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Sam Quawasmi and Chris Thomas, founders of Eureeca. Sarah Dea / The National
Sam Quawasmi and Chris Thomas, founders of Eureeca. Sarah Dea / The National

Relief on funding for start-ups

If you have always dreamed of owning a stake in the next big business but have only a hundred dollars to spare, a new website may be for you.

If you have always dreamed of owning a stake in the next big business but have only a hundred dollars to spare, a new website may be for you.

Eureeca.com aims to support the growth of small and medium enterprises (SMEs) by helping them to obtain investment from the public. The website sells equity for as little as US$100 (Dh367).

It is the brainchild of two Dubai-based former investment bankers, Chris Thomas and Sam Quawasmi.

"There are many, many great businesses out there that find it very difficult to raise funding," according to Mr Thomas, 34, who said he left a secure job to start his own brokerage at age 25.

"We have been following the crowd funding model for the last few years. It's a proven investment model as regards to donations," he added.

Some crowd funding sites offer something in return for an investment - T-shirts, CDs, cupcakes.

"We thought there had to be a way to combine the great need for funding real businesses but also the need for investors like you and me to get involved and exchange hard cash in exchange for equity in new and growing businesses," added Mr Thomas.

As a means of sourcing investments, crowd funding is becoming increasingly popular. An internet search reveals dozens of websites with businesses seeking donations and loans, or offering royalties and stock sales to investors.

But the space is a "major legal minefield", said PK Gulati, a Dubai-based investor.

"If you look at it from the perspective of the law in most countries, if you do small investing and a lot of people invest, it becomes . a share offer, and if it's a share offer there are rules and laws governing it," he said. "It's like taking a company public."

Mr Thomas said his company was working with all of the relevant regulatory authorities, including lawyers, administrators and banks.

"We acknowledge that the process is technical," he said. "We have a number of highly experienced professionals both at board and executive level, that have navigated the technical laws globally, worked directly on international exchanges and managed public offerings for some of the biggest companies in the world.

"We are first to market in this part of the world and, as such, will be pioneers in the formation of what we believe will be the most exciting and accessible alternative to traditional venture capitalism," added Mr Thomas.

gduncan@thenational.ae

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