Online crowdfunding portal Funding Wonder has found its first business to use its regulated financing solution, the company said Thursday (March 23).
The firm recently secured approval by the Financial Industry Regulatory Authority to operate as a licensed Regulation Crowdfunding Portal, a result of Regulation A+ under the JOBS Act, which allows virtually anyone to invest in a small business crowdfunding style, allowing that business to raise up to $50 million.
Funding Wonder said Dental Fix RX is the company that will use its services; it’s a B2B company that delivers equipment and repair services for the dental industry.
“Funding Wonder’s crowdfunding marketplace was created to present franchise investments like the Dental Fix RX franchisees to private investors,” said Funding Wonder COO Alan McGlade in a statement. “Small businesses are the backbone of our economy, and crowdfunding portals like Funding Wonder offer an alternative source to access capital that we hope will help them thrive.”
Anyone 18 years of age or older can invest in a private debt securities through the Funding Wonder platform, the company explained, and investors can receive returns on those investments.
While Regulation A+ has now legalized crowdfunding for SMEs in this way, analysts say it has been slow to gain traction in the U.S.
Reports in the Associated Press last year found that fewer than 50 SMEs were listed on crowdfunding platforms in an attempt to raise money. Another crowdfunding platform, Wefunder.com, had 24 businesses listed at the time of the report, collectively raising less than $3 million. Update: According to Wefunder, that figure has increased to more than $23 million as of this month.
“It’s going to take time for people to know it’s possible for them to get into it,” said Wefunder cofounder Nick Tommarello in an interview with the AP. He added that social media will likely help these startups raise awareness of their crowdfunding campaigns.