Alongside yesterday’s SEC’s 3 to 1 vote to approve equity crowdfunding under Title III of the JOBS Act, FundPaaS has unveiled a new product called Wisdom, an application that is said to power any crowdfunding portal or broker dealer seeking to raise capital for issuers online. According to FundPaas, Wisdom is short for “Wisdom Of The Crowd”.
The FundPaaS team believes there is a need to process many transactions per offering and keep costs low. They state they have partnered with escrow agents to offer a flat fee 3rd party escrow service that does not require a percentage of assets and complies with SEC’s 15c2-4 rules so that funding portals do not need to be in custody of assets. For a flat fee of $999, FundPaaS will process two deals and 400 non-accredited investors per month. Each investor thereafter will cost $2 each.
Duy Vo, Co-Founder & CTO of FundPaaS stated:
“We’ve built a secure, scalable, and stable transactional system that enables our business clients to easily self-serve and raise money online for Reg A+, D, and Intrastate offerings by copying and pasting 2 lines of HTML code. With our technology and partnerships, we want broker-dealers and Funding Portals to do the same for Reg CF filings with just one product. That’s Wisdom.”
FundPaaS says it has been working on this product for months and started by building APIs that can help industry practitioners easily onboard investors and issuers. On the investor side, FundPaaS can verify identity, income or net worth, and run anti-money laundering (AML) checks to comply with rules and limits. On the issuer side, they’ve partnered with due diligence providers to perform Bad Actor and Issuer checks to increase investor protection.
Sara Hanks, CEO of CrowdCheck and FundPaaS partner, commented:
“The due diligence, compliance and disclosure services provided by CrowdCheck will help issuers and intermediaries comply with the regulations, and ensure investors get the information they need to make an informed investment decision.”
Craig Denlinger, Managing Partner of Crowdfund CPA and FundPaaS partner, shared:
“CrowdfundCPA is thrilled to see the much anticipated Title III rules approved and looks forward to being a part of the ecosystem to make this revolutionary regulation succeed.”
Of equal importance are the necessary investor disclosures and legal forms to file with the SEC. For that purpose, FundPaaS partnered with iDisclose to enable a seamless transition of issuer information to enable Form C filings and the creation of Private Placement Memorandums.
Georgia Quinn, CEO of iDisclose, noted:
“[Yesterday’s] rule making was nothing short of revolutionary and a big win for small and start up business in America. It is time to get to work and make use of this new tool for capital formation. iDisclose intends to streamline the process of preparing the requisite legal disclosure described in today’s announcement so entrepreneurs don’t get sidelined by complex rules and legal expenses.”
Lastly, for an additional fee, FundPaaS will start feeding deals via API, into investor pools sourced from family offices, RIAs and brokerage firms after receiving the necessary regulatory approvals in January of 2016.
Amilcar Chavarria, FundPaaS’ CEO added:
“That will provide the necessary liquidity that’s been missing since Title II.”