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FIRST DEAL CLOSES USING START-UP EXEMPTION

Posted by FrontFundr on September 25, 2015
FrontFundr

VANCOUVER, BC (September 25, 2015) – This week marked a milestone in Canada, with the close of the country’s first ever deal to leverage the new start-up crowdfunding exemption. Guusto raised $50,000 from 18 investors via FrontFundr—a financial technology platform that utilizes a diverse range of fundraising methods, including the new start-up crowdfunding exemption, in order to connect startups with hard to access capital.

The start-up crowdfunding exemption, which was introduced last May, allows regular people to invest up to $1,500 in private companies in exchange for equity. Guusto is the first Canadian company to use the new exemption where regular investors could invest as little as $500.

“The start-up crowdfunding exemption gives regular people with limited investment capital the opportunity to invest in businesses they care about, and presents a low barrier to entry into investing,” says Peter-Paul Van Hoeken, CEO of FrontFundr. “At the same time, FrontFundr is an exempt market dealer that leverages numerous fundraising techniques, helping private companies secure investment from accredited investors as well.” This opens the investor pool, casting a wider net and helping start-ups secure the capital they need to grow. 

“The money raised from this equity crowdfunding campaign will go toward expanding our customer base over the next six months with the goal of breaking into the U.S. market by the first quarter of 2016,” says Skai Dalziel, co-founder of Guusto. “It also means we have a variety of investors who care about our company. The seasoned investors have experience helping other tech businesses succeed, and the regular investors are typically people who use and love our product.”

FrontFundr’s approach to raising funds is unique in that it brings together both regular investors and the professional investors, and it’s working. The Guusto deal was the first of its kind, and it came in 200% over the funding goal. “It’s exciting to see new channels opening for investors and entrepreneurs seeking investment, and it’s no surprise,” says Vancouver-based lawyer, Michael Reid.

In total, six provinces have opened up opportunities for new ventures to raise capital from the public with the introduction of the start-up crowdfunding exemption. Now, the Ontario securities regulator is contemplating new rules around investment crowdfunding as well. These types of exemptions present exciting new opportunities for both investors and entrepreneurs across Canada. Twenty-one more companies are listed in FrontFundr’s Prospect Lounge, hoping to be the next to close a deal like Guusto’s.

FrontFundr is a registered exempt market dealer (EMD) and conducts stringent due diligence on all business investment deals presented to its investor community, and ensures both investors and entrepreneurs understand the risks and rewards associated with entering into a transaction. Visit FrontFundr.com to browse live investment opportunities.

For more information or media requests, contact Jeannine Bartz at jeannine@frontfundr.com or 604-306-0207. 

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