A Canadian crowdfunding platform for Canadian startups, as well as sister site to SMV Capital Markets (funding for existing private companies).
I just started using the platform, but have a few comments to help potential investors who are conducting their own due-diligence.
- yes, it is legitimate
- doesn't charge fees to investors
- conducts due-diligence on behalf of investors
- low minimums
- debt and equity offerings, such as common shares in startups as well as illiquid bonds and MIC
- good incentive structure: they earn money from "warrants": a percentage of shares of startups if they have a successful exit
- all online
- Frontfundr assists their start-ups to have successful exists by helping them get listed on Canadian junior exchanges (apparently they had one successful public listing)
- warns you about the riskiness of the investments, especially if an investment doesn't align with your stated risk-tolerance
- won an award: Private Capital Markets Association of Canada (PCMA) Innovation in Capital Raising and Investment Deal of the Year
- few deals so far (32), much smaller than Seedrs (UK) and offerings less enticing
- many Canadian companies would prefer to crowdfund on USA sites like Seedinvest
- fee for listing (6-8% charged to amount raised by startup) is comparable to Seedinvest. However, to incentive Canadian companies to remain in Canada and list on Frontfundr they might consider having a more competitive fee
- difficult to fund through a TFSA or RRSP (this would be a great feature)
I will return in a year to update and explain my experience. I am hopeful that this platform will succeed and attract more Canadian startups, so clearly I am a little biased & optimistic.
FrontFundr is rated 4.0 based on
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