Pitch Please

00:01.96
mike_flywheel
What's up everybody. It's Mike we're back here on the pitch please podcast today I'm here with Peter Paul from front front funder. They're an equity crowdfunding platform giving everyday people like you and i. Access to help support startups and other growing businesses by providing them with funding in exchange for equity I think we're going to talk a lot more about it. But first let's hand it over to Peter Paul to introduce himself and maybe start with a little bit of background on yourself and what your role is at front funder.

00:27.71
Peter_Paul
Thanks. Sure. Thanks Mike and it's it's a great to be with you today and talk about the exciting and and and evolving ah landscape of investment crowdfunding. So yeah, my name is Peter Paul Vanucen I'm the founder and Ceo of frontfunder. And front fundner is canada's leading investment crowdfunding platform and as as Mike as you mentioned basically what we what it comes down to is that we enable companies private companies to raise capital from the wider invest community emphasis wider so far beyond the traditional investors of. Angels vcs but really open it up for everyone. So that's what what what? What front runners is doing and and we've been ah, we've been at it now for about six seven seven years and it's it's an exciting and evolving industry.

01:20.44
mike_flywheel
Well I'm excited to learn more about front funder about the industry where and how maybe I can get involved. Um, but let's learn a little bit about your background. You've got obviously I was just checking out your Linkedin profile a massively long list of tremendously rich experiences. Maybe talk to us about where you know your career journey or you know life journey started and some of the things leading up to where you are today with with friendfunder.

01:43.72
Peter_Paul
Great Yeah, yeah, and and it's that's been an interesting journey indeed and I started my career actually in ah in in banking in the bank industry. This was back back back in in Europe mainly in the Netherlands where I'm originally from. And as well as been based in the in Lo the yeah uk for for for a while and um so yeah work for for a large international bank and always being sort of ah interested intrigue and you know. Banking and and finance and so that kept me busy. You know in that industry for bait for about 17 years and the more I sort of more time are spend in the industry the more I also start thinking. Wow is this is this. Where is this taking me and is this ah is this where we're Goingnna stay is this. We're Goingnna retire and I also. Careful. You know it's and it's it's a bit of ah, an interesting industry and and a tricky industry perhaps and and also learned how it's you know, not necessary as as open as accessible and easy to understand for the wider investigatory community. So so for the wider public actually and so. Ah, so that that together with with exploring and a move from ah from the Netherlands to to Canada which happenss in in in the 2010 when I he may immrate to Vancouver with my family was also a great opportunity to you know start a new I would say new book actually and sort of leave bic.

03:13.24
Peter_Paul
The big you know, banking industry behind me but but still intrigued by by finance and investing and you know think you know what What's ah ah what what? What can we change in this industry and so so when I started when I landed in Vancouver I I really started all over again if you like and started working with small companies and. You know, helping them to get ready to to raise capital and and that was a time where I ah sort of discovered how challenging it is for companies to to raise capital but also how it's a very traditional industry where where these startups go to a very select and relatively small group of investors like. Angels feces and you know, really a small group and also how how in his whole process of capitalizing technology. Not really used at all. It's very archaic. It's very ah you know investor pitches events and and and you know investor meetings and why are why are we not using technology like another. Any other industry it basically you know took advantage of that and went online. So so that together with what I what what was already happening in ah in in countries like the Uk where investment investment crowdunding actually started around 2010 and was so where where it was well on its way. You know I thought hey that's that's interesting that is really intriguing to me why because it's's it's about really opening it up and making making investing available to the public but then for the private markets which traditionally the public had been locked out from so so that that really peakd my interest.

04:48.13
Peter_Paul
And and at that time this was around 2014 so I spent a couple of years in Canada got is sort of an understanding of the lay of the land. How works here. How to also work with securities regulation which is pretty complex in in Canada I thought hey this this actually can be done. This is exciting. This is about something new and. And and truly creating a market and opening it up to to the public. So that's where the front fund their journey started and where of course ah then you have to start putting the the piece of the puzzle together. But um, and you know start engaging with regulators and start sort of. Discussing the idea of creating a platform and opening it up which at that time so around 2015 really was was nonexistent in North America I would say it was really in the early stages. So so yeah, so that's sort of bit of a journey where I thought this is exciting this makes sense to me. This is really this is a purpose where we. You know, enable startups to to tap a pool capital. That's traditionally they was you know, ah not accessible to them and on the other side of the marketplace to basically invite the public to invest in companies from the very beginning as supposeded to typically you know angels fecs and other. Typically already wealthy investors that have access to invest in the early days and where we all know that companies do well where there are significant returns and then finally when a public company goes public then the public can participate and we all know that the huge returns have already been realized before that. So yeah, that is basic a result.

06:17.60
Peter_Paul
Yeah, I'm going to get my teeth into this and and this this excites me.

06:21.18
mike_flywheel
That's interesting. So your background was primarily banking and so you understood the backgrounds of banking but not even in Canada which is interesting and I want to get to that aspect of you becoming an entrepreneur in a new country. Um, but you know you started this this journey. in banking. um in banking did you ever work with startups previously in any of your roles in Europe because it sounds like when you came here, you started working with companies to help them raise funding but was that part of your roles at those banks also in Europe and and that's sort of where the the first bridge. Or conduit to this potential idea came to life. Okay, so.

07:03.69
Peter_Paul
No No I was actually in banking. No I was doing. You know, totally different ah things within the banking. Ah, ah you know the bank I work for and actually. You know and I was still working for the bank around the whole you know 2008 financial crisis which was quite interesting actually to see from the inside of the bank also to see how to be honest, dysfunctional the industry is in my opinion. How to find that the the banking industry and and really some serious serious problems. So i. But I know I was actually dealing more with you know, larger ah corporate corporate clients I was also involved with you know with with with with larger. You know, project financing with secureization in Intocy enough you know mortgageization One of the things that ultimately you know, Ah. Brought all thing down in 2008 but this was more of a so prime in in the in in the in the Us but you know so I was I was not I did all sort of different things except really working with this small startup. So So it's not necessarily that there was sort of an exposure there and thought yeah it's more what I want to do it. It was clearly. For me. Ah, like yeah, it's it's it's time to move away from or move on I move on from from really the large you know corporate banking world to sort of hands-on um, hands-on finance and investing with with startups that simply need money to.

08:30.50
Peter_Paul
You know, grow to to to develop an idea and to grow their grow their business so it was really in that respect in a ah new. Ah, new chapter which obviously I got exposed to when I started working with companies in in Vancouver and and also you know that the whole. Going into or you know finance investing from an entrepreneurial perspective myself was also something I got excited about but that was definitely a new you know a new journey.

08:54.89
mike_flywheel
Interesting. So it was kind of just this this next chapter if you would but now had you ever thought you would be an entrepreneur or are there other people around you that have started startups that were influential and you even considering this like. It sounded like you were looking for that next chapter that was going to take you outside of the traditional banking world. But for for most people that isn't to become a founder or to to start a startup and so is there someone or something that might have influenced that or was it just frustration in this problem that you started to see. Once you were in Vancouver working with people to help write raise capital.

09:34.40
Peter_Paul
And yeah, that's a great question and I you know I it's interesting. You know you you you you graduate and that you kind of you know, did my internships as I said I was at that time you know, intrigued by banking and find a finance industry in general and and so so you sort of. You know if oh well that's that's something I want to sort of get into and and and and and and and so I you know start engaging with with with with banks and looking opportunities in in that in an industry. Um. Actually before that even before I graduated I did also at this was a university where you know be on a site study. You can usually do all sorts of different things and 1 of the things I did there was ah founded with a few few fellow students and a sort of cons consult to see your organization this was in ah in the university of rotaba and the Netherlands. Was basically helping you know companies with take care you know projects and what what this organization would do is was a foundation actually was you know then you know acquiring these projects and then hiring students from from campus to work on that who would actually they would actually make a be bait make money make people. Good money actually and we did it more for the entrepreneurial side of it and it was based on the on the french ah model and and so we we established that foundation in in in world to them and and so I guess that was ah an exposure to actually building something from scratch like really you know.

11:02.14
Peter_Paul
Get the yellow page start calling companies hey wherere these guys at the calledta dom and you know you have a project for us and you know and I remember that first time when actually do have a project this was for the the realways ah in in Europe to actually map out the realways and and and and for particular. Project on on on that and and so it was all really a lot about data research. But you know obviously at first success is just amazing. So I guess that's sort of so oh that's doing something from scratching from on the perspective that's intriguing. So I guess a sort of shelve that start working with the bank and then I got sort of eager and say hey you know? ah. I I want to do something with that. So. It's interesting of the cul of I mean I'm intrigued by sort of the banking and finance I'd like to do it though in a different sort of capacity more hands on and and for more entrepreneurial capacity. That's that's what I definitely think sort of um. You know, led me to further explore the opportunities here here in Canada and also when you then sort of look for a say. Actually there is a problem here and I think we can. We can find a solution for that. so so yeah it's it's really a combination of finance and banking I like it but can we do it in a different way. Ah, combined with sort of an entrepreneurial eagerness that probably was sort of you know under surface already.

12:22.32
mike_flywheel
Well, there's 1 final step of this which was you just moved to a new country. how how I mean that's probably not the most natural path right to move to a new country and start a startup like that that feels like a lot of variables that you're managing. At the same time what were like maybe some of the most um beneficial aspects of doing it that way and I know you've already referenced a couple times like things you saw happening in Europe that you didn't see once you came here to to Canada and North America

12:46.19
Peter_Paul
Um.

12:58.89
mike_flywheel
So maybe there's elements there but then also like what was the hardest or most challenging part of you know, being in a new country understanding new ways of how things work but also trying to build a startup within that ecosystem like talk to talk to us a little bit about that.

13:14.97
Peter_Paul
Yeah I mean looking back. It was ah you know it. It was definitely ah moments where I asked myself like you know why do we do? I need to make it so difficult right? because you're combining a lot of different things at the same time and but there is also flipside to that I think is that. Is that you know the the whole and this sort of intrigued me as well is that is that and that's why in in general Canada is and is an immigration country where where people you know start build new futures and is is is is very interesting and and the fact that for me personally. Ah. You know you pick yourself up out of sort of a comfort zone which I had back in the Netherlands and you know in all respects by home. You know, move over with the family quit the job and and then start from scratching canada and as mentioned you know landed in in Vancouver. Ah, and so so the thing is you you sort of have to. Yeah, you, everything's new. It really comes down to you know, just just go for it. Ah you know, build new contacts ah meet a lot of people ah different people you learn a lot and you learn the hard way as well. Ah, you know because.

14:20.53
mike_flywheel
Do you think that? Yeah sorry to interrupt. Do you think that made it like easier in some regards like you were already turning in a new chapter and so things were all new so you like it. It maybe seemed like you were already outside of your comfort zone because I think sometimes the jump to entrepreneurship. Is about stepping outside of your comfort zone. So if you were at home in the Netherlands you were in your comfort zone. Would you have started this versus maybe it was the situational element that why not everything's new. Why not dive in.

14:49.88
Peter_Paul
Yeah I think I think there's definitely an element of that. There's definitely element because you know if you do it something from comfort comfort somebody say okay, well let's sort of explore. So Maybe I keep my job and then I kind of explore a couple of things but when am I going to really jump and we're going to jump with both feet. You know you're kind of still like you're in this you know you're you're you're still in an in an you know in a situation that you're used to and and so if you sort of disrupt you disrupt that basically I completely disrupted that because there was no reference anymore I had nothing back to all hold on to. Ah, you know it's really starting all over Again. So I think that definitely actually helped insert. Ah the the mindset and and also to's say the the whole you know in general just basically moving on from the situation and start something new is is for my sort of personal development and. Is it isnt is really exciting opportunities challenging stuff for sure,, but's but but yeah I think just really cutting ah coming all the ties and and start all over again is is where you basically you know you have to so you you you know it unlocks a lot of. Energy you just to to to go for it and and to be sort of perseverant and and ah and and certainly when I started with this idea and I front fund and you you have conversations with people and I kind of you know, listening to and end sort of smiling like interesting good luck with that and you know and.

16:17.39
Peter_Paul
And and um and someone actually told me once said, well you know, maybe because because you're basically you know doing something new and and certainly because and we will speak about it perhaps later but you know doing something the new and particularly in funding and investing which is obviously regulate regulated environment. You know, ah where you have to sort of. Ah. Push the boundaries and and and you know get literally get the regulators on site as well is that Ah maybe coming from maybe being new and not being sort of having the legacy of being sort of fully aware of how challenging it can be and ah it may have been an advantage as well. Yeah.

16:54.39
mike_flywheel
Yeah, it's it's true like sometimes you come in without historical bias. But also maybe you don't know what some challenges would be until you are all knee deep in it and you have to deal with it and so it may have um you know, caused you to second guess starting this in the first place. Well let's talk about this.

17:01.10
Peter_Paul
Right.

17:10.98
mike_flywheel
Um, I'm I'm really excited to learn about front funder but we're on a show called pitch please so every single time before we dive into your business. We have to hear your best pitch please so Peter Paul over to you. Let's hear your best pitch around front funder.

17:22.21
Peter_Paul
Okay, Mike well everybody is familiar with the dragons then I'm sure where you have these these dragons sitting in their chairs and I get a stag of money next to them on a table and then they hear all these pitches and and so what we're doing with front frontners basically turning anyone. The potential in a dragon basically and the good thing is you don't need to have ah a big stack of money we basically make it accessible for everyone. So front frontner is all about providing access and inclusion on both sides of the marketplace so helping startups. Scale ups and later states private companies to raise capital from the public and the public really means anyone that looks at the company and say hey this I'm excited about the startup they're resolving a problem or perhaps I'm already a customer of the company and now I can invest for perhaps as little as two and fifty dollars or even less. So. That's what we're doing with front frontner and we basically build that entire process of connecting companies with the with the public online and enabling ah the public to to to invest and so we've been. We launched our platform in 2015. We're now operating from coast to coast. Ah, we've done over 150 successful capital. Ah, raising campaigns. We have a community of over 40000 investors on the platform. Um, and we typically help companies anywhere from raising around half a million

18:56.35
Peter_Paul
To it could be ten million or thirty million really later stage companies as as well. So ah, the bottom line is really front funders purposes to ah to democratize investing in startups to unlock a massive pool of capital for startups being from the public. Um, and and on the other side to to provide the public access to investing in these companies from the very beginning traditionally this was again privilege for angels vcs and a small group of investors and we basically say why is that why don't we basically open this up and enable anyone. To invest from the very beginning in startups and grow with these companies and obviously you know also ah receive significant returns on these startups.

19:46.59
mike_flywheel
That's I love the concept and I mean you you won my heart at Dragons Dentist why I started this show I could watch it all day every day now I'm not saying invest and I'm not worried about the drama but I love just talking. 2 startups and I focused obviously specifically on canadian startups in the ecosystem here. But I love hearing people's stories of like what drove them like what what is their background Did they ever think they were going to become an entrepreneur and what are they working on like there's so many cool ideas out there and to your point it is interesting this element of capital. Um, because especially as you're probably learning in in Canada there's a far different funding ecosystem which maybe we'll talk a little bit about that Today. There's a lot of support from the government in Canada but rarely to get things out of research stage. There's. Not as much capital available to help people get into actual market. Go to market funding sales but oriented funding take your project into you know something that's more feasible is not always there and so there's like some gaps in the system. So maybe let's start there like. You obviously helped in the fundraising element of companies before for a bit. What are the ways that companies that are you know from the earliest idea to to bigger companies in Canada and actually sorry maybe just before we go there front funder.

21:16.58
mike_flywheel
Focused on canadian startups north american where's what's your scope you said you're coast to coast in Canada but is it mostly for canadian startups today.

21:25.47
Peter_Paul
That's correct. So so we are focused on the canadian market. So we're indeed coast to coast in Canada ah the the capital raise so the companies on front front are predominantly canadian companies. We can also have help of ah foreign companies. That want to raise capital in in in Canada so on the other side of our marketplace on the investa side. We're indeed predominantly focused really on canadian ah canadian investors we have had ah us companies. For example, that also have presence in Canada say hey we'd like to also. Open up our capital rates to our canadian audience or perhaps customers or perhaps they have plans to expand New Canada we can help those those those companies by basically listing their capital raise on front front and opening up for canadian investors but indeed we are ah ah, focused on on the canadian. A canadian capital aging and and investment market.

22:17.84
mike_flywheel
Okay, so and maybe maybe let's start there like what are the ways that companies go from like idea to mega you know publicly traded company and what are the funding sources available to them today in the canadian marketplace.

22:32.79
Peter_Paul
Yeah, so you know from ah from ah from a early stage or from really in ah an idea stage typically companies would ah foers that may have some of their own capital that they ah put in on top of their you know sweat equity which yeah is typically the case of course. To go to family and friends you know and it's really the um, um, ah obviously on a trust basis to to raise capital and sort of a closer network and then and ah and then the next thing is you go to ah to the to angel investors. Um. And so that's sort of sort of the early stages so your own capital family friends and perhaps you you managed to get in a few angels in in the early rounds and as you progress if you get sort of ah ah, start. Ah, you know, validating your your ah so your your product market fit. And and and and you know continuing to and perhaps already you know generating revenues. Then of course you're looking for growth growth capital and again you may have ah probably not have more money sells you but you put in then you're going to look for other alternatives. Perhaps again in your your your network. Um. Ah, more angels and then at that stage you know vcs may also come into into into play. Although many companies are still really too early for feces really to to attract capital ah, good to know though that certainly in Canada there's also a significant um funding opportunities. You know.

24:06.63
Peter_Paul
Government grants. Um, you know across the country which are are really interesting and quite unique for for Canada. It's not something they have you know south the border. so so I would always encourage companies to also actively explore opportunities for funding. Ah, from from government and grantst cetera. It's all nonilluive capital right? So there's definitely something there and investors like to see that too if you go to investors say hey I'm already got you know a grant so secured and so if you invest in my company. You're kind of leveraging the funds that are already raised through through through through grants. That obviously makes it also interesting for um, for for investors right? because I see each investment dollar already perhaps matched with with government money. So so those are really in the in the early states of preee seat. Ah the the source of of of capital. But if you look at the. Size of that pool. You know if you look at the what the the naco which is a national angel capital organization network in Carolina as well as the cvca which is a Vc and private equity if you look at the pool of capital that's going into sort of pree seed is relatively It's small. You know for ah for for an aco we're looking at an annual base around 25300000000 per year and then if you look at the smaller deals for cvca another two 300 so the the pool is around 500000000 per per year for startups. This is relatively really a small pool.

25:34.54
Peter_Paul
So so that is definitely ah and let's say and and and and constrained on the size of the traditional capital pool and that's one of the problems of course that we we address with the with the front funder by you know, adding an entire new pool of capital.

25:52.75
mike_flywheel
It's interesting. So across that spectrum then so there's there's obviously grants. There's angel investing friends and family venture capital and eventually ipo. Um, where and now you said you know you help. Companies raise from half a million and and up what's sort of the sweet spot. So if I'm ah if I'm a startup listening or I guess if I'm even a potential person that wants to invest. What's like the style of startup or company. That would be on on a friend funder like what ash aspect of the market. Do you focus on.

26:24.56
Peter_Paul
Yeah, yeah, so in in in in terms of industries were industry agnostic. so so so any you know company an industry industry can really you know explore raising through investment crowdfunding and and we're always keen to have ah have a chat and see if we can and can help um in terms of the switchold in terms of capital raising side. It's typically between half a million to 2000000 in that sort of raise where where companies are looking for. Ah, for let's say for growth capital. So usually it's it's beyond an idea. It's not just pure an idea. So okay, let's you know, put it back together and then see if you can raise some money. There are typically companies that have a bit ah already a bit more to show and tell so they already have sort of ah you know ah started generating. You know revenues are around the point of initial commercialization. So and that's really important because then they also have literally something to to talk about a story and they can also back it up with hey this is where we are now we already have. X number of clients using our our product. We're generating extra revenues and now we want to further commercializing. So now we're look at the raise capital. So so they're companies that are ah are beyond sort of the idea stage and and typically around around you know commercialization and and and sort of advancing in. Let's say the journey of product market fit if you like.

27:47.51
Peter_Paul
Um, so that's in terms of the size so half minute to 2000000 but just to be clear. We've done capital raises for much larger companies. We're actually just now sign up a company that's doing ah a seriesc where we're part of so so obviously later stage right? and then don't raise everything through front funder. But then we're an additional source of. Of of capital together with let's say ah larger traditional traditional pools of capital in terms of the as mentioned in the industries where industry agnostic, but the the the companies that typically do well fit well on our platform or companies that are b to see consumer products. Ah, impact investing. Ah you know the the kind of ah companies that have a product and service. That's easy to understand for the wider audience and ah and and and and and therefore you know it's it's it's it's easier for for for investors to sort of. Associate with it. Get excited about it and and and invest in it. Ah so so yeah, it's typically b to c and I think that that that is also related to the sort of the stage of the industry because the reality is that investment crowdfunding. So what we were doing with front funder is certainly in Canada it's still in its. You know, early stages still in It's an industry its infancy and then you know as the industry grows and the investors get more more familiar and the the whole you know retail investors get more and more familiar with investing private markets. You know, obviously then they will also look at all sorts of different companies and different different industries.

29:18.93
Peter_Paul
Ah, so so yeah, it's ah so it's typically B to C and and companies that are on their way to sort of you know grow the business and looking for growth capital.

29:27.17
mike_flywheel
It interesting. So I guess that's sort of if I were to put it. It's sort of the seed precede something a little bit same timing or a little bit after where you would normally go to an angel investor but it's beyond the friends and family because generally friends and family are you're you're.

29:40.86
Peter_Paul
Yeah.

29:44.60
mike_flywheel
Pre Pre Product Market Fit You're still trying to build something to get revenue. So you're a little bit past there and.

29:49.57
Peter_Paul
And yeah, and just to add to that Mike yeah, and just to add to that Mike is that is that for a company you know this is this is ah a great opportunity. You know, think about companies that you know have a consumer product that already have a you know a customer base or or community. That's following them. You know? Um, why not engage those people they're already familiar with your product and they like what you're doing and now they can be part of your journey as a startup and in fact, they can also share any potential upside right? So for for companies. Raising through investment crowdfunding is not just about raising capital but it's also a great opportunity to create awareness and to around your your company your products and services and and and so it's a sort of combined marketing funding effort.

30:34.41
mike_flywheel
Got it. It's it's interesting. Interesting concept. So and you said today most are like a b to c because people can grasp it but there is possibly now or in the future. It doesn't nothing preventing it from b to b type companies.

30:51.60
Peter_Paul
Actually.

30:51.76
mike_flywheel
Um, coming on here I'm also just taking a quick quick look simultaneously a lot of them are like products or services. Not so much like software as an example, um, is that just because of similar things that you said which is today. It's just people can understand it and grasp it and it's a little bit easier or are you. But avoiding software in in your perceivable future.

31:14.93
Peter_Paul
No, it's exactly that first point you anyway. So we're not not. Ah you know, ah, avoiding any in the industries or whatevers. But but for example, you know, ah software as as a service it could be really great companies and you know to invest in them. It may. And we have we have examples of that we've done companies certainly in ah in the past, but it may be more you know more more more ah challenging to to or try to to appeal to the wider invest the community we actually with those companies already so always sit down and said. Okay, so so. What? what are the particular was the target group that is likely to understand this get excited about it and then we can have a really targeted ah plan right? So so we have had companies with ah you know? ah.

32:02.21
Peter_Paul
Apps that are software that helps. Ah you know and um and the medical industry and you know, ah where obviously ah professionals intimate in the industry will recognize that they understand completely the product as being the the problem is being addressed right? So So there's opportunities for that. You just need to really think think through and look at what is that. What is that Target group that is likely to want to have a look at this opportunity.

32:23.20
mike_flywheel
Makes sense now. Are there competitors in this space like I'm going to say their names.. Hopefully you're okay with it. But like as you're talking through this I'd love to understand and I'm sure it is but where it's different than like a go fund me or. Things of that nature are there competitors to you or are these similar but you are different and and and why and help me understand that a little bit. Yeah.

32:42.87
Peter_Paul
Sure. Yeah, so so go go fund me and for example, kickstarter and you go go there. There are great examples of of let's say it's traditional crowdfunding. So so typically it's about you know backing an idea. Ah, and ah and and or pre-purchasing a product and so sometimes they're donation based or or rewards based so excusely they're they're not there. You're not investing in in in in companies. Ah, you're supporting a company or a project or calls right. And that is a fundamental difference with with investment crowdfriending or recordy crowdfinging where you actually invest in the company right? So so it's it's it's it's an investment therefore it's also all regulated investment crowding fully regulated. So so one way or the other investors or or you know. Participants invest in investment crowd fraing always get get an interest a financial interest in the company with ah with a certain you know, ah upside. Um, um, potential upside in the future. So that's the that's the key difference with sort of the traditional crowdfunding. And then in terms of competition. There are are ah ah, platforms in the in the industry you know it's it's still an industry in it's in its let's say infancy c certainly in ah in Canada and and you know competitors other platforms is also a good sign. It means that you on to something. Um.

34:11.98
Peter_Paul
But it's it's good to emphasize again. The fundamental difference between the sort of traditional crowdfunding versus ah investment crowdfunding which is really about ah you know retail investors investing in private companies just as retail investors of course took and took took a ah you know huge. Jump into public markets. You know through online platforms like you know, ah Robin Hooth well simple in Canada ah you know and basically what we're doing a front fundner saying. Okay they so they're saying retail investors can also actually invest in in in private companies. So yeah, the investment. And the and the securities aspect of it is ah is a very significant part of of the industry. We.

34:52.82
mike_flywheel
Got it so instead of like the I'm buying some of your earliest version of I'm putting up money to buy the first version of your product or I just want to you know support that idea especially at idea stage in this regard. You're you're buying stock.

35:07.92
Peter_Paul
Yeah, yeah.

35:09.75
mike_flywheel
You're you're buying stock in a company that is not yet privately traded with fractional amounts Now Maybe let's talk through how that works let's let's take both Personas Let's start first with the investor if if I'm an individual um I guess could good companies. Also invest who who can invest and and how do they invest actually would be the the question that I'd love to understand.

35:34.56
Peter_Paul
Yeah, yeah, so from the from the investor side of our marketplace. Um, ah basically it's everybody can be an investor so whether you are. A young professional. You know you, you're You're excited about a company that you want to want to invest and be part of and you want to invest ah perhaps $200 or $500 We're there for those those and those investors. Um. Larger investors that that perhaps are you know, experienced with investing in private in private companies and make larger investor investments. Ah they're also welcome on our platform. It's really about democratizing. Um, you know the investor ah investing in private. Companies for for for the wider investor Community really? So they're all Retail Investors Smaller investors larger investors but to your point there are also you know companies that that look at the opportunities on our platform and and we're very interested in that because the you know opportunities to basically. You know with investment crowdfunding with front fundners not sort of displacing traditional Capital. It's actually adding more capital to the table right? am I a strong believer in how those those different source of Capital can go hand in hand right? and actually expand the the Capital Pool. So So from the invest side. It's really, ah.

36:58.84
Peter_Paul
You know Emphasispha is retail investors just to give you an idea about 75% of investors on our on our platform are our so-called Nonredited investors are really small retail retail investors and then 25% is are accredited investors which is typically investors with certain meet certain income or or financial assets. Thresholds and and which may also include angel investors right? or or high net worth individuals or you know, really? Ah, ah, larger investors so we see a mix of of all sorts of investors on on our platform and and the exciting thing mike is that you know if you're a retail investor and. You can invest in it for as little as a couple of hundred dollars in companies you you can actually create a portfolio in in startups for perhaps you know five Thousand or ten thousand dollars and you can you can invest in 10 or 20 companies

37:52.61
mike_flywheel
That's cool, super cool. So you could do it obviously as a retail investor an individual with a couple hundred dollars you could also do it if you were an angel and you wanted to do some through this platform as well or if you had a company and you wanted to invest on behalf of that. Company or small business and you wanted to invest in some interesting startups. You could do that too. Um, now and I guess it ranges you're saying as little as two hundred and fifty dollars I guess it ranges depending on who's raising and how much they're raising There's probably a minimum but it could go as low as two hundred and fifty dollars

38:09.26
Peter_Paul
Yeah.

38:21.33
Peter_Paul
Yeah, totally, it's it's typically up to the company. So the capital raises and where they you know where they want to set that minimum investment on our platform obviously because you know we're all about you know, making accessible to to the wider. Investments investor community including the small investors. So so typically the minimums are around two hundred and fifty five hundred dollars sometimes they said it $1000 or or higher but you see you know investment range is indeed anywhere from two hundred and fifty dollars to invest investors that invest you know $100000 or or more through the platform. So. It's really a ah ride wanes and and it sort demonstrates to inclusive inclusivity that we're pursuing right.

39:03.50
mike_flywheel
That's cool. Um, now talk to me if I'm ah a startup or yeah, you're still a startup at this stage. So if I'm a startup looking to raise some capital I've got product Market fit it sounds like I also should have some revenue regularly paying customers to be able to to break in here. Um, but maybe ah maybe I'm assuming so who if as a startup who should um, get started with front funder. Um, we've kind of talked about the the raising ranges but like what are some of the other criteria and and how does that process work.

39:35.57
Peter_Paul
So yeah, yeah, so we did so we talked about sort of the rangeing could range criteriaier in terms of of the the capital looking for. So so so again, typically you know anywhere starting from half a million to up to 5 or to 10000000 that's ah that's ah you know that that that range um in terms of you know companies that are as you mentioned that have you know have have traction and that's really important because then they can you know then they can talk about and pitch that to to the wider investor community and what is really important companies that are ah. Are are recognized ah and are and are interested in raising from the wider community. So ah, if you're purely looking for capital and um and you're thinking you know I I go through some angels or pitch with vcs and maybe list on front front the two you know. Who knows maybe it works and maybe to give me a call when the money is in. That's not going to be a good fit so because it's really, ah, you know capital raise you really have to ah jump in with both feets and recognize that you are. We're provide front front of provides a stage for you. To go out there and broadcast your investment opportunity to the public right? and to broadcast obviously to our own commute to the front frontner community as well. But it's really important a companies understand that that it's that is actually you're really going on stage you're running a campaign from from preparation to the final day of the race.

41:06.48
Peter_Paul
And that's a lot of work and and you so you need to sort of feel excited about that and appreciate the value of hey if I go to my own customers now with with the opportunity to invest in my company and I'm going to attract a whole new group of investors. Um, you know I'm excited about that as a startup that. That creates awareness and and you know and those people will will you basically raising through front funder you, you're not only getting investors but you're also getting brand champions right? people. So and people have literally a vested interest to share. So hey I you know invested in this company and check it out and I'm already a customer and I invested too and you know so so that is really important that companies understand that they're not outsourcing funding to to their funding to front funder but that they basically ah you know that we work in partnership. Ah, to to really reach out to the wider wider investor community that is really ah, really important and that's why when we engage with companies. We always ask about you know what?? what are your? Obviously what are your funding Goals. What is your. What is your community like do you have a community that we start start leverage because but what is really an important success driver for a campaign is is that once you go once you launch your campaign on front funder that you can always show traction. That's why typically when companies launch on a platform they already have traction in terms of.

42:33.00
Peter_Paul
you know, funding ah you know ah ah funding they're getting to their funding targets with around twenty twenty percent right so they already show sort of. Okay, we're on our way, we're already getting invested jumped in and now going to bring more investors in those are really, ah, important factors for a company. To consider exploring you know investment crowdfunding as ah as a source of raising capital. Yeah.

42:55.52
mike_flywheel
Got it and so there is a bit of an intake process I submit saying I'm willing and interested to raise the front funder but there's a bit of an intake process on your side where you sit down with them. You understand their motivations their desires their goals here to see if it's going to be the right fit before it gets listed on the platform.

43:10.61
Peter_Paul
Absolutely and that intake is is sort of ah 2 twoold so indeed intake at the beginning. We kind of do a pretty a pre-screen and you know is there a fit for raising on on front funder. There's no point to proceed if we if we you know both sides are not sort of. Believe there's a good fit because it's just a waste of effort right? and and and it's too important to waste time and companies need to raise capital to build build their business. So. So so it's really important to to pre-screen and and and and and determine whether is a fit and then secondly what's important to note Mike is that or basically front front is a. Curateated marketplace so it's it's not that we just list any company. Also when we see there is a fit but we also perform do delaying on these companies right? So because on the investor side if you invest let's say $500 in a company. You're not going to go through a whole data room and you know, check everything out. So basically.

43:53.78
mike_flywheel
You.

44:05.75
Peter_Paul
We do with front frontner is not providing investment advice or Recommendation. We're not even allowed to do that. But what we do is basically want. Um we want to mitigate the you know the risk that investors shouldn't be exposed to so we do check like oh the companies all the paperwork in order. They are properly incorporated. Ah, you know what are their plans with the capital they're they're they're raising. Does it all make Sense. You know we do background checks on um, um, on on founders and other you know, principlesvolving the company. So So that screening element is is really important. And we complete that before we bring companies on the platform.

44:41.15
mike_flywheel
That's good to know it's an extra piece of mind for those investing that some like to your point for 250 or $ 500 I'm not going to spend hours checking out the background of everything on this company so in some regard if they're listed on the platform front funder has done some of that on your behalf. It's not. Financial advice that hey this is going to be the next unicorn but you've made sure that the things are in order to make sure that your investment is is safe um in something that's not a scam. Ah.

44:57.16
Peter_Paul
Right.

45:04.86
Peter_Paul
Yeah, it's yeah, that's not a scam exactly and and as I said I you know choose my words carefully years that we're basically ah you know mitigate that risk right? We can never eliminate. We can certainly not say say this is a safe investment. In fact, the real is you are investing in.

45:14.81
mike_flywheel
Um, yeah.

45:21.89
Peter_Paul
In startups and and startups scary Obviously more risk like where they they may not even be around you know have reached a point of product Market fifth and all that So we we we take. That's really serious in terms of you know, Providing. Investors Ah you know, proper information so they can make an informed investment decision including you know, saying look these are these are early states investments These are ah risky investments and the more reason ah for for you to to to offer opportunities to diversify right? So if you're excited about a company. That's fantastic, but you know should you put? really let's say you got $5000 that you're looking to invest in private companies. You know, maybe you should invest a proportion of that in this company and look for other opportunities in startups to diversify it. So That's really important. Yeah.

46:10.00
mike_flywheel
Makes sense. Um, so obvious question where how does front funder make money.

46:15.32
Peter_Paul
Yes, yeah, so so how front funnel makes money. So basically we ah we charge capital raisers on the on the platform. So capital raisers pay us basically in upfront doji listing fee. So so and it's anywhere between typically about five thousand to ten thousand dollars it depends on the on the let's say the structure of the capital raise and so we take the company through a due diligence and you work with with our campaign management team to prepare your your campaign and. And and and so that's ah, that's sort of the the those are the upfront cost and then the the the second one is is the we days basically take a percentage of the ah of the funds raised through our through our platform which is typically in the range of 6 to 8 8 % ah, on the on the capital capital raises so that those are the issuers capital raises and on the investor side investors investors pay a a ah 1.5% fee through investments or through the platform which is kept of ah of a hundred dollars

47:26.27
mike_flywheel
Cool I like it so there's there's a piece of what I like also about the business model and this is something I get super interested in is you've got something upfront to help secure the energy and in the listing you got a um variable based amount. On the value of the total raise but it's a fair amount. Definitely much fair than like a seat geek that takes like 15 % from all sides. Um and then the investor has a small fee but obviously they're investing smaller amounts of money and you don't want to. Disincentivize them from investing in this space by them losing 5 10 n twenty points off the top so you've obviously made that super nominal to to get into this space. So super cool now. Um. What? what's been sort of like your favorite part about this this journey. You've been building a new company in canada helping empower other startups is there like a memorable moment or something that really stands out for you since your your start of this in 2015.

48:26.63
Peter_Paul
Yeah, and there've been you know several? ah you know, memorable moments. Um, you know, along along this journey and and you know, ah yeah, an example of of a of moments itss israeli exciting because it's sort of the validation of. Of of you know what we're you know of our purpose with front fundner is is a company that actually ah and it's a ski resort in Bc it's called red mountain. And they raised they raised on front funder and this is example of a company that raised on front fund for canadian investors but they also listed on a Us platform to raise from us investors because it's close to the borders sort also have a lot of um us visitors and. And so basically they offer an opportunity to sort of own a piece of the mountain right? So so really the opportunity to invest in ah in an in ah in a relatively small ski ski resort and I remember participating myself as well in that in that race. So as an investor through frontfalner and and I remember going there with ah. With ah 2 two red mountains and with with my ah with my family and and the the cool thing is with with the raises and and didn't mention it yet. But we can be quite creative in terms of you can invest in company you can attach perks. So if you invest invest in a certain you know beverage company. You can say okay, invest $500 and you get a box of the.

49:43.81
mike_flywheel
Mean.

49:51.42
Peter_Paul
The drinks and you know and you invest the 2000 you get sort of a annual subscription or something like that they did a similar thing with red red red mountain you invest a certain amount and you get you know ski tickets or you get a seasoned pass or you can even get design skis actually as though I receive a pair of of design skis with a red mountain logo and all that. So. I was there in my family and I was in the ah in the ski live and um, my my my family ah the the church in front of me and I was having a chat with this. Ah. Gentleman in the in the in ski and he started talking. He said he asked me like hey if you have be before. So no, it's first time and and then he continued he said well it's pretty cool. He said you know they're um so at mountains now raising capital and they're actually raising on on a platform and and he was really well at first he had good front funder and so you can invest in India in. You know a company in the red mountains through this platform and ehelma that's interesting and of course you know I want to learn more about his experience right? So so he was explaining how how that product how the the process works and how you sign up, you have to ask a couple of questions because you know again, you know there's a certain know your client the kind of ah ah. Onboarding process. He was explaining that and then how he completed his investment they said yeah, it's pretty intuitive. It's all very straightforward and so and then at the end of the of the ride of so actually you know it's really interesting here that because you know I I know front funder very well and and it was sort of funny to hear not only his experience but but.

51:20.18
Peter_Paul
Just really an experience from a user right? and and ah yeah, totally totally And of course he you know I didn't like the kill the rabbit out of the head yet by saying oh yeah, no I know that's it's actually my company and.

51:21.34
mike_flywheel
Yeah, and his willingness to share it.

51:33.46
Peter_Paul
But that's that's just huge validation for for for what for what we're doing and people get excited about the fact that they can that they have that opportunity right? So yeah, that's what it's 1 other example and another example is you know a company that and that actually raised own front funder and um. And and then fairly soon after but within 3 years went public and so which was a great success story and so where investors had a you know significant return on their on their investments again. 3 years is really soon typically it easily takes 5 years or you know or longer and but but yeah, that was the first mousestone of. Of look I was able to invest in a company early stage for as little as you know $500 I think their minimum was even hundred dollars and now I've got a you know thirty thirty forty times return so yeah those are exciting stories that sort of valid use validation and testimonials for. For what we're doing.

52:29.68
mike_flywheel
That's that's super cool Now These are the good stories. Obviously there's been probably bumpy at the safest word parts along this journey I especially imagine around the regulation of this space. But what sort of has been the most challenging. Um, element of of getting this going. So.

52:46.00
Peter_Paul
Ah, yeah, sort of regulation for sure and let's not get into that the 2 2 d but but you know it's also it's part of if you do something new and you do it in an environment that is regulated and I'm not against that I think this this industry needs regulation. But do we like it or or not um so so it's kind of what I signed up from from beginning right? like you want to do this is innovative. You're going to spend significant time to talk to regulators and get their comfortable what we're doing here. So yeah, so that was ah that that took quite some time before we could even launch launch the platform and it still does even today where. We're we're working on something new where again we have to you know work with regulators and that that can that can take ah take time and also you know in Canada we don't have one regulator. Ah, federal regulator we have you know 13 regulators so it's it's ah each province has there has their own regulate. So that's definitely ah, um. Ah, challenging and sort of ongoing but we also made great progress. We have harmonized investment crowdfunding rules in in Canada from coast to coast and you know so it is opening up and and great progress made. But that's that's been a lot of work. Um, and then the other thing is you know what is. Challenging and and stay where you we're ah you know I me just building a new company with front frontner. But you also basically building a new market right? So the whole advocacy and education around this is has been a lot of work right? So it's not like okay you know here's here's here's front fund and.

54:16.50
Peter_Paul
Here's what we do, but you have to really sort of take a take a step back and and and explain what investment crowdfunding is both to companies. How does it work and to investors like yes, you can actually invest in these companies from the very beginning and now you don't need to be an angel investor and you know so the whole aspect of of advocating this. Industry in general. Certainly if if if and and I've been. You know we've been pioneering this from the very beginning that's been no all the work for sure. Yeah.

54:41.51
mike_flywheel
Yeah I can I can imagine sounds like a lot of uphill battles. But it sounds like you guys are doing amazing I mean 2015, we're now just on the cusp of 2024 so you're just cusping on about nine years. That's amazing time in the life cycle of a startup in Canada obviously. Um, you've got a number of great listings that I was just kind of cruising as we were talking through this and I was looking at them before the show amazing platform and and it's truly helping canadian companies continue to grow and and expand their reach and I love the today is consumer focused. But I you know can't wait to see all of the other. Categories that this evolves into and and makes it more widely available for canadians to help um grow these these startups now. Um, if people are looking to find out more or want to help is there any help that front founder is front funders is looking for right now. Um, or if not where can people go if they're a startup or an individual investor to to get started for.

55:44.00
Peter_Paul
Yeah, absolutely so. Yeah for I would say it's all all companies and whether you're an early stage company looking for prec capital or your company well in its way and looking at ah you know at ah at ah at a large round of financing. Um, and like to explore you know, alternative routes which would surely today in today's funding environment is is more you know relevant and important than ever I would say absolutely reach out to us go to our our website frontfoner.dotcom a can you know find info there to ah. To get in touch with with us so for for for companies always keen to have a chat and and see if we can help see if there's a fit and of course for investors for the public. Anyone basically who's who's you know, excited about this and interested in exploring investing in in startups. Ah. I would say you know start a journey and and and you know inform yourself about about this opportunity. There's lots of information frontfront dot com for for investors as well to to sort of get familiar with with how this works and yeah. Sign up on the platform and get our newsletter and explore opportunities.

56:53.50
mike_flywheel
That's super cool and just and we'll link it in the in the show notes and description but obviously front funder is frontfundrdotcom just make sure you you remove the last e in front funder. Um, but amazing platform doing a lot of great work. Ah, thank you for sharing. You know your story Peter Paul today thank you for sharing the story of the work that you're doing It's a super cool story of you know your your risk taking from coming to Canada to starting a business to growing that business to something very successful over the last nine years is is very inspirational, especially for someone that. Never really even knew they were going to be an entrepreneur just had a spark back in the day any any closing words on on your side today.

57:34.87
Peter_Paul
No Mike I Want to thank you for his opportunity was great. Great You know chatting with you but it's this exciting space of of investment crowdfunding and opening it up to the to the public and you know providing a new pool of capital for a file for entrepreneurs and and yeah I would I would. I would say as as as mentioned for for for companies investors I have have a look at this this is where it's going. We see that in other geographiess where it's already really mainstream where Retail investors are fully. You know, vested at participating in the Private Market. So. So Yeah I look forward as we continue our journey Thanks for having me. Okay.

58:13.72
mike_flywheel
I I can't wait I'm sure I'm going to start checking some out and I'm sure I'll drop a couple investments in there myself to be a part of the a part of the journey. Thanks again for joining today. Peter Paul thank you everyone for listening. Hopefully you go check it out I think this is super interesting if you like listening to pitch please. It means you are listening to either understanding how the canadian ecosystem is going how these startups are doing so you're either a startup that might need this or someone interested in this space that may want to jump in so check them out and we will catch you all on the next episode. Thank you.

58:44.87
Peter_Paul
Thank you.