Toronto’s The Funding Portal has a business of helping companies connect to government support programs and some private-sector funding, but now they’re taking that a step further.
On May 13, the Ontario Securities Commission approved the company as an exempt market dealer, meaning companies can now use its online portal to sell securities.
“The problem we’re trying to solve is access to financing,” says Teri Kirk, the company’s CEO. She says many companies struggle trying to find the right angel investor or venture capitalist to invest in them.
Her goal is to make that easier, The Funding Portal has aggregated data on 2,500 angels, VCs, along other private sector investors and funds.
When the company first launched, Kirk says she thought the problem in the marketplace was that government programs were difficult to understand and navigate, with information spread out across thousands of web pages.
But after a couple years, she realized that “a very important part of it is access to private funding,” she says. When companies look for government grants and contributions, they often need to put up matching funds.
“Companies need to come to the table with money,” she says.
According to Kirk, that’s what makes The Funding Portal’s offering unique: it’s a single place to secure private sector and public sector financing and it’s all online.
That makes The Funding Portal the first online exempt market dealer in Ontario and the first online business in Canada that connects companies with both public and private-sector funding.
There are some restriction who companies can use The Funding Portal to sell securities to. Current OSC regulations only allow “accredited investors,” generally high income or wealthy individuals, to buy exempt securities.
But that is likely to change, the OSC is eyeing several new exemptions that would allow more ordinary investors to participate in the exempt market.
One of those is an equity crowdfunding exemption and while Kirk says the funding portal doesn’t have a plan to become a equity crowdfunding portal, she’s not ruling it out.
Equity crowdfunding “focuses on money for companies at the idea stage,” she says and, at least for now, “we’re focusing on companies that have some infrastructure around them.”
Still, she’ll be watching the new regulations closely when the OSC starts rolling them out and she says that if there is an opportunity for The Funding Portal to be a “one-stop shop for funding,” it’s something the company will explore.