- Venture
Fundify Review
Started by the founder of Art.com, Fundify is a Title III Funding Portal offering investments in startups available to all investors and with minimums as low as $10. Selection is limited (4 active offerings as of this writing), though Fundify stands out with their “Expert Network” available to startups raising on their platform.
Pros
- Qualified investors can apply to join Fundify's "Expert network"
- Services available across the entire US, catering to various property types.
- Low investment minimums
Cons
- High risk, low liquidity
- Startup investments are already inherently risky and illiquid, and additional uncertainty around cannabis industry adds to that risk
- Relatively low number of active investments
Overview
This Fundify Review will help you learn more about Fundify's investment offerings, including how the alternative investments on Fundify are structured, and what your potential returns might be. You can read more about the criteria we use to review investment platforms here.
Fundify is a Title III Funding Portal (Reg CF) registered with the SEC and governed by FINRA. Fundify is based in Austin, Texas, and was founded by Josh Chodniewicz, who previously founded Art.com, and Fundify is in part a response to Josh’s own challenges with raising capital in the 1990s. Fundify stands out by offering their “Fundify Industry Expert Network”, which aims to connect startups raising money on their platform with “independent, accredited investors with expertise and background in specific industries”
Types of investments Fundify offers
Fundify offers equity investments in startups and growth-stage companies. Earlier-stage startups are generally riskier, though may offer the potential for a greater return in the long-run (that is, if they return anything at all). Fundify’s offerings span a range of industries and verticals, and their is no specific sector Fundify focuses on. Notably all of the current offerings available on Fundify claim some form of Social Impact, such as female founders or clean tech.
What do you get when investing with Fundify?
The security type varies by offering, and Fundify states that their offerings are typically a version of a SAFE, a convertible note, priced (common) equity, or a revenue share. Investors should carefully review the offering documents for any investment to ensure they understand the type of security they will receive for their investment.
How does Fundify make money?
Fundify does not charge any fees to investors. They do collect 6% of the amount raised from the startup, as well as an additional 1.5% in equity. Prospective investors should be aware that these fees reduce the amount of capital available to the startup for funding their operations.
Potential returns and cashflow
Investments on Fundify are high-risk investments in startups and growth companies. There are typically no dividends or interest payments (unless the offering explicitly offers a revenue share component).
Startup investments are very illiquid, and investors are not expected to be able to resell their shares quickly. In fact, no market for the shares may ever develop. Most startup investments lose some or all of their value.
Breadth of offerings on Fundify
As of this writing, there are only four active offerings on Fundify, along with 6 companies that are “testing the waters”, which Fundify calls “Fast Pitch Preview Campaigns”. In those, investors express interest, but that commitment is non-binding, and no money needs to be submitted until/unless the offering formally proceeds.
Regulatory framework
Fundify is an SEC registered Title III Funding Portal, which means they are subject to a range of rules and obligations around investor education and due diligence. All companies offering investments on Fundify will have been a minimum of background checks of key officers and owners. Prospective investors also have access to online forums to talk with other investors, and an online channel for asking questions of the company raising funds (and viewing answers of prior questions from others).
This review was first published on 09 August 2021.
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