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The untapped potential of raising capital from your community

The untapped potential of raising capital from your community
on June 28, 2024
The untapped potential of raising capital from your community

In the past year, businesses have faced unprecedented challenges securing funds. Many struggle to raise the capital they need to scale while others fight to survive in this environment of high interest rates.

Traditional sources of capital have been increasingly difficult to access leading to many companies turning to alternative sources of funding. A Non-dilutive source of funding like SR&ED financing is great for companies with a large R&D focus, but an option that companies may not be as familiar with is equity crowdfunding.

Equity crowdfunding enables companies to raise capital from everyone, including non-accredited investors. If you’re a business with a strong community of customers, social media followers, or partners, these supporters can all be invited to become investors in your company. 

FrontFundr is Canada’s leading equity crowdfunding platform. With over $200 million raised and 25,000 investments across over 175 capital raises, FrontFundr offers a solution for businesses looking to complement an existing funding round or activate your community. 

Here are a few ways equity crowdfunding can benefit your businesses:

Manage your raise in one central dashboard

Raising capital is a lot of work. Our seamless technology solution provides a centralized dashboard for managing your raise, offering detailed analytics and communications tools to engage effectively with investors. tiptap, a financial services company, utilized investor communications as a central pillar of its raise pushing high website traffic to the campaign page, and mobilizing regular updates to increase conversions. 

A key objective of its multi-million dollar round, tiptap wanted a platform that connected their company with thousands of potential investors who wanted to support an idea they cared about. tiptap successfully raised over $850,000 through FrontFundr accounting for 10% of its round with other agents such as Canaccord Genuity and Haywood Securities. 

Invite all of your company’s supporters to invest

Most businesses have an untapped investor pool that is often overlooked as a source of capital. Equity crowdfunding unlocks that capital. Each time Blossom Social, an LOI Venture-backed fintech company, would announce a major funding round or investment in the company, its community of over 100,000 users would ask to participate; however, with the majority not being accredited investors, they couldn’t participate. 

Blossom launched an equity crowdfunding campaign that raised $1 million from nearly 750 investors in just 3.5 days! They successfully converted their community of supporters (app users, social followers, partners, family, friends, etc) to complement venture investment in its $2 million round.

Drive investments and increase sales at the same time

With equity crowdfunding, customers can become investors and investors can become customers driving both funding and revenue. When Stay Wyld, a growing CPG company in the functional mushroom space, launched their capital raise they treated it as part of their overall business strategy. 

The online ads they were running for their raise led to a rise in bulk sale inquiries and growth in DTC sales with new eyes on the product and many investors purchasing products. They successfully raise nearly $800k from over 450 investors while growing the company’s revenue.

Gain access to FrontFundr’s community of 40,000 investors

Once you’ve invited your community to invest, you can open the round to FrontFundr’s network of investors. Fintech company, Willow, was looking to complement an existing venture-backed funding round. They pursued equity crowdfunding as a method of third-party validation for their product that had yet to hit the market. 

They found a large audience of supporters who bought into the vision and successfully raised over $275k with over 58% of that investment coming from the FrontFundr community, closing out their maximum offering.

Whether you’re looking to complement an existing round or to start your funding round with your community, FrontFundr is here to help. We’re revolutionizing the private markets by simplifying fundraising for all entrepreneurs while opening up exclusive investment opportunities to everyone. To learn more about raising capital with FrontFundr, apply to raise with us today.

To understand how to leverage your R&D to drive growth and unlock access to non-dilutive funding, talk to one of the tax experts at Boast today.

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