Faq

Florida Funders Frequently Asked Questions

You can also get your questions answered by connecting with us on Facebook at facebook.com/flfunders or on Twitter at @floridafunders. If you’d rather avoid the social scene, contact us via email.

If you are an accredited investor who believes that investing locally will not only help increase returns and diversify your portfolio, but can help boost the local economy – Florida Funders may be just the answer you have been looking for. Many of the most promising local, early-stage companies are in need of capital, but are not sure how to go about securing it. Sometimes, that capital defines the difference between success and failure as a young entrepreneurial venture and your investment could be the deciding factor in the race to become a thriving business. Read our investing FAQ to learn more.

If you are a business owner or entrepreneur who is in possession of, or developing a promising startup, and believe you have what it takes to take your company to a new level, apply now to gain access to hundreds of accredited investors seeking to invest in companies such as yours. If you are interested in what Florida Funders has to offer, read our Getting Funded FAQ in order to gain new insight into what we can do for you.

Investing Questions

  • What is Florida Funders?

    Florida Funders is an online portal that connects Florida-based, early-stage companies seeking capital with accredited investors.

  • How does it work?

    Florida Funders “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, Florida Funders creates a special purpose investment vehicle (SPV), an LLC, which consolidates the investments and makes the investment in the company.

  • How much does it cost to invest in an early-stage company on Florida Funders?

    Registering on the website and browsing funding opportunities is completely free.

  • What are the costs to investors?

    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.  Florida Funders receives no part of the fee at any time.

  • How does Florida Funders make money?

    Florida Funders 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.

  • Do investors have access to the company?

    No.  Only the manager of the SPV interfaces with the company and this is typically a member of Florida Funders.   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 SPV investors to keep them informed on business performance.

  • How do I invest?

    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.

  • How much can investors invest?

    The companies seeking funding set the minimum investment amount but typically the investment can be as little as $3,000.

  • I changed my mind, can I update/cancel my investment?

    Yes, depending on when you decide to cancel. Please send us a message using the contact form if you have any questions.

  • Can I update/cancel my investment after the offering has ended?

    Unfortunately, once the offering has ended and the funds have been transferred, it’s out of our hands.

  • How can I pay?

    We use Fund America to power the transactions on our site. Fund America 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 Fund America account created, you can transfer funds online with ACH, send a wire transfer to Fund America, or send a check to Fund America.

  • How does the company get money from the investors?

    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 Fund America. The investor fee stays in the SPV to pay third party expenses throughout the life of the LLC.  Florida Funders has no access to any of the funds at any time.

  • Am I debited immediately when I commit to invest in a company?

    When you commit to invest in a company, we simply process payment authorization and put your funds in escrow at Fund America. 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.

  • What happens if an investment doesn't reach its funding goal?

    Then your funds will be returned to you.

Funding Questions

  • What types of companies are accepted?

    We prefer to invest in Florida-based 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.

  • Why should I list my company on Florida Funders?

    The advantages of using Florida Funders 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 $3,000.

    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 Florida Funders.

    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.

  • How much does it cost to raise funds?

    Florida Funders 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.

  • How do I apply for funding through Florida Funders?

    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.

  • Can I revise my application?

    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.

  • What happens once my application has been submitted?

    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.

  • My offering reached its deadline, what happens now?

    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.

  • My offering reached its financial goal, what happens now?

    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.

  • How do I receive funds from a successful investment offering?

    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.

  • What are the costs to my company?

    Florida Funders 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.

  • Will the Florida Funder' investors have direct access to my company?

    No. Only the manager of the Special Purpose Investment Vehicle (SPV) interacts with the company, and this is typically a Florida Funders partner. Florida Funders 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.

  • What is the initial minimum investment expected from investors who are interested in my company?

    The companies set the minimum investment amount but typically the investment can be as little as $3,000

  • Who is eligible?

    Any company or organization incorporated in the State of Florida is eligible to raise funds on Florida Funders. 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 Florida Funders.

  • Does the company get the money directly from interested investors?

    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. Florida Funders has no access to any of the funds at any time.