If crowdfunding and venture capital ever had a child, it would probably be something like this startup. Taking center stage in this month’s Fintech in Vancouver series is FrontFundr, an investment platform that is tapping into a much larger investor community that consists of seasoned investors and the wider public versus your traditional startup investors, like angels, venture capital firms and wealthy individuals. For consumers, it’s a good way to support your favorite businesses while knowing that you’re directly driving innovation and entrepreneurship alongside seasoned investors.
FrontFundr emphasizes on business growth rather than raising capital. To ensure high quality investment opportunities, they are put through an in-depth screening process when entrepreneurs create and submit their company profile.
We had a chance to talk with FrontFundr’s Chief Growth Officer, Jill earthy, to learn more about their due diligence process, what they look for in their team, and where we can hope to see FrontFundr in the future.
Trulioo: We are huge fans of RentMoola and Riipen, which are two exceptional examples of equity crowdfunding deals completed through your platform. Can you tell us a little more about the in-house due diligence and advanced online compliance process undergone by FrontFundr before it is presented to your investor community?
Jill: FrontFundr is an Exempt Market Dealer registered in 8 provinces across Canada. This means that we can use all of the different prospectus exemptions across Canada, making it easier for companies who are raising capital to access a wide range of investors. We are the first online platform to go through the extra effort of becoming a registered firm. This was, and continues to be, very important to us to ensure we are able to go the extra mile in everything we do, including how we vet the companies who list on our platform. We work with each company through the Due Diligence process and review each aspect of the business from the Management Team, Valuation, Financials, Business Model, and use of funds. We have an internal team who works through this process, requesting additional information as needed. Once a company has been recommended by our Due Diligence team, the information is reviewed by an Investment Review Committee, comprised of internal and external members. External members with specific industry expertise are brought in, depending on the type of company we are considering, to ensure we are considering all aspects of an opportunity. The companies we work with are appreciative of this process, which is collaborative and thorough and ultimately, makes the companies stronger. The result is quality and thoughtfully curated investment opportunities on our platform.
Trulioo: You’ve got a lean team of talented and passionate individuals, can you tell us what top three characteristics you look for when adding new members to your team?
Jill: We are now a team of 13 incredible individuals who are collectively evolving FrontFundr. We look for team members who are aligned with the core values of our company and who truly believe in what we are doing. Our core values include:
Trust in everything we do
This is essential and perhaps obvious. However, we are dealing with people’s money and base everything we do on trust, both internally and externally.
Challenge the status quo
We have an open, collaborative environment with ongoing dialogue, brainstorming and problem solving. We are always innovating and seeking ways for improvement – we never settle for the status quo. We are disruptors for good!
Responsibility for all actions
We all make mistakes, however, we believe the way in which a situation is handled is what makes a difference.
We are changing how capital is raised in Canada by bringing it out into the open and making it accessible to all. Transparency and openness is critical, and having an online platform helps us to deliver on this by democratizing the process.
Simplicity (Keeping it simple)
Our team is far from simple but we do like to do things efficiently and effectively!
Trulioo: Does FrontFundr have plans to expand into new markets?
Jill: We made a strategic decision earlier this year to focus primarily on the Canadian. We strive to be the leading platform in Canada with a reputation for successful, quality deals. Focus is critical in the early days! Once we have achieved this, we will then explore expansion opportunities in the US in early 2017, with additional global partnership discussions underway.
After the passing of the JOBS Act that legalized equity crowdfunding in 2013, non-accredited investors could now purchase shares in private companies. With new solutions surfacing in the market like FrontFundr, it is exciting to see equity crowdfunding become increasingly accessible to everyone, not just VCs and angels.
If there’s a fintech company you’d like to see featured in our Fintechs in Vancouver blog series, please submit your request to [email protected].