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Crowd Funding for Tech Startups

At the headquarters of Ministry of Economic and Finance Affairs with the presence of the minister himself, a multilateral memorandum of understanding was signed between the SEO, Ministry of Communication and Information Technology and Ministry of Labor and Social Affairs to enable technology-based startups to use crowdfunding through the Iran Fara Bourse.

 At the headquarters of Ministry of Economic and Finance Affairs with the presence of the minister himself, a multilateral memorandum of understanding was signed between the SEO, Ministry of Communication and Information Technology and Ministry of Labor and Social Affairs to enable technology-based startups to use crowdfunding through the Iran Fara Bourse.

Crowdfunding brings small investors and entrepreneurs together by collecting a large number of small investments to finance a new project or venture. All over the world, authorities tend to restrict investment to protect unsophisticated or non-wealthy individuals from being exposed to too much risk.

 The SEO Chairman, Shapour Mohammadi, explained that necessary infrastructures are provided and all related factors for investment will be communicated through the Iran Fara Bourse for investors to contribute to projects in the form of partnership.

 The MoU and the required regulations are to be approved by the Securities and Exchange High Council which will detail each party’s role in the process. Moreover, Ministry of Economic Affairs and Finance grants the license for each individual project.

 Shapour Mohammadi emphasized that MoU does not include loans provision of any kind to startup companies. Crowdfunding cap is set to 50 billion IR Rials for now which is collected by authorized agencies from a pool of investors. Mohamadi Also clarified that there is no regulation against foreign investors’ contribution, so they also can benefit from the scheme.

 Those already using crowdfunding can benefit the new arrangements and are required to comply with the new regulations within six months of implementation.

 “The SEO is not aiming to recommend any projects to investors, but we try to facilitate conditions for both investors and entrepreneurs”, Mohamaddi mentioned.