At Canada's newest exempt market dealer (EMD), institutional and high net worth investors can dig through the financial statements of companies looking for funding. But there is no office to visit, no boardroom full of documents to review and face to face meetings aren't necessary. Unlike a traditional EMD, The Funding Portal does it all online.
Exempt market dealers are registered with securities regulators to match companies with investors in the prospectus-exempt market, where only institutions and high net worth accredited investors are allowed to operate, because the risks are potentially higher.
It's an increasingly busy niche within capital markets, as EMDs tap their networks to raise capital. Many are located in major financial centres such as Toronto, Vancouver and Calgary. With the high cost of filing a prospectus to tap the wider public for financings, the so-called exempt market is a popular alternative.
Thanks to the decentralized nature of e-commerce, companies and investors from all across the country will have an easier time participating, said Funding Portal chief executive officer Teri Kirk.
"Everything an EMD does, we do, but we use technology to do it faster and more efficiently," said Ms. Kirk, whose firm announced earlier this week that it had received its registration from the Ontario Securities Commission.
The company's system asks the questions necessary for regulatory tests such as know-your-client and know-your-product, and offers a secure online workroom where investors can review corporate documents. Regulators can also look into the workroom to ensure that securities laws are being respected.
"There are no face to face meetings, but we ask the same questions," she said.
The Funding Portal has guides who can work with companies, no matter where they are.
"People don't necessarily want or need to hop on planes, trains and bear those expenses," she said.
The Funding Portal started as a system designed to help match companies with government grants and financing, before expanding into matching companies with private investors. Ms. Kirk said that there are about 17,000 companies visiting the portal each month, and in the 18 months it has been up and running, it has provided its matching service to about 300 companies seeking government funding.