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The year 2023 marked a significant chapter for Canada's equity crowdfunding sector, showcasing its pivotal role in the entrepreneurial ecosystem, especially during market downturns.
Funds Processed
Successful Raises
New Investments
In 2023, traditional venture capital and angel investors contributed to only 1,341 companies. This stark contrast highlighted the need for diverse and accessible funding channels.
Following the declining capital markets many traditional early-stage investors such as Venture Capitalists have been retreating presenting an opportunity to rebalance their influence in the industry.
Historically, retail investors faced barriers to enter the private markets. However, with 12.3 million Canadians already engaging in public stock investments through online platforms, FrontFundr facilitated a bridge to private market participation.Recognizing the potential of private market investments, the call for optimized portfolios allocating 10% toward private markets gained prominence. Notably, private market investments demonstrated a robust outperformance of 12.4% compared to public market counterparts.
91% of alumni companies are still operational or have experienced liquidity events. This impressive statistic reflects the resilience and growth of the companies that have been part of FrontFundr’s ecosystem. Several issuers are exploring potential exit opportunities. Whether through acquisitions, IPOs, or other strategic moves, these companies are positioning themselves for success in the future. Recently, HEMPALTA announced their intent to list on the TSX in Spring 2024 and Liquid Wind is working towards an acquisition later this year.
In an era where environmental consciousness is paramount, sustainability has become a central theme. Companies seeking funding are increasingly aligning their business models with sustainable practices. Investors are showing a strong interest in ventures that prioritize environmental, social, and governance (ESG) factors. FrontFundr’s platform is witnessing a surge in sustainable startups and impact-driven initiatives.
Wineries, breweries, and distilleries are a promising sector. These businesses are capturing attention due to their unique blend of craftsmanship, local appeal, and growth potential. In 2023, we saw the category grow with a total of $562K in funds raised from 333 investors.
2023 witnessed a notable increase in deals focused on raising capital privately to their community. These private deals, primarily in Finance and Real Estate, consisted of companies raising from a limited number of investors in their network and using FrontFundr’s EMD+technology platform.
FrontFundr's release of version 2.0 in 2023 marked a significant milestone, streamlining the investment journey by increasing KYC efficiencies and user experience. The platform enhanced issuer analytics, adopting GA4 in July 2023, providing raising companies with more comprehensive insights.The introduction of credit card payments proved immensely successful, constituting 68% of the total payment volume and 31% of the payment amounts.
FrontFundr's introduction of the "Coming Soon" phase is a game-changer, allowing companies in the private phase to generate excitement and anticipation within their community before the official offering launch. This strategic approach not only facilitates raising the initial private link threshold but also builds crucial traction for when the opportunity goes live. This phased approach empowers issuers to concentrate their efforts and ensures a more focused and enthusiastic investor audience at every stage of the campaign.
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FrontFundr's podcast release, "From Funding to Fame," is a foundational element in our commitment to providing valuable insights into the entrepreneurial journey. This venture encapsulates the essence of our mission to empower and inspire both investors and entrepreneurs. Through engaging conversations, the podcast explores the intricacies of the fundraising process, shedding light on the diverse paths entrepreneurs navigate to achieve success and recognition. "From Funding to Fame" not only amplifies the voices of those in the startup ecosystem but also serves as a knowledge-sharing platform, fostering a deeper understanding of the challenges and triumphs inherent in the world of fundraising.
In 2023, FrontFundr embraced the spirit of giving through our 'Capital for the Community' initiative, amplifying the impact of investments during the festive season. During the 15 Days of Christmas campaign, investors were encouraged to make a triple impact by investing in community campaigns. For every investment made, FrontFundr pledged a 2% donation to Covenant House, an organization serving youth experiencing homelessness. The campaign culminated in 133 investments, generating $309,503 in support for remarkable companies and contributing $4,390 to Covenant House. The donation facilitated critical services, including warm meals, holistic support, medical attention, and protection from extreme weather, benefitting youth in need.We express gratitude to our community for collectively making a significant difference during these challenging times.
To set the tone for 2024, FrontFundr underwent a comprehensive rebranding initiative, redefining our logo, messaging, mission, and vision. This transformation aimed to align our team with an evolved vision of revolutionizing not only the private capital markets in Canada but also extending our impact globally.
As an inclusive hub for entrepreneurs and investors nationwide, our imagery reflects an ambitious entrepreneurial spirit and drive, emphasizing innovation within Canada's diverse sectors. This rebrand solidifies our dedication to fostering a dynamic and accessible ecosystem for wealth creation and capital deployment.
In the realm of venture capital, the landscape is distinctive – investments are often locked in and the investment horizon is typically five years or more.In light of this, reviewing past investments becomes a catalyst for enhancing future investment decisions. Here are some statistics:
We’ve just scratched the surface of the private capital markets. There’s the potential to unlock $1.5B in capital for startups and growth-stage businesses from the Canadian market. This would represent only 0.5% of the public’s annually accruing investible assets in startups.
This year, our primary focus is on introducing new features and services designed to elevate investor engagement, fostering repeat investments annually, and driving valuable referrals to expand and strengthen our community. By prioritizing shareholder communications with alumni companies, we aim to keep investors excited about their investments, keeping them up to date on the businesses they've invested in and their journeys.
Early and Growth-stage companies need capital and their network is global so they need a solution for accepting investments globally. Investment into pre-seed, seed, and early seed-stage companies make up nearly 81% of all transactions in Canada while the majority of issuers on FrontFundr have international investors to process but must go through their own legal.
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Monthly contributions across all deals on the platform can increase investment transactions and create monthly recurring revenue through investment transaction fees.
