Real Estate and Entertainment Private Equity Investing Done Right

How Katipult helped Funding Nomad create a multi-jurisdiction compliant entertainment and real estate private equity platform

After considerable research and due diligence, we chose to partner with Katipult to develop our global funding portal. The Katipult solution provided us with the robust and extensive functionality we were looking for, built on a highly secure and flexible backend platform. Katipult is very experienced and exceptionally customer-focused, working closely with our development team to build the kind of solution our clients required in a global solution. We highly recommend Katipult and look forward to continuing to work with them to introduce new functionality and capabilities for our portal.
Bradly Kerr
CEO & Co-founder

Name: Funding Nomad

Industry: Private Equity

Country: Canada, USA, Cayman Islands

Size: 2-10 employees

Challenge: Doing the traditional private equity manually, the old fashioned way and looking for an online private equity solution

Result: Global funding private equity portal with the robust and extensive functionality built on highly secure and flexible backend platform

We spoke with Brad Kerr, CEO and Co-Founder of Funding Nomad, and equity crowdfunding platform specializing in entertainment and real estate projects.

Katipult: What was your biggest challenge you were trying to solve?

For a couple of years now we were looking for an online platform that we can customize and adapt to different regulatory regions around the world. We weren’t looking for just a Canadian portal, we wanted a global portal. That was our strategy, so when we were looking at your feature set compared to some of the other companies we were looking at, we felt that Katipult had the right mix of features that we needed to adapt to different regions.

Plus, we felt that Katipult had an affordable solution that could be set up quickly, and that was important to us as well because we didn’t have a lot of IT staff on our side. We wanted a company we could partner with, we wanted someone what we can trust and depend on, that we can grow with, and someone who is not going to just disappear or is not going to be able to support the needs that we have.

 

Katipult: Why did you choose Katipult?

Katipult had the best value for the money with the right feature set that we are looking for and we felt confident in Katipult, not only about the capabilities but also the platform itself, that it was going to be able to support us.

One of the other, smaller, but also important reason was the fact that Katipult was Canada based. That was important to us. We have worked with companies in the past that were abroad, in other regions and time zones and it was a frustrating process. We want somebody close to us that we can reach in decent hours and also there is the Canadian support that we thought was important.

In addition, based on our initial conversations, we felt that we could get the customizations that we needed. Again, we go back to the fact that we needed to be more than just a Canadian portal, so we needed to have different feature sets and different solutions for different regions and we felt that they can support us with that.

 

Katipult: What was the biggest benefit you’ve seen from using Katipult’s investment management & crowdfunding software?

We feel that we got a great platform, we got it up and running very quickly and we think that we have a really good working relationship. We can pick up the phone at any time, we can chat with Katipult’s key people to have not only a technical discussion but also a regulatory one. We had a lot of talks with their CTO about how certain features should be implemented.

Every time that we talk to a new issuer, a new investor or other partners that we are getting with, obviously they always go and check the portal, and we had nothing but constant compliments, they love the look and feel. When we show them some of the functionality in a demo they absolutely love it. They say they can’t find it in other portals. We are pleased about that we have got a good portal that has some very interesting and creative features that others don’t have.

 

Katipult: What did you like the most about Katipult?

First of all, Katipult team is easy to work with. We can discuss with them and figure the right path to building new features . That’s important. But also, it is a solid, well executed platform and most importantly, it keeps us in compliance. Katipult does a lot of work with the regulators themselves and that helps us a lot as well. We are somewhat conservative in our approach to doing this and we want to make sure we don’t step out of bounds, we do not want to get fined. So, it is a solid platform and Katipult is keeping us in compliance.

 

Katipult: What is the most useful feature or application of Katipult software?

It is the segmentation engine. It allows us to define which deals different types of investors can see and how much they can invest in a deal. Hands down, that is the number one key feature that we talk about all the time with our partners, investors and issuers. It is the main thing that allows us to stay compliant in the regions, it is a critical feature.

 

The story of Funding Nomad

FundingNomad is a global equity crowdfunding platform – and Canada’s first equity entertainment platform – that is dedicated to entertainment and media projects (stage shows, musicals, films, movies, direct-to-digital media, interactive exhibits, performances, and recreation/hospitality). FundingNomad is the best and most exciting way to invest in entertainment crowdfunding – online, securely and compliantly. Investors from around the world can invest in global entertainment projects developed by the most experienced and successful production companies that have been fully vetted and approved. Some past campaigns include Mat Franco Magic Reinvented Nightly, Rock of Ages Las Vegas, Absinthe at Caesar’s Palace, and many more.

Accredited and Retail Investors can sign-up and invest for free on FundingNomad’s secure portal that is fully compliant with securities regulations, and is backed by our own respected and experienced Canadian Exempt Market Dealer (EMD) that has been financing entertainment deals for many years. The platform employs high security, privacy, scalability, as well as an automated and intelligent engine that controls the campaigns that investors are permitted to invest in, and how much they can invest based on their financial accreditation status.

What’s different about Funding Nomad platform than others in the space?

More and more investors have become familiar and comfortable with crowdfunding investments. Most investors are familiar with the Donation Crowdfunding model used by Kickstarter and Indiegogo, where investors donate small amounts of money (e.g., $5 or $10) to a start-up in exchange for a t-shirt, a DVD or tickets to an event. But this is a hard way to raise any significant funding for a project and businesses must do all their own campaign promotion and gift fulfillment.

What investors really want is a piece of the profits from experienced and successful companies. And companies prefer to give equity because it is less expensive up-front and they get shareholders who share in the success of their business.

Equity Crowdfunding has become the preferred model for this kind of investing, and is the fastest growing crowdfunding model in the world. At the same time, this type of investing is highly regulated and securities rules differ around the world. For this reason, most crowdfunding platforms are limited to a single country and restricted to certain types of investors.

With FundingNomad, we wanted to create a global equity platform that allowed all types of investors to have access to the best entertainment and media deals anywhere in the world. We spent a considerable amount of time, effort and investment to research and comply with the various securities regulations in Canada, the USA and internationally. We also worked very closely with the Katipult team to customize our platform for country-specific securities rules, including an automated and intelligent process that controls which campaigns can be viewed by different types of investors, and how much each of those investors are permitted to invest based on their financial accreditation status.

FundingNomad is also one of the only crowdfunding platforms in the world that fully supports campaign issuers. Unlike other platforms where companies are left on their own to do campaign marketing and solicitation to find investors, FundingNomad is a full-service platform that helps issuers prepare and setup their campaigns, promote and market their campaigns to global investors, and take care of investor distributions and communications after the campaign is over.

 

The founders

FundingNomad was created on the belief that all investors should have access to the best and most exciting equity entertainment deals from around the world. Having financed entertainment deals for many years, the founders wanted to bring those opportunities to investors online, everywhere.

FundingNomad’s founders have extensive experience and expertise in corporate finance, wealth management, securities compliance, risk management and technology development. We set out to solve the problem of making equity crowdfunding more accessible to investors around the world, using technology to manage the regulatory rules that face investors and issuers.

FundingNomad is supported by a highly experienced advisory board that includes entertainment industry veterans, corporate finance executives, international legal and accounting professionals, and crowdfunding experts.

 

Katipult: How did you come up with the idea to start an online investment platform? Was there an “ah-ha” moment?

We have been financing entertainment deals for many years, and we have excellent partnerships with the most experienced and successful producers around the world. But reaching out to our increasingly global investors was becoming more and more time-consuming. Our investors were also looking for greater convenience and accessibility in making their investments online and keeping track of their portfolios.

At the same time, a new group of Millennial investors (accredited and retail) were becoming increasingly interested in participating in entertainment and media deals, and they were very open to using web-based financial platforms (otherwise known as FinTech). This new Millennial generation is the largest cohort in history – even larger than the Baby Boom – and they are very progressive in managing their wealth and investing online.

With the development of new securities regulations in Canada, the USA and around the world, we knew it was the ideal time to launch an equity crowdfunding portal that could provide accredited and retail investors online access to global entertainment and media deals. The challenge, of course, was making sure the platform was easy and convenient for investors to use and, at the same time, ensuring it was secure, scalable and compliant with all the different regional securities regulations.

After considerable research and due diligence, we chose to partner with Katipult team to develop our global solution. The Katipult solution provided us with the robust and extensive functionality we were looking for, built on a highly secure and flexible backend platform. The Katipult team were also very experienced and exceptionally customer-focused, working closely with our development team to build the kind of solution our clients required in a global solution.

 

Katipult: How do you see the future of private equity crowdfunding industry?

The Canadian provincial securities regulations took a significant step forward at the beginning of 2016 with the introduction of several new funding exemptions, as well as unifying some of the Offering Memorandum rules, which made equity crowdfunding more accessible across Canada. However, much more work still needs to be done. The federal government also needs to participate in this process and do more to unify rules and regulations across the provinces. Canada has a significant opportunity to be a global leader in crowdfunding, but currently is falling behind.

Regulations in the United States have also been evolving fast, most significantly around Regulation A+ and Title III CF. Expanding the limits for Title III crowdfunding to raise more than $1 million and reducing the liabilities placed on funding portals, will significantly expand the market for crowdfunding.

Cooperation between securities regulators is also starting to happen and should accelerate in the future. A good example is the partnership between the Australian Securities and Investments Commission (ASIC) and the Ontario Securities Commission (OSC) where companies looking to enter one another’s market will receive regulatory support, and the ASIC and OSC will share market and regulatory trends. Regulators are recognizing the global investment world we live in today, and that crowdfunding can and should cross borders.

Online payments and the growing support of blockchain technology will make it easier and safer for investors to fund campaigns in the future. There are many valid concerns when it comes to online payments, not the least of which includes anti-money laundering, security and taxation. New standards, secure gateways and regulatory policies will get introduced, which will help make online payments more convenient and universal.

Finally, greater market awareness and adoption of crowdfunding by investors around the world will continue to grow. And this will mean more opportunities for companies to raise funds and more investors to participate in crowdfunding campaigns.