Company: FundRoom
Website: www.fundroom.com
Founders: Mat Dellorso and Fred Bryant
Headquarters: Richmond, Virginia
Year Founded: 2009
Twitter: @fundroom
Brief Company Description: FundRoom is a next-generation private placement securities marketplace that helps source, vet and connect early-stage companies with accredited investors. The company is well positioned to scale and handle capital transactions from $100 million down to the crowdfunding level (when legal).
By Mat Dellorso, co-founder
Product Overview
FundRoom is a next-generation digital marketplace that makes capital allocation for early stage companies more accessible and capital transactions more efficient. FundRoom’s affiliate WealthForge, LLC, a member FINRA/SIPC broker-dealer enables the company to scale and handle capital raises anywhere between $50K and $100 million. The FundRoom website helps source and locate investment opportunity while the WealthForge broker-dealer performs the capital transactions, creating a complete end-to-end solution for early-stage companies looking to raise funds. FundRoom’s marketplace is a tool to assist in information collection which allows the company to disseminate a wide range of capital raises and present investors with the best opportunities that match within their risk portfolio. FundRoom has built a sophisticated business process that has integrated traditional investment methods with new technology, creating a more secure and efficient way for companies to raise capital.
Founder’s Story
I graduated from the University of Richmond in 2009 with a major in Finance, Information Technology. and Entrepreneurship. During my undergraduate studies, I founded two businesses and was also the president of the Finance Society. The experience I acquired was noticed by a fellow classmate, Fred Bryant, who approached me about a new business concept he wanted my thoughts on. Fred was interested in creating a more efficient way for entrepreneurs to raise investment capital from investors. I was familiar with the challenges associated with getting my two businesses off the ground and was immediately interested in helping Fred create a better model for small businesses to raise capital. We began to get the ball rolling and created WealthForge LLC, approaching the SEC first to become a registered broker-dealer and member, FINRA/SIPC. During our eight month long membership process with FINRA, we were also developing a social network at FundRoom.com that was helping entrepreneurs and early stage companies connect with interested investors. The original concept has become much more sophisticated over the past few years as we have gained significant traction on our social networking platform. We have been successful in creating a more efficient marketplace for early stage capital allocation, while integrating the broker dealer, giving users the ability to perform the actual capital transactions through our secure and compliant investment portal. We have achieved our mission of creating an end-to-end solution for companies to find and connect with investors and complete capital raises in a much more efficient and simplistic environment. Our platform can scale to help companies raise anywhere between $50K and $100 million in capital and provide accredited investors (and soon with the JOBS Act other sophisticated investors) access to high quality, vetted investment opportunities that they may otherwise not have been able to consider for their portfolios.
Marketing/Promotion Strategy
FundRoom has two distinct and very different target markets, entrepreneurs and investors. We recently re-branded our online platform to FundRoom.com in June 2012 to better align ourselves with our mission and value offerings. FundRoom uses social media marketing to influence and engage the entrepreneurial audiences while tapping into traditional PR campaigns to attract sophisticated investors. FundRoom is also set up to allow companies to easily self-promote and become their own investment banker by sharing their business through their social and real world networks, utilizing WealthForges’ transaction engine and compliance framework. FundRoom also partners with regional startup competitions using the site to collect competitors’ information which provides the judges an efficient and streamlined view of the participants’ business models.
How We Differentiate from the Competition
Unlike our crowdfunding counterparts, we have built a highly scalable business model which can support small crowd raises (when legal), but also significantly larger investments upwards of $1 million-$100 million. Crowdfunding is considered by FundRoom to be an additional vertical and revenue stream but has no bearing on the company’s future direction. Traditional investment banks can utilize FundRoom to locate high growth opportunities adding another vehicle to help diversify their portfolios. Additionally WealthForge, FundRooms’ broker-dealer, permits partnership opportunities with funding portals who need a transaction engine to complete crowdfund investments in the future (95 percent of all other crowdfunding portals in existence today cannot conduct business because they’re not affiliated with a broker-dealer).
Business Model
FundRoom offers tools for entrepreneurs to raise capital from the community and from our database of accredited investors. Listing on the FundRoom platform is currently free for all users, however in order to solicit an investment opportunity and accept money via the transaction engine there is a setup and diligence fee of $300 per account. The company makes the majority of revenue by taking a fee (usually 5-8 percent) on closed transactions.
FundRoom, together with WealthForge LLC, will also offer premium services by acting as a placement agent and M&A advisor for select businesses. Companies and shareholders looking to liquidate can utilize WealthForge as a secondary market to exit as well, further expanding the company’s portfolio of services.
Current Needs
FundRoom is looking for investors interested in adding a private placement security offering to their portfolio. Conversely, FundRoom is currently accepting submissions from new business ventures looking for capital between the $50K and $10 million range. Interested parties can easily sign-up and begin creating their profiles at FundRoom.com.
FundRoom – www.fundroom.com
