Selecting the correct crowdfunding platforms series – Fundanna The 2012 passing of the Jumpstart Our Business Startup Act (JOBS Act) allows privately-held companies to sell equity to the public. There are many platforms available to help companies launch, host and manage their equity crowdfunding campaign. Each episode of this multi-part series will feature a different crowdfunding site explaining to Dan Humiston how their platform provides the guidance and infrastructure for companies to launch a crowdfunding campaign. They will also clarify what types of cannabis companies their platform accepts. Alex Illyn from Fundanna is today's featured guest. Produced by PodConX Cannabis Crowdfunding - https://podconx.com/podcasts/cannabis-crowdfunding Dan Humiston - https://podconx.com/guests/dan-humiston Alex Illyn - https://podconx.com/guests/alex-illyn Fundanna - https://fundanna.com/
Selecting the correct crowdfunding platforms series – Fundanna
The 2012 passing of the Jumpstart Our Business Startup Act (JOBS Act) allows privately-held companies to sell equity to the public. There are many platforms available to help companies launch, host and manage their equity crowdfunding campaign. Each episode of this multi-part series will feature a different crowdfunding site explaining to Dan Humiston how their platform provides the guidance and infrastructure for companies to launch a crowdfunding campaign. They will also clarify what types of cannabis companies their platform accepts. Alex Illyn from Fundanna is today's featured guest.
Cannabis Crowdfunding - https://podconx.com/podcasts/cannabis-crowdfunding
Dan Humiston - https://podconx.com/guests/dan-humiston
Alex Illyn - https://podconx.com/guests/alex-illyn
Fundanna - https://fundanna.com/
CC Fundanna
Dan Humiston: . [00:00:00] Today at M J bulls raising cannabis capital, we are continuing the cannabis crowdfunding series with Alex alien from fund Danna, Alex, welcome to the show.
Alex Illyn: Hey Dan. Thanks for having me.
Dan Humiston: Well, it's great to have you in the show and it's so appropriate because fund Danna is a crowdfunding portal designed for cannabis companies to get started.
what I thought we do is we talk about some of the advantages that cannabis companies can have by hosting their campaign on fund Danna.
Alex Illyn: Absolutely. Yeah, that makes perfect sense to me.
Dan Humiston: Well, jump in and tell us what their advantages are.
Alex Illyn: All right. Perfect. I can do that. So, advantages for us. Really, we started fun Danna with just an eye toward the future. And fun. Dan has been around since 2016. The idea was really to bring together a place where companies who are sort of ancillary in the cannabis space, CBD hemp industries, things of that nature, where they could have a platform just for them, because there was nobody really catered to that specific [00:01:00] audience to those types of companies.
And so we saw that gap.
Dan Humiston: Okay.
Alex Illyn: And we thought, this is a perfect opportunity for us to get in front of companies that are looking to potentially raise funds with regulation, crowdfunding, and also kind of help them through the process, get them the understanding that they need in order to put a campaign together.
So that they could, look to raise some funds on the portal. So that's really in a nutshell, why we do this because nobody else really was looking to do anything like this. And it makes sense. . I understand from an industry perspective it's can be very tricky to work with companies in the cannabis space, whether it be.
Banking perspective or whether it be from like a regulatory standpoint, but we've worked with companies in a number of different spaces within the cannabis CBD hemp arena. So for us, it's a really big focus of ours and, we're just blessed to be in the position that we are in and to help companies potentially raise some capital on the platform.
Dan Humiston: [00:02:00] Oh, I think you're in a great position. I think you're in a great position. You mentioned about the regulations and , I know crowdfunding falls under federal jurisdictions, which makes it hard for some types of cannabis companies to find a portal that will host their campaign. Are there any types of cannabis businesses that are not accepted on funding?
Alex Illyn: Yeah.
So as a currently stands, we have to be extremely careful with companies that directly touch plants, just because of the banking issues. Right. Because when you set up a regulation crowdfunding campaign, and this is a common misconception, I see a lot. When investors come in and they make their investment, the money doesn't come directly to us or directly into the company.
It has to go into a third party escrow account. And that's a tricky process, right? Because escrow, banks typically will not work with companies that directly touch. The plant itself, they just, they can't do it. So, we've had companies that have been in the ancillary space, but direct plant touching [00:03:00] companies can be very, very tricky to work with.
But now of course we can absolutely speak with you kind of figure out what could make sense, what could work. But Yeah.
, that would be the one main limitation that we have currently. Yes.
Dan Humiston: Well, hopefully that won't be forever. I keep our fingers crossed. Let's talk about the process. If I wanted to launch a campaign in 2022, what should I be doing now? So that I'm prepared.
Alex Illyn: Yeah, I think the biggest thing that companies could look into doing prior to launching a campaign is just kind of finding their crowd now. Right. Don't wait to find your crowd, start working on those pieces immediately, whether that's. Setting up an email marketing list, bringing people in the door so that they're excited about what you're doing with your company, working with social media, building on LinkedIn, building those networks, those strong networks, so that you can interact with other cannabis entrepreneurs as well as other people in the space.
That's the [00:04:00] biggest piece I would say is just making sure that you have kind of an idea as to what your crowd could look like because every crowd is different. Every company, even within the cannabis and CBD space can be different. Some people are interested in, in like real estate, for example, or they're interested in other types of projects that are in the space.
So trying to find what your crowd could look like. Ahead of time is going to be the biggest pathway to success when you get that campaign set up. In my opinion. Yeah.
Dan Humiston: I think that's good advice. I think it's good advice. Start lining , everybody up in advance. Why wait until the last minute.
Alex Illyn: And just to add onto that, , you have to be a little bit careful, right? If you're a company you cannot. Pre advertised that you're doing a reg CF campaign. You have to be really careful you, can't what they call a precondition, the market, which is basically talk about doing an offering before you do an offering.
So to me, , it's very important to bring people in and show them just the power of your company, what you're doing with your company wise. So innovative what your goals [00:05:00] are explained the team, really tell that story early on because that's, what's going to be able to hook people in and then.
The campaign starts up, know, then you can absolutely hit them say, Hey, this is what we're doing right now. You already know about us. About our story, about our foundations, our team, this is what we're doing now. We'll raise in capital. You could be a part of this, so that could be, I think, a pathway to success for companies.
Absolutely.
Dan Humiston: You don't accept every application that comes across your desk. What are some of the key things that must be in an application to get them approved?
Alex Illyn: Yeah, I would say number one would be a story as crazy as that sounds, but stories are. Do the best in regulation, crowdfunding spaces and having the story that audiences can connect with, at least in our opinion is something that's very important. We certainly don't turn people away in that way.
If they're interested , in using regulation, crowdfunding, we want to talk to you because we think that, we can't leave. Kind of walk through what the process and [00:06:00] what your options could look like. So, we certainly don't like outright project people, which is good. But at the same time, when companies come to the door, Having that story and having a good team and something that people can connect with, I think is really important when it comes to putting that regulation, crowdfunding campaign together and putting any company together, any business together is something that you're really, to want to look into.
So for me, I would say number one is probably the overall story of the company that doing the race.
Dan Humiston: Yeah, , that's always the case. , you mentioned the steps. Maybe you could walk us through the process from the time my application is accepted until the money hits my bank.
Alex Illyn: Yeah.
the process is honestly pretty straight forward. We try to keep it straight forward. There's obviously a lot of forms, surveys and questionnaires. None of it is what I would consider to be difficult. It's just really tedious, and I mean, full disclosure, right? It's a tedious process, right?
There's a lot of things that go into putting a campaign together. But, most of the time our companies, they come in the door they sign up on [00:07:00] dot com for an issuer account. They might work on their profile a little bit, which is fantastic. That's going to come kind of later in the process, but you know, the first initial steps are really going to be determining what the compliance due diligence pieces we need from that company are, things like a valuation survey so that we understand kind of what the value of the company looks like.
Understand what the capital structure looks like for the current. Understanding, what you're trying to offer is it can be a stock in the company. Is it going to be, convertible notes, some other structure, we're open to all suggestions. We're open to customizing solutions just because not all solutions kind of work for all companies.
You've got. Listen, you have to understand really what their goals are and what they're trying to do. So, for us, , it's really important just to understand what the eventual goals are and how they want to present that to the investors. But Yeah.
Most of the work is really just working through with companies to help them get a form scene and offering statement prepared.
Just so that they have, again, all the compliance due diligence pieces submitted and [00:08:00] everything is good to go. So , that's really the meat and potatoes.
Dan Humiston: Well, it's important to do those, but you said this, the tedious stuff, but that's the foundation for all future raises. So if you have to put that foundation in place and you might as well get it done with having the assistance of somebody from the fund and a team as you guys can help them put this together, and then that foundation, they can carry that forward for many years.
Alex Illyn: Yeah, absolutely. That's the idea. And we've we've worked with companies. This is their first rodeo. We've worked with companies where this is not their first rodeo. We've worked with companies that are pre-revenue post revenue. I mean, you name it. We've probably seen a company or worked with a company in that kind of a stage.
Again, , it's important for us to just understand what those goals and objectives are, because they can just be wildly different. Everybody thinks, oh, you just you're raising money. Yeah. , it's just not quite that simple. Right. There's a lot more to it then. I think a lot of people realize at [00:09:00] first blush.
At least from a company standpoint, there's definitely like an educational process. Sometimes that goes into getting everything prepared, but.
Dan Humiston: Well, I think it's important to before we wrap up, but we just have a couple of minutes left, but I wanted to ask you about advertising because there seems to be some uncertainty and are there the restrictions. Where you can advertise and what you can do. I mean, for instance, could I put commercials on all of our podcasts?
, could you put a billboard up? , what are the things you can do to get the word out about your campaign?
Alex Illyn: Yeah, absolutely. That's a great question. And it's definitely something that's trickier for companies in the cannabis space. No question, because we've seen how digital advertising platforms have reacted to cannabis advertising in the past. Anything even in the space, CBD is tricky. So as far as advertising goes, once your campaign is live, you really do have the ability to market that offering you can't.
Digital marketing campaigns. You can put a billboard up, you can do a radio ad. You can [00:10:00] do bumpers on a podcast, right? There's a million different things you can do. A part of it is the restrictions that these platforms are going to give you as to whether you can, or can't advertise based on your campaign.
, I personally have seen some successful advertising campaigns. It's kind of a multitude of platforms at this point, which is pretty cool. It is possible to advertise. I've not seen any billboards yet, but there's still time.
Dan Humiston: Yeah, well, hopefully that'll be soon. We have all of the fun Diana's information in the show notes, and I definitely recommend checking out their website. If you're considering raising money or looking for a company to invest in the websites are very, very detailed. And , there's also people on Alex's team that can answer any of your question, Alex.
I appreciate you doing this today. Thanks for being honest.
Alex Illyn: Absolutely. Dan, thank you so much for having me appreciate it.