Meta funding: FrontFundr CEO on equity financing themselves

Share

Betakit |

Frontfundr team Jan 2017

Vancouver-based FrontFundr announced just before the New Year that it raised $650,000 on its own equity crowdfunding platform (exceeding its target by 130 percent, with 200 investors). It was an impressive example of a tech company ‘eating its own dog food’ after helping nine other Canadian companies get funded, in sums ranging from $50,000 to $2 million.

“It’s really new, what we’re doing. So we’re creating awareness in the market. In a way, we have to create the need.”

“We’ve been helping businesses across Canada raise funds from the public over the past eighteen months,” said FrontFundr CEO Peter-Paul Van Hoeken, whose company launched in May 2015. “We decided it was our turn to walk our talk. We’re a young company too in need of capital, so it made perfect sense to use our own platform and tap into our brand champions for our raise.”

See:  FrontFundr first in Canada to raise $650K equity capital through its own platform

Rapidly growing from startup to scale-up, with a national presence across Canada, it is now looking to expand to the US marketplace.

Equity crowdfunding is still a relatively new thing, allowing entrepreneurs to raise capital from a far wider pool of funders contributing as little as $100 (spread out over a far greater number). It’s different from traditional crowdfunding (usually involving a donation in return for a product or service); FrontFundr’s platform lets investors put in their money in return for an actual ownership stake in the company.

This allows startups to go beyond the traditional avenues of seeking out angel investors and venture capitalists. That’s a big potential win for both business owners and investors — but the catch is in the regulation.

Regulations around equity crowdfunding (to protect investors and keep companies on the up and up) only came into being in the US and Canada around the beginning of 2016. “In equity crowdfunding, you’re going to a wider public that has never invested before and you need protections for them,” Van Hoeken says. “Also last year, they enabled rules for certain companies with regard to disclosure and how much an investor can invest, which allowed those investors to invest in private companies.”

In Canada, there’s an additional challenge: 10 different provincial securities regulators across the country, with three different flavors of regulation, Van Hoeken explains. “Since it’s not harmonized, it can be difficult for a company to raise money in Canada, across the country.”

Continue to the full article --> here

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

Share

Leave a Reply

Your email address will not be published. Required fields are marked *