Today, Canadian financial technology platform, FrontFundr launched with a promise to unlock a new capital market and allow regular people to invest in private companies.
FrontFundr uses technology to enable entrepreneurs to raise money from a broad investor community. This is an opportunity for the general public to directly drive innovation and entrepreneurship. With FrontFundr, both experienced and regular investors are able to exercise positive influence on businesses they would like to support.
Previously, most Canadians were locked out from investing in young companies due to absence of an accessible market place and regulatory restrictions. On the other side, most early-stage companies looking for capital to grow their businesses had limited to no access to capital markets. This model left gaps in the growth-potential of early-stage companies, and it cut average citizens out of these investment opportunities.
Peter-Paul Van Hoeken, CEO at FrontFundr, stated:
“We’re giving regular people a chance to sit in the pitch seat and act as ancillary dragons. We’re providing ordinary people with access to carefully screened investment opportunities, and entrepreneurs with access to more capital to support their growth.”
In traditional investment models entrepreneurs were limited to approaching angels and venture capital firms in hopes of finding much needed capital. This process of getting access to informal networks of a relatively small investor group requires a heavy investment of time and money. What’s more, it taps only a fraction of the world’s willing investors. FrontFundr is disrupting private-sector investing and bridging that gap.
Van Hoeken also noted:
“We are offering an open market connecting seasoned investors and retail investors with stringently screened companies and supporting the entire investment process from pitch to securities purchase. Delivering better capital and better deals to all parties.”
Regulators around the world are adopting new rules to allow companies to raise funds from investors through crowdfunding. The US Securities and Exchange Commission adopted rules this year allowing companies to sell as much as US$50 million of securities via the Internet. On May 14 2015, six provinces in Canada announced that they will allow young companies to raise up to CA$500,000 a year using a funding portal. FrontFundr is leveraging existing and new capital raising rules to offer its clients a broad range of funding and investment solutions.
FrontFundr’s investment opportunities are typically early-stage, mission-driven ventures seeking $200,000 to $2 million in capital investment. They have positive social impact and are predominantly from one of three key sectors: arts & entertainment, energy & environment, and technology. FrontFundr has already registered three businesses to raise capital through its platform, including RentMoola, InterLock, and Emergent Waste Solutions.
“We’re an innovative technology company and we work at a fast pace. We’re excited to work with an exempt market dealer that operates similarly to the way we do—leveraging technology and innovation to disrupt an industry to the benefit of the public.”
FrontFundr is a fully compliant, registered exempt market dealer (EMD) and conducts stringent due diligence on all business investment deals presented to its investor community, and ensures both investors and entrepreneurs understand the risks and rewards associated with entering into a transaction.