Our Due Diligence Process
Investing in early-stage companies is inherently high-risk. This fact, coupled with the diverse range of businesses raising capital on FrontFundr’s platform, means we cannot prevent situations which may lead to the loss of capital for any individual or group of investors. Only 51 percent of small and medium-sized businesses in Canada survive more than five years. As such, the opportunity to produce returns as an early investor must be equally balanced with the possibility that all the capital you invest may be lost.
FrontFundr does not favour or endorse any businesses raising capital on our platform over any other, nor do we provide investment advice to potential investors. We strongly encourage all FrontFundr investors to undertake their own due diligence and seek guidance from independent professional legal, financial and tax advisers before committing their capital to any company.
- Review of the company’s incorporation documents, existing Shareholder Agreements, Subscription Agreements or Investment Agreements;
- Review any known commercial loan agreements, convertible loan instruments and any director and/or shareholder loan agreements;
- Review of management history and current activities;
- Review of any intellectual property rights;
- Review of the share registry and capitalization table;
- Request information on any past, current or anticipated litigation;
- Search of available information from civil, criminal court or bankruptcy records;
- Search of available information from regulatory authorities;
- Review of provided financial information;
- Review the company’s forward-looking statements and associated marketing materials, business plan or pitch deck;
- Review the company’s valuation and any associated revenue projections; or
- Request additional documentation and verification to support 3rd party relationships, service providers, users or customers.
We Do Not
- Set the valuation. The company decides to price their investment offering and ultimately investors decide if they are willing to invest at that price;
- Audit financial statements or any special purpose engagement of the company;
- Conduct sensitivity or scenario analysis on financial forecasts;
- Review content of investor events that are not organized by FrontFundr;
- Provide legal, financial, valuation, or accounting opinions;
- Provide any form of assurance or opinions on a business;
- Assert that investment documents used in the raise are appropriate; or
- Make claims asserting that an investment is safe.
- Carefully read all information on a company’s profile page and within the offering documents;
- Review and consider the risk warnings; and
- Recognize that many early-stage companies fail and that forward-looking statements and entrepreneur’s expectations may not materialize.
The Next Step
Now you’ve got a good grasp of the basics, why not take a look at our investment opportunities to see if there is anything that catches your eye!? Getting started is quick, easy and straightforward - you can make an investment starting from only $250 and in only 12 minutes!