DealFlow was founded by Steven Dresner, a veteran of Wall Street finance and founder of DealFlow Media – company that was eventually scooped up by TheStreet (NASDAQ: TST). Dealflow was launched to make raising capital in the private markets more efficient leveraging improvements in securities laws – more specifically Title II of the JOBS Act that (finally) allowed for general solicitation. Title II allows issuing companies the ability to advertise the sale of securities to accredited investors and was an important aspect of the JOBS Act of 2012. This totally made sense and was a long time in coming. Just think how difficult it would be to sell your house if you could not easily tell anyone about it.
Title II, part of Reg D, means any type of company may raise funding online. This is not just for startups but more mature companies too. Dealflow has focused on later stage, institutional quality deals only. The company has been working with FINRA registered broker-dealers to help them extend their reach online to target new investors. A significant focus for them has been to develop tools for these broker-dealers to assist in getting their deals funded online.
Free for investors, Dealflow tells Crowdfund Insider they have resistered over 11,000 members. Very focused on compliance, Dealflow is looking to establish standards for how deals should be marketed on the Internet.
In a recent blog post, Dresner talked about why he is enamored with Reg D 506(c). Dresner stated;
“We’re closing a $1 million convertible debt offering for my own company, Dealflow Analytics Inc. (a/k/a Dealflow.com). There has been good appetite for the deal including people who have invested with us through what I call “the machine” – that is, through marketing channels we’ve developed at Dealflow. It’s because of Rule 506(c) – and specifically the ability to advertise the deal – that I can present our investment opportunity to an active readership of about 11,000 (with astonishingly high open rates, I might add!).”
Yes, the times they are a changing. Finance is cool again as innovative entrepreneurs like Dresner look to use technology to benefit not just issuers but investors. Dealflow is in the midst of a site update that will see new features like M&A posting capabilities and other online investing tools. And it should come as no surprise, Dealflow is eating its own dog-food by using their platform to close the $1 million self-funding round. “Because it works”.