INVESTING FOR THE 21ST CENTURY

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  • Fiscal Frontiers

CROWD-INVESTING REVIEW: MARCH 2019

MARCH 27, 2019 UPDATE

(disclaimer at the end)

Welcome to our March 2019 crowd-investing review! We still only have funds on one crowdfunding site as of the date of this post. There are a few others in Canada, but they either lack options (usually having one thing posted at a time, if any), or they don’t operate in our region. As such, our focus will remain exclusively on FrontFundr.


This post will be broken up into two parts. The first is going to cover the five pledges we already made on FrontFundr, three of which have now successfully wrapped up. The other two are having some struggles.


The second part of this post will discuss a trio of FrontFundr investments that have caught our eye and that we're considering jumping into.


OUR PRIOR PLEDGES


You can check out our January post to get a rundown on the investment opportunity and what each of the companies does, but, to summarize, we pledged:

  1. $250 to The Very Good Butchers, a vegan butcher shop in BC, for a promissory note paying 6% interest;

  2. $250 to Squamish Canyon, an outdoor recreation space in Squamish, BC, for a limited partnership interest;

  3. $250 to Weroes, a social change-focused social media platform, for common shares;

  4. $500 to VeloGuide, an Uber-like app focused on cycling guides, for common shares; and

  5. $250 to Two Wolves Premium Canadian Ales, a brewery, for non-voting preferred shares.

We’ve got updates on all five of these investment efforts.


The Very Good Butchers (SUCCESS)


This is an investment we made for a $250 promissory note paying 6% interest. The investment has closed and we are now locked in. The Very Good Butchers does a great job of providing monthly updates.


In the January update, they told us that their December 2018 sales were great, up over 60% from their December 2017 sales! They took possession of a 4,000 square foot facility down the road from their Victoria butcher shop that they were doing some minor renos on. They also located and made a successful offer on a 10,000 square foot facility in Vancouver with the intention of converting it into a combination production facility/butcher shop/restaurant.


The February update provided more good sales data: January 2019 saw a 40% bump over January 2018! That’s great. The monthly update also said that due to the winter storms out east, the Victoria facility mentioned above fell a little behind schedule as equipment was delayed in delivery. That said, the company bought a food truck that they hope to have up and running in a month or two, just in time for the festival season. Finally, regarding the Vancouver space secured in January, initial floor plans and a budget have been devised and they are presently working to line up their financing to bring their dreams to life!


Weroes (FAILED)


Unfortunately, this campaign was not successful. There was a bit of a fake out on March 11th, when FrontFundr accidentally sent out an email saying the campaign was successful and was being finalized. Unfortunately, the very next day we got a follow up email saying that the first was an accident and that the campaign had actually been shuttered.


We are happy to report that our funds were returned back to us by cheque sent in the mail within 7-10 business days (we failed to mark the exact date of receipt). We hope to redeploy our funds into another campaign soon.


VeloGuide (SUCCESS)


VeloGuide successfully closed its campaign on January 30, 2019! On February 26th we were emailed our share certificate for 500 Class A Common Voting Shares of VeloGuide Inc.


In both the January 30th and February 26th emails, we were informed that VeloGuide will be sharing quarterly updates with us, so we look forward to seeing what types of information they share.


Squamish Canyon (SUCCESS)


Squamish Canyon successfully closed its campaign on January 11th, and on January 21st we were emailed the certificate for our 250 limited partnership units. Squamish Canyon, like VeloGuide, has committed to providing quarterly updates. That said, they’ve also provided information outside of that schedule.


On February 10th, they updated investors that they had started mapping and planning the engineering for a walkway, a signature piece of their plan. They also updated their website with a site map and Q&A section. If you're interested, they have opened up a second round of investing on FrontFundr.


Two Wolves Premium Canadian Ales (PENDING)


On February 21st, we learned that Two Wolves had not reached its minimum campaign target. However, all is not lost. The company has revamped its strategy and relaunched its campaign, but has increased its minimum investment from $100 to $500. The email provided a means for us to invest in the new campaign if we topped up our investment (which was at $250 on the previous campaign).


As of the date of this post we had not taken any action, but we are leaning towards topping up our investment to $500 in the hopes of pushing the campaign towards success. Things are not looking good though. They are presently just shy of 50% of their minimum with only 10 days to go. If you are interested, you can check out their revised campaign page.


Despite the failed first campaign, the company itself seems to be doing good. On March 7th, the CEO of the company sent out an email saying that the brand had reached an agreement to expand their informal Saskatchewan deal into a formal distribution arrangement. So the company is growing, despite the difficulties on FrontFundr, and we hope it’s second attempt is successful.


POTENTIAL PLEDGES


FrontFundr has a constant rotation of interesting investment opportunities. When we had five investments on the platform, we didn’t think too much about the new ones. That said, with Weroes now cancelled and Two Wolves struggling, we think we might jump back in to make a new pledge or two. There are three campaigns in particular that have caught our attention:


Victoria Caledonian Distillery and Twa Dogs Brewery


This is a Canadian Whiskey distillery and they appear to have already hit their minimum, so any investment would conceivably get processed. They produce single malt whiskey and craft beer in Victoria, BC.


They have a minimum investment of $250, which is great for us as it is right in our target area, though it is a little unclear what you get, whether it’s partnership units or shares, as they use the words units and shares interchangeably in a few spots. There are 45 days left to invest, so check them out if you’re interested.


FrontFundr


You read that right! For the next 31 days you can actually invest in the investment platform itself! Not much to explain, but below are a few interesting stats from their campaign page:

  1. 32 successful campaigns have been closed since 2015; and

  2. Over 3,500 different individuals have invested on their platform.

The offering is for common shares and has a minimum of $500. We invested that much in VeloGuide and are considering upping our Two Wolves investment to that amount. Since FrontFundr is a business we really want to be successful (seeing as, y'know, we blog about what we do on their platform), we're comfortable throwing some money into the ring on this one.


They have already raised in the range of $260,000 out of the maximum $750,000, and since there's no closing minimum and 31 days left to go, we’re guessing this one will also go ahead, so check out their campaign page for more details if you're interested.


Hopkidz


HopKidz is an on-demand babysitting service. Think Uber or Skip the Dishes, but for babysitters and daycare. The idea is brilliant to us. Although not parents, our friends are all starting to have children, and we are starting to hear about their childcare woes anytime we want to see them now. The idea for some kind of service like this has crossed our minds, but so we are fascinated to see someone actually trying it.


They screen everybody, insure both caregivers and children, and they make sure rules and regulations are followed. They had a successful pilot from September to December of 2018 in BC and they are presently working on a mobile app. In the next 12 months, they plan on operating across BC, Alberta, and Ontario, which together represents about 63.7% of Canada’s population, or 82.4% of Canada’s non-Quebec population (with Quebec likely having unique laws and daycare situations).


While this campaigns fascinates us, it has only raised $67,600 of its $300,000 goal and there are only 10 days left in its offering. When we checked out the offer a little more, we see a few reasons for why this might be:

  1. The minimum investment is set at $1,500, which is considerably higher than the normal $250-$500 we look for on the platform; and

  2. You must complete a criminal record check to be an investor. For a company focused on providing care to children, I can see why this might make sense for them, but at the same time, in the age of convenience and instant gratification, this is an added step that could turn a lot of eligible people off, just because of the time involved.

We have 10 days to keep thinking about if we want to jump in or not and to look after the criminal record check. If you read their profile through to the end, then you can see that they have partnered with an online criminal record check company that promises to complete checks within 24 hours. Perhaps we will give that a try.


CONCLUSIONS


So we have had some good successes on FrontFundr, with 3 investments closed, and potentially another 3-4 to hopefully talk about next month. Next week we will be providing an update on our peer-to-peer investments. You can check out our last post on those if you want to get caught up on how we were doing as of March 6, 2019.


We at Fiscal Frontiers are not investment advisers and our only goal is to report to you on the performance of investments we have made so that you can consider our experience along with all the other information available to make an informed decision on what is best for you. Investing in start-up and early stage businesses is inherently risky and all of a particular investment could be lost.

 
 

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