FrontFundr has revolutionized the private capital markets by democratizing venture capital investment opportunities for all Canadians. Previously, these investment opportunities were restricted to a select group of the Canadian population, known as accredited investors, who make up only 4% of Canadians1,2. FrontFundr provides Canadians access to highly scrutinized investment opportunities; whether that be a local renewable energy company, disruptive clothing brand or ski resort. We believe in opening up startup investment opportunities to all Canadians, but not all startups.
FrontFundr only accepts approximately 9% of companies that seek listing on the FrontFundr platform. Unlike similar platforms that act as a listing service, FrontFundr actively vets the companies that seek investor capital. The curated list of companies on FrontFundr’s platform must successfully pass our comprehensive due diligence process executed by our team of in-house professionals. We utilize cutting edge technologies not available to the general public, such as Pitchbook, to access private market data.
FrontFundr starts with a pre-screen check for initial fit and red flags, such as high valuations and instances of regulatory non-compliance, moving to an in-depth review of all available materials, ending with an investment review committee meeting and vote on final listing decision.
We take a deep dive in our process with paramount focus on the strength of the entrepreneur/team, depth of corporate governance, size of the opportunity, competitive environment, partnerships, and the level of founder sweat equity in the business.
Generally, private companies are not currently tradable, nor have a set date to become tradeable. You can expect to hold your investment until the company possibly lists on a stock exchange, such as the CSE or TSX-V, or is potentially acquired. FrontFundr’s selection criteria do not suggest higher-quality investment opportunities nor does it imply that investors will generate positive returns. For investments in startups, total loss of capital is a potential outcome, which is why most investors choose to mitigate risk with portfolio diversification. We recommend every investor to undertake their own due diligence process in order to make an informed investment decision before choosing to invest through FrontFundr.
1 The most common categories of accredited investors are:
- an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $1 000 000;
- an individual whose net income before taxes exceeded $200 000 in each of the 2 most recent calendar years, or whose net income before taxes combined with that of a spouse exceeded $300 000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; or
- an individual who, either alone or with a spouse, has net assets of at least $5 000 000.
For a full list of accredited investor categories, please review the National Instrument 45-106: https://www.bcsc.bc.ca/Securities_Law/Policies/Policy4/PDF/45-106__NI___October_5__2018/