CannaFundraise Frequently Asked Questions
You can also get your questions answered by connecting with us on Facebook at facebook.com/CannaFundraise or on Twitter at twitter.com/@CannaFundraise . If you’d rather avoid the social scene, contact us via email.
If you are an accredited investor who believes that investing in medical cannabis ancillary companies, CannaFundraise may be a fit for you and your investment needs. Promising early stage companies need capital, and your investment can make or break a company.
More, read FAQ Investing Questions.
If you are an entrepreneur, have what it takes with your promising startup, apply now to gain access to accredited investors seeking to invest in companies such as yours. If you are interested in what CannaFundraise has to offer. More, read FAQ Funding Questions.
Investing Questions
CannaFundraise is an online portal to connect Florida-based early-stage medical cannabis ancillary companies seeking capital from accredited investors.
WHAT IS CannaFundraise?
CannaFundraise “curates” early-stage companies in search of funding and lists them on its website. Only early-stage companies that have passed our extensive diligence process are listed on our site. Accredited investors register on the site to gain access to the information posted by the company. Once investors have committed enough capital to meet the company’s minimum funding threshold, CannaFundraise creates a special purpose investment vehicle (SPV), an LLC, which consolidates the investments and makes the investment in the company.
Registering on the website and browsing funding opportunities is completely free.
Investors pay a small fee for third party expenses such as legal and accounting. This is a one-time fee for the life of the fund and any unused portion is returned to investors upon liquidation of the fund. CannaFundraise receives no part of the fee at any time.
CannaFundraise receives “carried interest” on any increase in value of the SPV’s investment in the company upon liquidation or exit. The 20% carried interest is the same amount typically charged by venture capital firms. We do not, however, receive an annual management fee. Accordingly, our interests are completely aligned with both the investors and the company. If they don’t make money, neither do we.
No. Only the manager of the SPV interfaces with the company and this is typically a member of CannaFundraise. Investors are not stockholders and do not have voting or other rights typically granted to stockholders. However, the funded companies provide regular updates to the SPVinvestors to keep them informed on business performance.
On the specific company page, click the button ‘Invest Now’, and you will be able to invest by simply entering your investment amount. The next page will provide transaction instructions for you to transfer your funds. Once completed, you will be directed back to this platform and receive a confirmation email.
The companies seeking funding set the minimum investment amount but typically the investment can be as little as $2,000.
Yes, depending on when you decide to cancel. Please send us a message using the contact form if you have any questions.
Unfortunately, once the offering has ended and the funds have been transferred, it’s out of our hands.
We use FundAmerica to power the transactions on our site. FundAmerica is one of the largest payment processors on the internet. You will need to create an account with them if you don’t have one already (quick and easy). Once you have your FundAmerica account created, you can transfer funds online with ACH, send a wire transfer to FundAmerica, or send a check to FundAmerica.
Investors’ funds are put into escrow until the escrow is tipped. Then, the money is moved into the SPV and distributed to the company as it is released by FundAmerica. The investor fee stays in the SPV to pay third party expenses throughout the life of the LLC. CannaFundraise has no access to any of the funds at any time.
When you commit to invest in a company, we simply process payment authorization and put your funds in escrow at FundAmerica. The money will be transferred to the company account if and only if the company succeeds in meeting its minimum funding goal. You will be notified via email in all cases.
Then your funds will be returned to you.
Funding Questions
WHAT TYPES OF COMPANIES ARE ACCEPTED?
We prefer to invest in Florida-based medical cannabis ancillary technology companies, which have developed a product or service and are poised for significant growth. These companies have typically been bootstrapped or funded by family and friends to the point of starting to gain traction in the marketplace. Revenue is helpful but not required if a solid customer base is being built. Our typical investment in aggregate is $100,000 to $500,000 and we do participate in larger offerings as a co-investor with angel groups or other individuals.The advantages of using CannaFundraise to raise investment capital are numerous. For example: Your funding campaign can be seen by hundreds of accredited investors looking for investment opportunities, which significantly increases your chances of meeting your funding requirement. The minimum investment amount per investor is as low as $2,000. You can group a large number of small investments into one larger investment, which simplifies your capitalization table and reduces the burden of having to deal with numerous individual investors. There is no cost for you to register on CannaFundraise. Post-funding, you gain access to our vast ecosystem of successful entrepreneurs and professional contacts, which provide support, guidance, and new customer/partner opportunities to help your company meet its growth targets.
CannaFundraise passes along certain third party expenses such as legal and accounting costs. We only make money, however, by sharing in the success of our investment. When you are successful and our investment gains in value, we receive a 20% “carried interest” at liquidation. This compensation comes from sharing in the increase in value of the investment with our investors, not from the issuing company.
To apply for funding, submit your company’s information using the “Apply for Funding” button on our homepage. Just fill in all the fields with as much detail as possible by following the instructions on-screen, and click the ‘Save’ button at the bottom to continue.
Once you start the application process, you can save all your input without submitting it for approval, allowing you to return and complete it later. When you are ready to submit the completed application, just click on the “submit” button and we will review it promptly.
Once your company’s application has been submitted, we do a thorough check to see if your investment offering meets our minimum requirements. If you pass our initial screening, we perform a more detailed and rigorous review of your company and management. We work closely with you throughout this process to help your company gain access to our pool of accredited investors.
There are only two choices when a deadline is reached: A. The financing goal was reached (or exceeded) – In this case, all investments will be transferred to your bank account via Fund America or you will have the funds already via the offline payment method. B. The funding goal wasn’t reached – In this case, all investments will be canceled. No funds will be transferred.
That’s great news! If the project has not reached its time deadline, investors will still be able to invest unless you configure the system to limit/cap investments when the goal is reached.
Before your funding window launches on our site, you can configure the system to receive payments offline, or set up a Fund America escrow account. Assuming your funding minimum is met, the funds can be transferred to your bank account from Fund America if you don’t already have them from a direct payment.
CannaFundraise requires the company to pay certain legal and organizational expenses prior to funding. These expenses are enumerated in the legal documents before a company is accepted for funding on the platform.
No. Only the manager of the Special Purpose Investment Vehicle (SPV) interacts with the company, and this is typically a CannaFundraise partner. CannaFundraise investors are not stockholders and do not have voting or other rights typically granted to stockholders, which greatly simplifies any burden associated with dealing with numerous individual investors.
The companies set the minimum investment amount but typically the investment can be as little as $2,000
Any company or organization incorporated in the State of Florida is eligible to raise funds on CannaFundraise. We are particularly interested in listing early-stage, technology-focused companies looking to raise $200,000 to $1,000,000. Accelerators, angel groups, and other organizations which plan to invest in early-stage companies are also eligible to raise funding on CannaFundraise.
Investors’ funds are put into escrow at Fund America until the company’s minimum funding threshold is reached. The money is then moved into the SPV and distributed to your company as the escrow company releases the funds. CannaFundraise has no access to any of the funds at any time