Fundnel is a private investment platform that offers unlisted securities in growth and pre-IPO stage companies across industries to a qualified network of investors, comprising of both professional – corporate venture, private equity, venture capital funds, family offices, angel investor networks – and individually accredited investors actively looking to diversify their current portfolio.
Fundnel screens all investment opportunities to ensure businesses meet the minimum requirements defined by the Fundnel Factor – a proprietary data-driven due-diligence process analysing over 600 quantitative data points per company+ – before reaching its investor network. Fundnel’s network of investors perform further due-diligence before making an “Anchor Investment” in a particular deal they see value in. Only deals with a lead anchor investor will be listed on its platform, whereupon other investors are invited to join the investment round.
Fundnel is headquartered in Singapore and has a growing team of over twenty people spread across regional offices in Indonesia, Malaysia and India.
+ Historically, only c.10% of companies will be offered to Fundnel’s investors, whilst just c.3% eventually receive an investment – Fundnel’s technology enabled solution means that its investors do not have to spend unnecessary time and resources hiring large teams of analysts.
Private equity and VC-type investments have traditionally been inaccessible to most investors which is unfortunate, as these investments offer the highest potential pay-off on the "Risk/Reward" curve amongst all asset classes available for investments compared to public equity / fixed income instruments, commodities or even real estate.
Due to low interest rates in the U.S., negative rates in other parts of the world, and lacklustre growth globally, to even come close these days to what is considered a reasonably strong return of 7.5%, pension funds and other professional money managers are investing into relatively "riskier" assets: adding a larger allocation of private-equity investments to the once-standard portfolio of high-grade investment bonds.
Regular investors however, have not had the chance to rebalance their own portfolio... until now.
With an increasing number of companies delaying IPOs on the public market, we've been seeing investors display active interest in making private market investments.
Fundnel is building an investment platform that enables investors to co-invest easily alongside financial institutions in a broad selection of new asset classes.
The Fundnel Factor is a data-guided deal screening and evaluation process that all investment opportunities go through. Our system will evaluate a candidate company's financial performance, growth, margins, management background, compares them with the industry/sector performance and subsequently evaluates the potential for exits for the investment – over 600 quantitative data points reviewed per opportunity.
The system generates a final score (The Fundnel Factor) which when compared against internal and industry benchmarks, decides whether the company merits further evaluation by our investment team.
Only institutional and accredited+ investors will be able to invest on the deals listed on Fundnel platform.
+ Accredited investors: The definition of individual accredited individuals differs from country to country; in Singapore, individuals of S$2million net worth or equivalent, or income of S$300,000 from the preceding year qualify as accredited investors.
The definition of accredited corporation differs from country to country; in Singapore, corporation with net assets exceeding $10 million in value qualify as accredited investors
Here in Singapore, you must meet at least one of the following requirements as an individual:
Net personal assets exceeding S$2 million in value, or its equivalent in a foreign currency, or Income in the preceding 12 months of no less than S$300,000, or its equivalent in a foreign currency.
Note that your status as an accredited investor will give you access to all active deals on Fundnel.
As each country has a different definition of accredited investor, we advise that you first consult local regulations to qualify your status.
We are continuously working on measures to improve our deal due-diligence and onboarding processes. We carry out mandatory company incorporation, financials, management team and shareholder/director checks at the earliest stage that allow us to target red-flag issues and ask the right questions earlier on in the process.
This process is carried out by our own internal team of investment analysts who review and require substantiation of all material facts raised by an issuer. In addition, we do not spare any effort in insisting that issuers appoint independent auditors, commercial due-diligence, market research firms to substantiate their assumptions and claims in their financial projections and business plans.
Finally, we regularly monitor the health of our stable of "funded" deals that provides us with early warning to any potential issues that may arise post funding.
As described earlier, our thorough due diligence and investor anchoring process has historically meant that a low 3% of deals get funded as investors understand that there are real risks associated with private investments.
We ensure that our investment opportunities carry prominent risk warnings and that all statements made in the issuer’s investment deck are fair, clear and not misleading. We will continue to review our screening and due diligence processes to minimise risks to investors and to the reputation of our platform. We do not take the trust from our investors for granted and work hard to maintain it.
The minimum investment size, or ticket size, of each deal on Fundnel reflects the balance between a company's interests and potential investors' appetites; as such, you currently may not make an investment under the defined minimum amount.
Our network of investors include both professional investors – corporate venture, private equity, venture capital funds, family offices, angel investor networks – and of course individual investors who are keen to gain exposure in private investments alongside professional institutional investors.
Clicking "Fund This" indicates genuine interest in the deal, and is the first step to investing in any of the deals on Fundnel. Your commitment will be logged upon your e-signature submission on the relevant purchase and subscription agreements. Please note that submission of your e-signature is a legally binding contract between yourself and the company.
Once you have confirmed allocation from the business you're investing in, you will be contacted by the company directly to complete the necessary documentation.
You may withdraw your commitment at any point, up to the signature of e-documents (representing a binding contract between yourself and the company in which you're investing), whereupon your commitment will become irreversible.
Fundnel does not guarantee returns for investment-based deals. All investments come at a risk which we mitigate with our vetting process, but the final decision to invest ultimately lies with the individual investor. In the case of secured and guaranteed investments (as is the case typically with bond deals), the guarantee is offered directly to you by the business owners of the companies.
It is important to understand that some investments may take years to realise returns. Private investments are risky and in extreme cases, an investor may lose the entire investment amount.
You will first need to complete your personal profile by indicating preferences (e.g. Industry Interest, Geographical Interest for Investment). Once you've completed your profile, you will need to complete our self-accreditation agreement. If you're now accredited on our platform, you will be able to start investing in deals.
- Receive long-term funding from investors with no fixed time frame to return the principal amount of investment
- No ongoing interest rate
- Increase the number of shareholders in exchange for investment
- Issue voting / information rights to all investors
- Ability to price the share at a premium compared to pure stock sale
- Lower interest rate as compared to pure bonds as in some cases, it can be a zero-coupon CB
- Flexibility to structure the CB based on maturity period, conversion premium etc, to achieve desired objectives of business owners
- Delayed dilution of existing shareholders
- Interests payments to be made to investors at a pre-determined interval
- Interest will typically be added to the value of convertible bond before conversion
- No dilution to existing shareholders
- Interests payments to be made to investors at a pre-determined interval, typically every six months
- Principal has to be repaid to investors upon maturity of the bonds
- Financial covenants may be applicable
Business owners agree to share a percentage of its gross revenue with investors
- No dilution to existing shareholders
- Flexible payments as a proportion of revenue
- Flexibility to cap the return to investors to either; a predetermined "investment multiple" on their investment is achieved, or a predefined duration in accordance with its associated terms (e.g. after a certain time frame)
- A strong admin process is required to track and fulfil pre-determined regular pay-outs
Fundnel is designed for
- Early-stage businesses as well as mature companies raising funds from the pre-series A, Series-A funding, subsequent growth capital rounds all the way to pre-IPO financing
- Small and medium businesses (brick and mortar) looking to raise money for expansion
Our platform does not cater to idea stage (concept-only) companies at this time.
We are not the option to "easy" money, but instead, the more efficient option for the tough task of fundraising for your company.
Our network of investors include both professional investors – corporate venture, private equity, venture capital funds, family offices, angel investor networks – and of course individual accredited investors who are keen to gain exposure in private investments alongside professional institutional investors.
To get started, simply create a profile as a registered user, and build your company profile right away! You should have some basic company information on hand, including incorporation details, business registration numbers, financial performance etc.
If you would like to raise funds on Fundnel, you will need to create a fundraising deal profile to collect investor interest and commitments, on top of the requirements mentioned above.
Typical deals span 2 to 3 months. Even then, business owners have the flexibility of closing their deals at any pre-set date or when the 100% of the fundraising goal is reached, whichever takes place first.
Your deal profile will go through our vetting process (where we will contact you between 5 - 10 working days) before going 'live' on our deals page if successful.
After submitting a deal entry, we will process your application by putting it through our rigorous vetting process, which may include gauging early anchor-investor feedback. Deals will be listed on the site if they satisfy our vetting process; we may contact you (within 5-10 working days of your submission) for more details to expedite the process.
Read "The Fundnel Factor" and "What does Fundnel do" for more details
We will review your application based on following criterion:
- Positive early feedback process from our current pool of experienced investors
- Complete standard financial and legal due diligence process
Read "The Fundnel Factor" and "What does Fundnel do" for more details
Companies are responsible for engaging legal counsel to assist them with the preparation of all relevant legal documents (such as subscription / purchase agreements). We recommend engaging your legal counsel as early as possible.
Deals sometimes fall short of their stated funding goal. In the case of Threshold Investments ("all or nothing"), all funds raised will be returned to the investors, whereas in the case of Direct Investments ("best effort"), businesses will be able to gain access to any funds raised at the conclusion of the fundraising duration.
If more than 100% funding is achieved, the company will have the option of triggering an upsize option; if not, allocation will be based on pro-rata basis or selective basis+ (your company will retain full autonomy in this decision).
+ The funding size will be fixed at base deal size (or at the upsize deal size) and you will have the discretion to allocate the convertible bonds / bonds / revenue sharing agreements to specific investors.
Fundnel charges a 5% success-based fee of total funds raised from your deal.
Upon engaging us, we will run a thorough due diligence process to validate your product to investors, whilst listing your deal on our platform and all our proprietary channels, online and offline. As a business owner, you will receive one-on-one coaching with our business development, investment and marketing teams, get your management team ready for the deal, which will include meeting investors regularly.
Fundnel will also assist you with the preparation of all deal documents to facilitate incoming investments, freeing up your time to continue running your business and maintaining business performance during the fund raising process.
In certain cases, a monthly project retainer fee might be required to cover the costs of engagement of external professional parties.
Fundnel relies on self-declaration and disclosure on the part of the potential investors. Whilst Fundnel retains the right to request for additional verification at its discretion, we assist business owners in carrying out their own verification processes to ensure that potential investors who are interested in making investments in your deal are accredited by local law.
Yes, international companies can raise money on Fundnel. We insist that you engage legal counsel prior to launching your deal as there might be different nuances in every country.
Fundnel has gone to great lengths to ensure its operation is in full accordance with the Securities and Futures Act via advisement from reputable legal firms in Singapore.
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