based,
debt-based, rewards-based or donation-based for charities and good causes.

3. Choose the right platform: invest in a business or product. Use the search function
on crowdfunding platforms to find promising projects.

4. Read the project overview in detail. Then do your own extra homework to see if the
venture has merit. Make sure you understand all the project timelines, returns and
risks.

5. If the project doesn’t reach total at this stage, money might be returned to donors.

6. If the idea still appeals, put money into the project, track its progress and keep your
fingers crossed.

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2.3 INVESTOR
An investor is an individual or entity that utilizes its capital or the capital of others with the goal
of receiving a return. Investors commit their capital to a wide variety of investment vehicles,
such as stocks, bonds, real estate, mutual funds, hedge funds, businesses, and commodities.

The main goal of any investor is to minimize risk and maximize return. It is in contrast
with a speculator who is willing to invest in a risky asset with the hopes of getting a higher
profit. Investors rely on different financial instruments to earn a rate of return and accomplish
important financial objectives. Investors typically generate returns by deploying capital as
either equity or debt investments. Investors build portfolios either with an active orientation
that tries to beat the benchmark index or a passive strategy that attempts to track an index.

Thus, investors are not a uniform bunch. They have varying risk tolerances, capital,
styles, preferences, and time frames. For instance, some investors may prefer very low-risk
investments that will lead to conservative gains.

2.4 ISSUER

Crowdfunding issuer means a company that seeks to raise capital as a co-issuer with a
crowdfunding vehicle in an offering that complies with all of the requirements. Issuer must
conduct offering exclusively through one intermediary with all transactions occurring in an
“online-only” format.

They must also provide financial statements prepared in accordance with Generally
Accepted Accounting Principles (GAAP). Next, provide a narrative discussion of the
company’s financial condition, including discussion of liquidity, capital resources and historical
outcomes. Lastly, regular updates regarding the issuer’s progress towards meeting the
offering amount should be provided.

An issuer may only raise collectively, a maximum amount of RM10 million through ECF
platforms in its lifetime. The issuer is only allowed to keep the funds raised within the targeted
range of fund-raising amount (minimum and maximum amount).

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2.5 ADVANTAGES AND DISADVANTAGES

ADVANTAGES

1- Simple, relatively fast and cheap

It’s simple, cheap and fast way to raise money for your business or project. Financing costs of
crowdfunding are usually between five and nine per cent, where other financing options quickly
add ten per cent or more.

2- Responsible business

Crowdfunding lends itself exceptionally well as a financing method in the context of corporate
social responsibility. Borrowing public money fits well with a business concept or idea that
focuses on sustainability or invests in the community.

3- New financing method

Collecting donations through crowdfunding platforms is a relatively new financing method. A

significant advantage of this is the flexibility with which credit can be collected.

4- Less regulation

Due to its relatively short existence, peer-to-peer funding is surrounded by less strict legislation
and regulations. This results in a means of financing with a relatively low entry threshold and
a flexible character.

5- Less strict conditions

The conditions for applying for crowdfunding are a lot more flexible than those of standard
financing methods (such as; for example, a business loan from the bank). For instance, fewer
securities and guarantees are required from the project and the company.

6- Investors boost sales

Since the lenders making donations to crowdfund projects are private investors, it is possible
that a large number will also want to be customers of the company and thus increase the
turnover additional stimulation. This is in contrast to regular bank financing, which never
generates additional revenue through the same bank.

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 DISADVANTAGES

1- No repayment of investments

There is a risk that a borrower will ultimately not be able to meet the repayment obligations or
be declared bankrupt. An investment in a wrong product will, therefore, possibly result in loss.
This may work to the detriment of lenders and platforms.

2- Financing target must be achieved

A major disadvantage of crowdfunding via crowdfunding platforms is that if you fail to collect
the budget you have set in time, your project will be removed from the platform, and you will
have to start again from scratch.

3- Fraud by a crowdfunding platform

Due to the relatively new and growing market, not many systems have yet been designed to
prevent or compensate for such fraud.

4- Fraud by borrowers

It is possible that borrowers set up a fraudulent campaign. This is because there is less strict
control than with other financing methods.

5- Dependent on ICT structure

Collecting donations through crowdfunding is mainly done online. Platforms, lenders and
borrowers are therefore highly dependent on the internet and the quality of the ICT
infrastructure. Problems with this infrastructure and malfunctioning of a platform can therefore
lead to major disadvantages for both the platform and the investors and entrepreneurs.

6- Old laws may be obstacles

The legal system is slow. Due to the relatively short period in which crowdfunding has
developed into a fully-fledged financing method, the current legal framework has not yet had
enough time to adapt to these new circumstances. This means that the rules for certain
situations are outdated and maybe an obstacle.

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2.6 RISK IN CROWDFUNDING

1- Risk of loss

All investments come with the risk of loss. However, crowdfunding investments may be riskier
than traditional investments. This is because crowdfunding investments are often made in
early-stage companies with little history or track record.

2- Risk of liquidity

This is the risk that your investment will not be able to be sold quickly at a reasonable price.
Crowdfunded investments are often illiquid and may not be able to be sold for years.

3- Risk of potential for fraud

Crowdfunding platforms are not regulated by the Securities and Exchange Commission
(SEC). This means that there is a greater potential for fraud.

4- Default risk

A company or an individual may be unable to make good on their debt obligations. It is virtually
an integral component of all credit extensions as higher the risk, higher the returns.

5- Interest rate risk

Either equity or debt-based crowdfunding the risks are the same with minimal differentiation
based on the market, for instance, investment risks would be the same if it was in the real
estate sector the project goes under, an investor will lose money, the risk of default by real
estate developers is higher for crowdfunding compared to direct real estate funding and then
the liquidity risk with the absence of secondary market.

6- The non-accredited investor may lose money

Only accredited investors are allowed to invest in certain types of crowdfunding campaigns.
These campaigns are typically only available to wealthy individuals who can afford to lose
money. Those not accredited may lose all of their investments if the company fails.

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2.7 DIFFERENT BETWEEN ISLAMIC AND CONVENTIONAL CROWDFUNDING

The primary point that differentiates between the conventional crowdfunding with the Islamic
crowdfunding would be via the implementation and the application of Islamic principles in the
latter. For Islamic crowdfunding, the financing is obtained from a collective effort of friends,
family, customers, and individual investors or donors.

As you can see from the table below, Islamic crowdfunding platform has specific
contract for each type of crowdfunding and those contracts are based on shariah law that
parallel with Quran and Sunnah.

ISLAMIC CROWDFUNDING Type Of CONVENTIONAL CROWDFUNDING

Crowdfunding

May utilize Bay as-Salam, which

provides specific rewards, services
or gifts to investors who fund the Reward-based Materialism
projects or businesses via
crowdfunding
May utilize Waqf, Zakat, Sadaqah,
Hibah which are based on the Donation-based Philanthropist
Shariah law.
May utilize Mudarabah or
Equity-based Angel investors venture capitalist
Musharakah.

Sale based contracts- Murabahah Lending or P2P crowdfunding is

Debt-based
(cost plus), Tawaruq, Ijarah. based on interest

Islamic crowdfunding offers better protection for investors compared to conventional

crowdfunding. It offers more choices of Islamic products to investors to choose from and at
the same time helps those who need capital by channelling funds to productive projects.
Islamic crowdfunding was one of the investment solutions that were developed to fulfill its
need. This halal investment alternative offers Muslims the opportunity to invest in a product
that does not involve activities that are forbidden (haram).

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3.0 ORGANIZATION INFORMATION

a) Musang Valley Agro

HISTORY/BACKGROUND OF COMPANY

Musang Valley Agro is a modern Malaysian agricultural company founded by a group of

professionals with more than 20 years of experience in the agro- business and plantation
industry. Other than durian trees, they aim excel in exporting, trading and retailing this
magnificent fruit and aim to elevate the industry and create a holistic agroecosystem.

Musang Valley Agro Sdn Bhd is a leading integrated plantation company with a vision
to become Asia’s largest supply chain plantation company while continuously advancing
otheir business growth as a global enterprise with strong roots in the ASEAN region.

PROFILE

• has contributes to the regional and global economy alongside 10 countries from
ASEAN and China
• land - sloping topography, soils with pH between 5 to 6.5, tropical climate with
constant rainfall, adequate sunlight and temperature between 20 to 35 celsius.
• RM6,000,000 revenue per year
• 2,710 acres of land
• 50,000 musang king durian trees
• 20,000,000kg fruits per year

VISION

• To become Asia's largest supply chain plantation company while continuously

advancing our business growth as a global enterprise with strong roots in the
ASEAN region.

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MISSION

• To provide consumers with safe and high-quality produce and food with the
integration of quality resources.
• To accelerate our brand and business growth by harnessing the power of data
and digitalization.

OBJECTIVE

• By building a green, modernized urban system, Musang Valley Agro Sdn Bhd
aim to give back to the local community by providing consumers with safe and
high-quality produce and food with the integration of quality resources.

COMPANY SECTOR

• MUSANG VALLEY AGRO SDN BHD is the largest contribution source for 5-star
quality fruits in the Malaysian economy and has profound knowledge in agricultural
technology and its resources.

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b) MAEKO Home Composting

HISTORY/BACKGROUND OF COMPANY

Mentari Alam EKO (M) Sdn Bhd, or MAEKO, is the brainchild of three passionate
individuals focused on solving one of the biggest problems facing our planet MAEKO Sales
& Services Sdn Bhd was founded on 12th May 2016 by a skilled and experienced biotech
team to resolve the everchallenging concerns of food waste disposal. What started off
initially as a passion, grew into an enterprise through the successful research and
development of MAEKO’s proprietary food waste composting technology, which was able
to convert everyday food waste into reusable bio-organic compost within a short span of
24 hours.

MAEKO is committed towards creating innovative technology to make composting a

closed-loop solution of resolving food waste disposal concerns and achieving
environmental sustainability. To-date, MAEKO has successfully converted more than
5,500,000 kilograms of food waste into organic compost used for planting and continues
to actively contribute towards the Sustainable Development Goals of the United Nations
on environmental conservation.

PROFILE

• was founded on 12th May 2016

• a convenient & sustainable food waste recycling method
• was able to convert everyday food waste into reusable bio-organic compost within
a short span of 24 hours
• introduce MunchBOT - MAEKO’s patented food waste composter, developed with
the specific purpose of making food waste composting modern, quick and
accessible for urban households and businesses everywhere
• patented aerobic composting technology - converts almost all types of food waste
into bio-organic compost which can be re-used as nutrient rich soil enhancers and
fertilizers in urban gardens / agriculture
• with unique and innovative technology - MAEKO is now the leading brand in food
waste management in Malaysia and has received numerous awards since its
launch in 2015.

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VISION

• committed towards helping the globe achieve zero food waste by providing
composting solutions for all kinds of businesses and homes.

MISSION

• make food waste composting a closed-loop solution towards achieving zero food
waste and environmental sustainability.

OBJECTIVE

• The goal is to help 'close the loop' of sustainability, allowing the food waste that
comes from the farms to go back to the farms as fertiliser for future food. Their
“Sahabat” MAEKO initiative - offers a range of complementary services that will
further help your business achieve its sustainability goals.

COMPANY SECTOR

• MAEKO is a leading food waste management solutions company. MunchBOT -

food waste composting units developed specifically for use by home owners and
communities - turning everyday food waste into reusable bio-organic compost and
promoting responsible food waste management everywhere.

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c) FAR Capital

HISTORY/BACKGROUND OF COMPANY

FAR Capital Sdn Bhd began in 2014 when several young investors and property experts
had an epiphany. Most people have the ability to purchase properties but need proper
guidance and assistance to reduce the complexity of the process. With a minimal number
of staff, they had to manage their clients remotely. They conducted onsite seminars and
participated in interviews at various media outlets and podcasts.

During the pandemic in 2020, FAR Capital provided free online seminars with the
intention of educating the public. They received a massive spike in inquiries, which led to
a considerable number of clients their have today.

PROFILE

• provide property investment consultation to their clients

• managed group bulk purchase of over RM1 billion in the last 24 months
• largest property influencer social media following – above 300,000 across
Facebook, Instagram and YouTube
• similar to financial advisors; but instead of focusing on equity, unit trust and
insurance, they focus on the investment class that most wealthy people in the world
use to grow and preserve their wealth (real estate)
• market opportunities for sales commission – USD6.7 billion annually

VISION

• The vision is to accurately predict demand for properties, via matching the right
buyer with the right property, using data technology.

MISSION

• The missions are to using prospect and buyer’s data to accurately predict demand
for properties, to match supply and demand for properties in Malaysia, and soon
ASEAN, and to use data to match buyers with the right properties.

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OBJECTIVE

• Help someone with understanding how to escape their financial burden, increase
their income and find suitable properties, home ownership will be accessible to
anyone including the low and medium-income groups, especially if this service is
offered at an affordable price.

COMPANY SECTOR

• FAR CAPITAL SDN BHD is a property investment consulting firm. Improve

people’s life by empowering the middle class and the poor to own assets.
Supporting young working adults, single mothers, and the elderly to stay in a safe,
secured and affordable accommodation via their coliving company.

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4.0 DETAILS ABOUT THE FUND RAISE

NAME OF COMPANY
MUSANG VALLEY
MAEKO FAR CAPITAL
AGRO
MINIMUM TARGET AMOUNT RM1,500,000 RM500,000 RM5,000,000
TOTAL TARGET AMOUNT RM3,000,000 RM4,000,000 RM20,000,000
CURRENT AMOUNT RM2,804,200 RM633,251 RM18,900,000
FUNDING PERIOD 90 DAYS 90 DAYS 90 DAYS
Redeemable Non- Redeemable Non-
Convertible
Convertible Convertible
TYPE OF SHARE Preference Shares
Preference Shares Preference Shares
(“Shares”)
(“RNCPS”) (“RNCPS”)
NUMBER OF SHARES 119 26 527
PRICE PER SHARE RM 700.00 RM1.00 RM1000.00

• ADDITIONAL REWARDS

MUSANG VALLEY AGRO MAEKO FAR CAPITAL

•No •A ‘Gratitude’ discount of •No

10% on the retail price
for each MunchBOT unit
upon its launch into the
retail market
•A referral payment from
the Issuer of 10% on the
retail price for each
successful referral of a
customer / purchaser to
the Issuer, which leads to
a completed sale of a
MunchBOT unit
•received MALAYSIA
AWARD RECIPIENT 2019
UN SOLUTION SUMMIT
(UNGA) New York

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5.0 CONCLUSION

To conclude, equity crowdfunding is the most suitable and a viable option for
startups who looking to provide investors and extra incentives to finance their idea.
Moreover, equity crowdfunding is a financing strategy that involves issuing investors
ownership in a company in exchange for capital. It’s a viable alternative to more rigid
forms of raising capital and gives entrepreneurs more flexibility in who they do business
with and on what terms. Thus, investors also are able to invest their money and place
high trust in the company.

From my point of view, among the 3 companies that offer better investment
opportunities is Far Capital. They put a large amount for their total target amount of
RM20,000,000. This can give investors a positive impression of their determination to
achieve the target. Investors will also evaluate their current amount where their current
amount is very satisfactory which is RM18,900,000 compared to MAEKO company.

Clearly, it can be proven by the large number of shares that Far Capital has,
which is 527 compared to Musang Valley Agro and MAEKO company. As far as I’m
concerned, I am more interested in choosing Far Capital as a company for me to invest
in. Regarding the MEAKO and Musang Valley Agro, the price per share they offer is
lower compared to Far Capital. So, people do not need huge capital to invest in their
company.

However, companies that want to get involved in crowdfunding should plan

their direction carefully because although crowdfunding has its own advantages, there
are also disadvantages that will affect the company involved. As for investors, they
must be smart in analyzing each company in which they will invest money. They also
need to be prepared for the risks they will face in crowdfunding.

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6.0 REFERENCES

https://www.ata-plus.com/

https://app.ata-plus.com/deals/musang-valley-agro#overview

https://www.musangvalley.com/about/

https://app.ata-plus.com/deals/far-capital-sdn-bhd#overview

https://farcapital.com.my/about-us/

https://app.ata-plus.com/deals/maeko#overview

https://www.maeko.com.my/aboutus.php

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