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Citizens' Mail

What is crowdfunding?

In the last decade, the financial market has changed dramatically from typical financial models to online fundraising techniques which link financial funders with founders in a virtual platform.

Crowdfunding is a modern fundraising mechanism where a large number of individuals make financial contributions to a project or venture to receive a return, social well-being, expected interest or any other pre-defined benefit via the internet or social media platform. Even though several crowdfunding platforms operate in the Sri Lanka context for half of a decade, the awareness still remains low. This article mainly focuses on equity-based crowdfunding for startups in the Sri Lankan context.

Traditionally, the investors always pay attention to the management attitudes, the feasibility of the product or service and the financial conditions when making investment decisions. These factors become challenging for most startups.

Financial condition is judgemental and should be able to justify for future years based on the organisation’s growth model. Professional investment decisions are done based on financial analysis and the snapshot of the financial status of a startup does not show a better image during the initial years. Management attitudes and product feasibility are subjective concepts and it is difficult to create the required level of confidence for professional investors under the impression of lack of financial performance as it said.

Due to the difficulties of fundraising in the Sri Lankan financial market, most of the startups face financial instability and this is where crowdfunding comes into place. It pools funds from professional and non-professional investors and it is a collective fund with small contributions from a large group of individuals or institutions. It has opened a new era for business establishments and capital requirement financing. The interest of investors in the crowdfunding model is lower compared to traditional equity investment and results in less engagement to the firm’s operations thereby enabling the founders to have a more freedom to execute the firm’s strategies.

Nowadays, few crowdfunding platforms have boomed up in the Sri Lankan context. It creates a trend for individuals to make their investment at a small level of contributions and it is 9 pma hassle-free investment scheme for passive investors as well. New ventures (such as startups) have easy access for crowdfunds if the targeted fundraising criteria are met and the required level of investments in the crowd fundraising campaign is pooled. Thus, startups can overcome inflexibilities of financial market operations through crowdfunding platforms.

The ethical challenges of equity crowdfunding include overpricing of equity where the target of the campaign is always above the real value of equity. Funders have a lower concern on the value paid for equity since a small contribution is made by them. Extensive involvement of non-professional investors creates problematic situations for startups compared to traditional equity. Moreover, crowdfunding opens the door for the public community to offer equity contributions to fundraising campaigns. It can even create a bubble in the security market in the years to come. Even though this involves minor ethical challenges to overcome, the freedom of operation, the easy access to funds and the lower cost of equity are all advantageous to start-ups in Sri Lanka.

Miyuki Shehara Peiris

 


Emotional Intelligence

Emotional Intelligence is a tool anyone can use to achieve prosperity in any country or in any organisation. It also can be used with many other tools to resolve grave problems.

Leaders can achieve amazing results fast if they have proper environment to use Emotional Intelligence. Many researchers from different countries have already joined the UNO and are bringing in prosperity with this concept. The challenge here is to get people to turn inward and become self-aware to perceive Emotional Intelligence.

“Thoughts constantly occur in people’s mind irrespective of their status. They are naturally able to manage such thoughts inwardly with or without any outside support. The ability to perceiving thoughts (not mere observing) and managing them on their own is called Emotional Intelligence.” Five pillars of EQ or EI as transpired from the expert analysis.

1) Self-awareness/self assessment, 2) Self-regulation, 3) Empathy and compassion, 4) Relationship management and 5) Effective communication

Modern thinking is highly critical of intelligence. IQ accounts only for 20 per cent of intelligence whereas Emotional Intelligence accounts for 80 per cent. The people with a lower level of intelligence can be developed to achieve 80 per cent of EQ. In the West, more and more researches are carried out and ‘Sustainable Development Goals’(SDG) hub of the UNO engaged in this research activities are from universities of a large number of countries, such as India, the UK, Australia, Japan and South Africa. Our local universities should get involved with this research as this topic belongs more to Asia. What we need is to stress and reject poor quality research coming from advanced countries.

This country needs networking individuals (including members and sympathizers of all political parties) who possess the knowledge or the enthusiasm of the subject, ‘Emotional Intelligence’. They can vary from people with little knowledge to experts. As any person with or without any education at all can understand this simple concept, any such person who has some interest or enthusiasm can be used to educate the masses together with experts. Their main responsibility is to give this topic maximum publicity using the media.

It is important to grasp the strength of Emotional Intelligence to help the common man.

Any person who gains the self-awareness relating to Emotional Intelligence can contribute to this concept. This is the magnificence of this philosophy which has been well nourished in Asian countries for centuries. It is a powerful tool to create a healthy productive workplace and organisational culture leading to building a prosperous nation.

Gaminithilaka Pandikorala
Panadura

 


Illegally imported cigarettes

A consignment worth more than Rs. 60 million illegally imported cigarettes from UAE, was destroyed at the Ceylon Tobacco Company warehouse, Colombo according to an English daily. Why not disclose who the importer is?

The powers that be should not only cancel the license to import but in addition should impose a heavy fine with imprisonment. This will serve as a deterrent to other importers of contraband.

Mohamed Zahran
Colombo 14

 


On my way empty handed

The title is a line taken from the song ‘Fascination’ sung by Nat King Cole.

As a society of people the Americans are very open; open even to spread myths.

Bernie Sanders is a candidate contesting the forthcoming American Presidential elections. Recently he fell sick whilst campaigning and was taken to hospital. He believed it was a case of fatigue and expected soon to be back on the campaign trail.

At the hospital the doctors found he had suffered a myocardial infarction meaning a heart attack. A catheter was introduced into the main artery to remove the blockage and a stent placed, the patient discharged in a matter of hours. As always in America the whole thing was turned into a media frenzy the senator interviewed many times over. In short what the senator said was whilst campaigning he always sweated profusely and often felt tired and listless. Now he knows they were symptoms of an impending heart attack. Why a man of learning ignored the signs of an impending heart attack tortures the mind.

Contrast this openness to what is happening here. It is common knowledge one of the candidates contesting the Presidential elections has undergone a medical procedure in Singapore. Whether it was a serious or a simple procedure is in the dark. The probability, using the jargon of maths, given the variables of age and astronomical costs, it was a serious one. Was it then a heart attack? Those who clamour to know whether the candidate has renounced his American citizenship are barking up the wrong tree, the issue of great importance is his health.

Medical knowledge, specifically in medicine and surgery, has advanced in leaps and bounds and it makes sense to make use of them. After my sports career was over I decided to stay away from eating dead carcasses, meaning turn into a vegetarian. I did not know at the time I took the decision, I will eventually pay a stiff price.

To be in good health humans need a certain quantity of iron in the blood within a range measured in mg per decilitre. The only good source of iron is beef. Other meats are players in the margin. Those who refrain from consuming beef run the risk of getting the iron levels in the blood slip below the lower limit resulting in a sudden spike in blood pressure with consequences often tragic. In my case the systolic pressure had soared to 190 mm Hg and the diastolic to 100 mm Hg written 190/100. It is a miracle I did not rupture a blood vessel. My immediate run to a private hospital in Colombo was a blessing because the low level was traced and corrected by my cardiologist with a capsule of iron. I continue to refrain from taking beef and other meats and meet the potential shortage of iron with a daily capsule of iron.

Another important matter. Take the pressure pill just before you go to sleep. It makes a huge difference in terms of a restful sleep with reduced visits to the toilet for urination. Purchase a wrist monitor and record in a notebook the readings. If you detect an unusual movement in the readings consult a cardiologist immediately. Do not dilly-dally. A few minutes lost here and there can mean the difference between life and death. Do not go on your way empty handed. That is what the candidate has wisely done.

Ephrem Fernando


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