SPOTLIGHT ON PCMA DIRECTOR:
Peter-Paul Van Hoeken
Founder & Chief Executive Officer, FrontFundr
Question: The PCMA is delighted that the OSC received and accepted its recommendation of your application to sit on the 2019 OSC FinTech Advisory Committee. Please tell us how this newly appointed role will benefit PCMA and FrontFundr? What you will bring to it?
Peter-Paul Van Hoeken: The OSC FinTech Advisory Committee advises OSC staff on developments in the finTech space, as well as the unique challenges encountered by innovative businesses in the securities industry. The PCMA represents the interests of all market participants in the Canadian private capital markets towards among others, the Canadian securities regulators. Just like any other industry, digital technology offers opportunities and challenges to the private capital markets. My role as a member of the OSC FinTech Advisory Committee enables me to directly represent PCMA’s voice toward the OSC with regards to the finTech space.
FrontFundr is an online private markets funding and investment platform. Continuous dialogue between market participants and securities regulators is key for successful and sustainable innovation in the private capital markets and the financial industry as a whole.
I am hoping that with my ten years in the traditional banking industry followed by over five years as an entrepreneur in the Canadian finTech industry, I can make a meaningful contribution to the OSC FinTech Advisory Committee. Digital technology is a key enabler for making the industry more accessible, inclusive and efficient, just like it has dramatically changed other industry. I have experienced the significant challenges of balancing opportunities for innovation and protecting investor interests within the private capital markets.
Question: Tell us about your company and its focus.
Peter-Paul Van Hoeken: As the first investment crowdfunding platform in Canada, FrontFundr has pioneered the democratization of the private capital markets. Since 2015, FrontFundr has closed 32 deals supporting Canadian businesses to access capital and gained over 3,500 individuals who have invested in companies they believe in. FrontFundr connects early stage and growth companies with the wider investor community i.e. the public, accredited and non-accredited investors. Everything the company is based on its mission to democratize the private capital markets in Canada based on the principles of simplicity, transparency, accessibility and inclusivity.
Question: Tell us about other FrontFundr initiatives and contributions to the PCMA.
Peter-Paul Van Hoeken: FrontFundr has been operating now for over three years. The company has successfully proven the concept of investment crowdfunding in Canada and continuously advanced its proprietary technology platform. FrontFundr is now scaling up in the private markets, building up the deal flow, deal size and taking on the capital raising of and investing in later stage private companies. The company is also working on various initiatives leveraging its combined EMD and technology infrastructure to enhance the online investment process for investors and the process of screening companies. Another initiative, which I am very excited about is that we are in the midst of drinking our own whiskey – FrontFundr on FrontFundr. Everyone can become a co-owner with me in FrontFundr starting at $500! (Go to www.frontfundr.com to learn more).
FrontFundr has been a proud corporate member of the PCMA since the company’s inception in 2014. In the last few years, FrontFundr has been actively supporting the PCMA with a content contribution at PCMA’s national conferences, local chapter activities in BC, sponsoring and the introduction of new members. Just like for any industry association, active involvement and contribution by its members are crucial.
Question: What is your company’s focus in the private markets?
Peter-Paul Van Hoeken: FrontFundr is a two-sided online market place. On the issuer side, FrontFundr’s initial focus has been to help raise capital for startups and early-stage companies that are typically looking for seed capital between $250K to $2 million to finance activities in the areas of proof of concept and market validation. FrontFundr enables these companies not only to raise the capital they need but also to build a community of supporters and brand champions.
On the investor side of our market place, our primary target group is the massive group of non-accredited investors. Investors that do not yet have a net $1 million in financial assets and/or earn over $200K per year, but certainly do have investible financial assets. They want to invest in private companies that they believe and like to see success so they can share in their success. Millennials are a key target group for FrontFundr. Just like for any other product or service they purchase, it needs to be simple, transparent, instant and available online. FrontFundr delivers these key consumer needs through its powerful combination of online exempt market dealer and proprietary technology platform.
Question: In your opinion, what are some of the major challenges and opportunities in the private capital markets?
Peter-Paul Van Hoeken: I see two major challenges in the private markets. Firstly, the regulatory burden not so much because of regulation in itself, but because of the lack of harmonization in securities laws across Canada. Particularly in the investment crowdfunding space, fragmentized rules resulted in barriers for early-stage companies that are in bootstrapping mode to raise capital and unnecessarily increased their cost of raising capital. Secondly, the ongoing democratization and increasing access for the wider investor community to the private markets also increases the challenge for all stakeholders, including regulators, to balance efficiency of the private capital markets and investor protection.
The biggest opportunity I see for the private capital markets (and the financial industry overall) is to create the much-needed transparency and accessibility of capital and investment opportunities. Digital technology offers tremendous opportunities to make this happen and provide everyone, companies and investors better access to the private capital markets.
Question: With the adage, “Membership has its Privileges”, please finish this sentence: Joining the Private Capital Markets Association of Canada is imperative because…
Peter-Paul Van Hoeken: It is the one and greatest national voice and community of the private capital markets – The financial heart of Canadian business and investing.
OSC Announces Fintech Advisory Committee Members for 2019. Click here to see the full list:
Peter-Paul Van Hoeken
Founder & Chief Executive Officer | FrontFundrpeter-paul@frontfundr.com
Main: (800) 804-1524 | Direct: (416) 843-4111
Toronto Office: Suite 1600, 1 University Avenue, Toronto, M5J 2P1
