You finished signing your investment documents, made your payment, and reached out to several friends to try to get them to join you, so what’s next? This guide will help you understand what happens after a campaign closes and what this means to you.
Do all campaigns close successfully?
No! We have added safeguards and protections for you as an investor that require all companies to surpass their closing minimum in order for your investment to be confirmed. By requiring this, investors receive added protection to ensure that the total money raised will be sufficient for the company to reach their short term goals as set out in their ‘use of proceeds’. If a company does not surpass its closing minimum, all funds will be returned to you and your investment documentation will be voided.
Confirmation of my investment
At the close of a campaign the company must individually accept or reject investors. Within 10 days of the closing, FrontFundr will send each investor a ‘Trade Confirmation’ confirming that the investment has been processed. If your investment is rejected by the company (highly unlikely) you will receive a full refund and your investment documents will be voided.
Copies of the trade confirmation, share certificate and investment documents will be available under your profile in My Investments.
When purchasing an investment, there is no tax event and thus there is nothing for you to report on your tax return in the year in which you make an investment.
As the company grows and expands, the company may choose to pay out a dividend or interest, in which case the company would send you a tax slip at the end of the year to include in your tax return.
If your investment is eligible for a provincial tax credit, it is the responsibility of the company to file the paperwork with the provincial government to process the your tax receipt. The application filing takes place in February of the following tax year, and investor tax slips are made available to investors in time for the April 30th filing deadline. These tax slips are distributed via the company and the filing responsibility is with the companies.
This is generic tax information, as FrontFundr does not provide specific tax advice. Please consult your tax advisor for specific information relating to your investment.
As an owner, make sure to follow the development of your new company on social media. Companies will also provide shareholders with any company updates or invitations to company meetings via email.
Your responsibility as a shareholder
As a new shareholder, you have a vested interest in the success of the company. You can impact the company’s success beyond the funds you have contributed by simply telling people about the company. Creating awareness through word-of-mouth marketing is one of the best tools to fueling a company’s growth – become a ‘Brand Champion’ and share the company’s story and successes on social media and to people you meet!