FundersClub, an online accredited investor crowdfunding platform, has announced they are opening up their marketplace and software to key VC players, Angels and family offices.
In a posting by Alexander Mittal, co-founder and CEO of FundersClub, he described “Partnerships” as empowering an online presence to build a following, access turnkey fund management tools and deliver an audience of thousands of accredited investors. Interested VC’s or other investors may review the FAQ recently published on their site.
FundersClub launched in 2012 and the experience they have captured in facilitating investments in their own funds, that include pre-screened private companies, has given them the vision to broaden their platform by incorporating outside funds. FundersClub, the “worlds first online VC platform” has seen the evolving ecosystem from two different perspectives. Some industry participants see the “old” VC model inhabited by dinosaurs unwilling to adapt with the changes in technology. FundersClub sees their tested platform as a natural evolution for all VC’s and their close relationship with many big name VC’s should help them accomplish their objectives.
Mittal clarifies the “distinguishing points” that characterize their new approach:
1. Partnerships is focused on professionally-managed funds as opposed to one-off syndicated deals. Although it’s still possible for a Partnership manager to syndicate one-off deals with FundersClub, for the first time, Partnerships also allows online access to multi-company venture funds, managed by professional fund managers, that provide built-in diversification and that are aiming for a return.
2. Partnerships is not open to any fund manager. Just as the NYSE has listing requirements, we believe listing requirements are also necessary for an online VC marketplace in order to ensure consistent quality investments. Only those VCs, incubators/accelerators, and professional angel investors who:
- meet FundersClub’s minimum standards,
- pass a committee review process, and
- abide by a code of conduct for each offered fund are allowed to have a Partnership.
3. Many have critiqued existing deal-by-deal syndicated models for the high logistical overhead for investors and founders and onerous information sharing sometimes endured by participating startups, whether online or offline. The multi-company funds enabled via Partnerships allows VC to come online without requiring startup founders or investors to deal with these issues.
Mittal envisions FundersClub as “ushering in the new era of online VC”. With their established technology and experience navigating the sometimes byzantine realm of regulatory requirements – they are already half way there.