Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
FrontFundr secures another round of funding on its own equity crowdfunding platform
Betakit |
FrontFundr has secured $1.78 million CAD, through its own equity crowdfunding platform, as it looks to scale and bring more awareness to the crowdfunding model.
The funding came from 411 investors and brings FrontFundr’s total funding to date to $5.48 million, with the startup having raised all its capital through its own platform.
FrontFundr is using the financing to build on what it calls positive business momentum, as regulators have recently made it easier for startups to raise equity crowdfunding capital.
See: NCFA Response to the Modernizing Ontario’s Capital Markets Consultation Taskforce
Securities regulation in Canada, which equity crowdfunding falls under, is regulated on a provincial and territorial level, with no federal securities body. This has led to a patchwork of rules that change region to region.
Recently, the Canadian Securities Administrators (CSA), the council of all the securities regulators that coordinates and harmonizes regulation, has released new rules making it easier for companies across the country to raise equity crowdfunding capital.
“[There was a] patchwork of different rules, and they weren’t harmonized,” said Peter-Paul Van Hoeken, the founder and CEO of Silver Maple Ventures, the parent company of FrontFundr.
“That certainly has helped to create confusion in the market and definitely has been a challenge to growing the market,” he added. “Now, that’s out of the way.”
FrontFundr was founded in 2013, shortly before crowdfunding investment was legalized federally in Canada in 2015. The startup’s stated mission is to democratize the private sector investment model by offering companies an alternative to venture and private equity investing. To that end, Van Hoeken says FrontFundr has had to spend much of its time marketing the idea of equity crowdfunding to Canadian companies and investors, in addition to fighting for more harmonized regulations.
“We’re missionaries to spread the word around equity crowdfunding, in general,” said Van Hoeken. “We’re the leading platform in Canada, which is great, but that means that you also have to do most of the heavy lifting.”
See: FFCON21 On-Demand Video: European Crowdfunding Leaders - Lessons & Outlook from the First €1 Billion Raised
“Creating all that awareness has been a huge job for our company in the last five years,” the CEO said. “Not even awareness around FrontFundr, but more like the awareness that, ‘hey, this is an alternative way for you as a company to raise capital, and, as investors, you think you can only invest by Wealthsimple and public stocks, you can also invest in early stage companies from the very beginning.”
“We have seen the immense value and impact that harmonized crowdfunding rules have had in the US and the UK, and so we are really excited to work with Canadian companies and investors to help create the same sort of environment over here,” he said.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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