Frequently asked questions

About MRADIFUND

Mradifund Limited is an online fundraising company based in Nairobi,Kenya. Our platform allows SMEs to source funds from various investors across the globe.
Anyone who is 18 or older may become a Mradifund member.

Fundraising on MRADIFUND

A wide range of businesses from all sectors can raise capital through Mradifund. However, we focus on businesses that already have some track record and are looking to expand. Our criteria includes:

  • Operational history of at least 2 years – can back this up with financial statements
  • Registered in Kenya
  • Has a team in place
  • Is tax compliant
Mradifund was established to allow people who understand the risks of investing, but don’t have both vast fortunes and tremendous amounts of time to build a diversified portfolio of investments in early-stage businesses.
Our target investors include active professionals, business owners and managers, academics and similar types of people who don’t have both the capital and time required to be a traditional angel investor.
We also have many angel investors and venture capitalists using the platform to source investment opportunities
We market Mradifund to investors using PR, social media, conferences and other tools to communicate the benefits of investing in exciting new businesses.

We also encourage entrepreneurs to tell their friends, family, customers, partners and members of their community about their campaigns. People are far more likely to invest in businesses run by entrepreneurs they know and like. While campaigns usually get some investment from people who find them on the site, they tend to receive get a more engaged and enthusiastic investor base from people they send the campaign to directly from within their existing network.
Mradifund is the easiest way for founders to access the capital of people who want to invest in businesses but do not have both the money and time to be traditional angel investors. This could include friends, family, customers and members of a business's community, along with other people who are interested in, and want to share in the success of, dynamic new businesses. Due to high transaction costs and other considerations, it is very difficult to raise capital from these people directly offline. Mradifund makes it a straightforward and simple process for companies to raise investment, as well as build engagement with, or reward, their community.
Accepting external investment into a company (from any source) always comes with certain responsibilities, but entrepreneurs are still in control of their business on a day-to-day basis.

So long as they retain over 50% of the business's equity, they will keep control of it. For this reason, we suggest that they do not offer more than 50% of a business's equity in exchange for the money raised through Mradifund.

Post-Fundraising Process

Us. We have a number of measures in place – including conducting upfront checks, holding entrepreneurs and businesses accountable for the information they have provided us, and, if necessary taking legal action against the entrepreneurs and business for non-compliance with the subscription agreement – to ensure that the investment monies are used for genuine business purposes.

Entrepreneurs may make bad business choices, and that's a risk investors bear, but if any entrepreneur tries to act dishonestly we will investigate and, if appropriate, pursue legal action against them. That said, we believe that 99.9% of entrepreneurs are well-intentioned people trying to create great businesses, and we expect only to have to use these measures on rare occasion.
Absolutely. We encourage investors to reach out to the business to offer support, advice or mentorship at any time. One of the biggest benefits to a business using Mradifund to raise capital is that it can tap the expertise and wisdom of its large base of investors.
Yes. The main form of mentorship and support comes from investors. We find that often the most useful thing for a business (other than capital) is connecting with the right specialist, and then deciding how and if they would like to work with them. By raising funds on Mradifund, businesses will be connected with hundreds, and potentially thousands, of people from a range of backgrounds, all of whom have a vested interest in the success of the business. Somewhere in that crowd there is likely to be someone who can help with what is needed, when it's needed (as well as lots of people who can test mew products and act as early-adopters and mavens). Additionally, we will be very happy to introduce teams to our extensive network of mentors, advisers, vendors and later-stage investors.
If a campaign receives 100% of the investment it is seeking within the campaign period, we perform detailed due diligence on the business, the company and the directors.

Once we have completed legal due diligence, our investment team prepares the relevant legal documentation required to complete the round of financing raised on Mradifund. This includes the execution of our standard form subscription agreement and the adoption of our standard form articles of association, in each case modified as necessary to reflect any relevant circumstances. We also ensure that any intellectual property owned by individuals is transferred into the company’s name, and any outstanding director loans are dealt with in an appropriate way before closing.

And when we are happy that everything is in order, we transfer the funds to the company, less our fee. If any material problems arise during the due diligence process, if we discover anything which we believe would result in the completion of the deal not being in the interests of the investors or if the company is not willing to adopt our articles or sign our subscription agreement, then we will cancel the deal and return investors' investment funds.

Investing in Business

Investing in businesses is about picking businesses that you believe have the potential to grow. You invest in exchange for a portion of their equity, meaning that you buy shares (or other equity-like interests) in the business. If a business you've invested in succeeds, the shares that you own will become worth more than you paid for them. However, if the business fails - as the majority of early-stage businesses do - you'll lose your investment.
When an entrepreneur has run a business for some time, they reach a point where they want to expand. Depending on the business, this might allow them to move to a new market, add a new product, increase their production capacity, hire a great team, expand their market and customer acquisition efforts, and so forth.
Each business decides how much money it wants to raise in exchange for a certain percentage of its equity, and each investor’s equity interest will be proportionate to the size of their investment. So if a campaign raises KES 10,000,000 in exchange for 20% of its equity, and you invest KES100,000 (1% of KES. 10,000,000), you will receive 0.20% (1% of 20%) of the equity of the business.
No. Angel networks introduce investors and entrepreneurs but tend not to get closely involved in the investment process - it’s up to each investor and each entrepreneur to negotiate a deal individually and get lawyers to draft up the necessary contracts. Mradifund is a full investment platform, allowing investors to invest in businesses directly through the platform. Many angels choose to invest through Mradifund because of the increased efficiency and access to deal flow.
No. When investors invest in a business through Mradifund, they invest solely in the single campaign that they’ve chosen.
There are similarities but also important differences. The concept of having many people provide finance in small quantities via the internet was pioneered by peer- to-peer lending platforms like Kiva, and our founders were inspired by those models when creating Mradifund.

However, there are two major distinctions between peer-to-peer lending and Mradifund. First, Mradifund is generally about growth-stage finance –for businesses, whereas most peer-to-peer lending sites focus on personal finance or later-stage businesses. And second, Mradifund is about equity investment rather than debt, which means that investors who use Mradifund become shareholders in the Company can achieve much higher returns than they would in peer-to-peer lending, but they also bear the risks of the business and won't get their original investment back if the business fails.
Yes. Crowdfunding is a broad term that has come to be used for a wide-range of financing techniques, including charitable and political donations, art patronage and entrepreneurial finance. Most forms of crowdfunding have not provided funders with a potential for financial return: they usually rely on altruistic giving or non-monetary rewards. Mradifund allows people to back businesses by crowd investing, rather than donating, and therefore receive genuine financial returns when their investments are successful.
No. As an equity investor, investor liability will be limited to the amount invested, which means that even though they might not get their investment back, they can't be called on to pay anything more no matter what happens to the business.
There are three key risks when investing in small and medium size businesses (SMEs). The main risk is simply that the business could fail, and investors won't get any money back. And even if the business succeeds, investments are likely to be illiquid for a substantial period of time - often a number of years - meaning that investors are unlikely to be able to sell the investment and will likely not receive dividends from it either. Finally, there is the risk of dilution: if the SME raises more capital later on (which most successful businesses need to do), the percentage of equity that existing investors hold in it will decrease relative to what they originally had. See our Risk Warning for additional details on these risks.
Absolutely not. We strongly suggest that investors invest most of their capital in safer, more liquid assets, such as mutual funds, bonds and bank deposits. As a rule of thumb, active angel investors tend to invest no more than between 5% and 10% of their capital in growing businesses. Whatever proportion of money users choose to invest, the most important thing is that they can afford to lose all of it.
We think that the better practice is to diversify by investing small amounts in multiple businesses. Because the distribution of returns from growing businesses is highly skewed - meaning that the majority of young businesses fail, and most of the profits come from a few big successes - investors are more likely to make a profit by investing in a number of businesses in the hopes that the successes of a few outweigh the losses of the rest.

Making investments through MRADIFUND

Please contact support@mradifund.com for further details.
We do not review or approve the content in the Q&A which accompanies Mradifund campaigns. The Q&A constitutes "one-off communications" between entrepreneurs and potential investors and should be treated as one-on-one conversations. It is the responsibility of a campaigning entrepreneur to monitor and respond to questions raised in their Q&A and respond to them accordingly. We are not able to remove Q&A content on request, however, we do reserve the right to remove any content in the Q&A that we consider spam, abuse or trolling.
We are not authorised to give advice. While we confirm and approve all the information provided in each campaign, we do not make our own judgment about whether it's a good business. We believe that a large number of diverse investors are better suited to assess the business’s prospects than a few professional managers. That said, we do our best to exclude businesses that are proposing to do something illegal, unethical or just not viable.
The minimum is KES. 100,000 investment (although some campaigns may have a specific minimum investment which is greater than KES. 100,000 as a result of its share price). Given the risk profile and returns potential of growing businesses as an asset class, however, we strongly suggest that investors seek to build a balanced, diversified portfolio.

The maximum investment is however much money the business is willing to accept, less anything that's already been committed by other investors.
There are currently two ways to deposit money into your Investment Account to pay for investments:

  1. Bank card – You can deposit money directly into your Mradifund account via card payment from any supported country. We currently only support Visa and MasterCard. Our secure card processor, Jambopay, handles these payments. This is the fastest deposit method.
  2. Bank transfer – Using your unique reference number provided in your Investment Account, you can deposit money into your Mradifund account by initiating a standard electronic bank transfer (also called a payment). Bank transfers can several business days to clear into your Mradifund account.
Investors will get their money refunded into their Investment Account, less any transaction fees applicable. Mradifund operates on an all-or-nothing basis, meaning that if the business does not raise all of the money its campaign is seeking within it's allotted campaign period, it gets nothing and investors receive their funds back into their Mradifund account.
No. Once all the money has been invested, we conduct a legal due diligence process and negotiate a legal agreement with the business on behalf of investors before the investment is completed. If we identify problems in the legal due diligence process or are unable to agree legal terms, we'll cancel the investment and return funds back to investors, just as we would if the campaign had not received commitments for all of the money it was seeking.
Investors can choose to share their profile publicly with other Mradifund members, or not, from within their profile. They can also choose to make each investment public or anonymous at the time of investment.

Even if an investment is private, the business will be informed of the identity of all of their investors before the investment is completed, and in certain cases investments may be recorded in public filings with the Registrar of Companies or elsewhere as required by law.
You can make a deposit through Jambopay using most cards. However, Jambopay may not recognise cards from some countries. We support Visa and MasterCard, but American Express is not currently supported. If you can’t make a card payment, then you can still make a transfer to Mradifund using a bank deposit, through your bank or another payment service.
Please contact support@mradifund.com
To make investments, you need to successfully complete our Investor Questionnaire. This is necessary to show us that that you have the professional judgment and understanding to appreciate the risks and considerations of investing in young businesses as an asset class.
Users purchase ordinary shares in a business. These are the same type of shares that the founders and other early investors will usually have.
Us. We have a number of measures in place – including conducting upfront checks, holding entrepreneurs and businesses accountable for the information they have provided us, and, if necessary taking legal action against the entrepreneurs and business for non-compliance with the subscription agreement – to ensure that the investment monies are used for genuine business purposes.

Entrepreneurs may make bad business choices, and that's a risk investors bear, but if any entrepreneur tries to act dishonestly we will investigate and, if appropriate, pursue legal action against them. That said, we believe that 99.9% of entrepreneurs are well-intentioned people trying to create great businesses, and we expect only to have to use these measures on rare occasion.
Absolutely. Investors are welcome and encouraged to reach out to the business to offer support, advice or mentorship at any time. One of the biggest benefits to a business using Mradifund to raise capital is that it can tap the expertise and wisdom of its large base of investors.
The main way investors can make money from investments is if they sell their shares. This is most likely to happen if the business is bought by another company or floats on a stock exchange – also called an exit event. It takes time for businesses to grow to the point of exit; it may take several years for this to occur. In addition, investors may also receive dividends the company pays on their shares.
Any money investors receive from an investment will be credited to their Mradifund Investment Account. The money can then be withdrawn, or invested in another business, at any time.
Although we may not facilitate subsequent financing rounds directly, where possible we will let investors know when the company is looking to raise more money, and they will be free to discuss making an investment with its management.
This is more likely to happen than not. In some cases the business will either be wound up or sold for a nominal price, while in other cases the business won't formally shut down but we'll write off the investment and dispose of the shares. Any proceeds from these processes will be distributed to investors, but they're likely to represent far less than the original investment, and there may not be any proceeds at all.
Unless they're extremely wealthy and have lots of time on their hands, it is very difficult for most people to invest in growing businesses the traditional way as a business angel. Due to transaction costs and other considerations, most angels find they need to invest at least KES1, 000,000 per business; and because this is a high-risk type of investing, many angels try to invest in at least 10 and often more. This means that to be an angel, people generally need to have KES. 10,000,000 or more to allocate just to businesses (which means that they need to have far more than KES. 10,000,000 in order to build a diversified portfolio that includes safer assets), and they also need to have the time to find, negotiate and execute a large number of offline investments.

Investors with that much money and time available might not need Mradifund (although we can still provide them with access to investment opportunities they might not otherwise find, and more efficient investing). For everyone else, though, Mradifund provides the chance to invest small amounts of money through a streamlined, online process, which means that we're the one way to participate in the benefits of investing in growing businesses without having both a fortune and tons of time to spare.
No. The equity of an SME is considered a high risk investment, and in most cases money will not be returned to investors. The goal with this type of investing is to invest in one or several businesses that perform so well that they more than compensate for the ones that don't work out. But as there's no guarantee that investors will pick one of the big winners, investors should only invest money they can afford to lose.
Mradifund was established to allow people who understand the risks of investing, but don’t have both vast fortunes and tremendous amounts of time to build a diversified portfolio of investments in SMEs. Our target investors include active professionals, business owners and managers, academics and similar types of people who don’t have both the capital and time required to be a traditional angel investor. We also have many angel investors and venture capitalists using the platform to source investment opportunities.
If a campaign receives 100% of the investment it is seeking within the campaign period, we perform detailed due diligence on the business, the company and the directors. This includes:

  • Helping the entrepreneur set up the company if it has not already been incorporated or needs to create a Kenyan structure,
  • Sending the entrepreneur a typical early-stage investment due diligence request list, requesting that they send us any contracts, paperwork or other information with respect to general corporate matters, shareholders, financials (including debt), commercial contracts, property, intellectual property and related matters, all of which we review, and
  • Interviewing directors, if we deem it necessary.


Once we have completed legal due diligence, our investment team prepares the relevant legal documentation required to complete the round of financing raised on Mradifund. This includes the execution of our standard form subscription agreement and the adoption of our standard form articles of association, in each case modified as necessary to reflect any relevant circumstances. We also ensure that any intellectual property owned by individuals is transferred into the company’s name, and any outstanding director loans are dealt with in an appropriate way before closing.

And when we are happy that everything is in order, we transfer the funds to the company, less our fee. If any material problems arise during the due diligence process, if we discover anything which we believe would result in the completion of the deal not being in the interests of the investors or if the company is not willing to adopt our articles or sign our subscription agreement, then we will cancel the deal and return investors' investment funds.

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