FundedHere Crowdfunding Platform - Review for SMEs
FundedHere Crowdfunding Platform - Review for SMEs
ValueChampion Rating 
Pros
- good for early stage startups seeking financing to grow
Cons
- Not the best for immediate financing for daily operations
- Not the best for simple business loans, asset purchase financing, or invoice financing
- Invite basis
FundedHere is one of three crowdfunding platforms in Singapore that offer equity financing. It focuses on early stage companies and allows them raise as much as S$1 million in as few as 35 days. FundedHere also offers ListCo bonds: loans for publicly listed companies. It is the only P2P/Crowdfunding in Singapore that offers this type of financing.
| Summary of FundedHere Crowdfunding Platform |
|---|
| Equity and debt financing |
| Cash Disbursement: as soon as 35 days |
| Option to upsize/accept 80% of funding goal |
Table of Contents
What Makes FundedHere P2P Crowdfunding Platform Stand Out to Borrowers
FundedHere P2P Crowdfunding Platform is a great option for early-stage SMEs that are looking for equity financing. While its competitor Fundnel offers much larger financing deals, it does not focus exclusively on early-stage startups and has a highly selective application process (10% acceptance rate). FundedHere's platform features only early-stage startups. Also, the minimum operational history requirement of only three months encourages newer companies to apply. Due to these factors, FundedHere could be a more appropriate for many smaller and younger SMEs who are looking for a chance to access up to S$1 million in equity financing.
Unlike many other crowdfunding platforms, FundedHere allows SMEs to accept upsize, or accept more than 100% of their original funding goal. The platform also lets businesses complete deals that do not meet their funding goal, as long as they receive at least 80% of the original goal. This may appeal to early stage SMEs that need capital to continue to grow their business. Additionally, FundedHere is the only platform that gives businesses the opportunity for face-to-face meetings with investors.
Downsides to FundedHere's equity financing include its high fees; it charges 6% of total fund raised in cash, and an additional fee of 2% of the company's equity. In contrast, Fundnel charges a cash fee of only 5% of the total deal. Additionally, the platform tends to focus on early stage, small startups as it does not offer deals as large as Fundnel ($20 million+).
FundedHere Financing Features
FundedHere offers two types of financing: equity and debt. In equity deals, early-stage startups sell shares of their business for financing. While businesses may be hesitant to giving up shares of equity, it can provide up to S$1 million in financing and does not come with the rigid structure of tenure and interest payments associated with business loans.
FundedHere's ListCo bond deals provide debt financing to listed (SGX/Catalist) companies. However, it is unlikely that many SMEs are listed. Still, this option allows companies to access up to S$5 million without dilution of their equity shares. Downsides to debt financing include rigid repayment schedules and interest rate costs.
| Feature | Equity | ListCo Bond |
|---|---|---|
| Funding Amount | S$100,000 - S$1,000,000 | S$1,000,000 - S$5,000,000 |
| Eligible Companies | Early-stage startups | SGX/Catalist listed companies |
| Fees | 6% in cash and 2% in equity | 1.5% per year |
Who Can Borrow: Eligibility Criteria
SMEs seeking funding using the FundedHere platform must qualify as either "Early-Stage" or be listed on the Singapore Exchange (SGX) Mainboard or Catalist in Singapore.
To be considered early-stage, businesses must be in their post-seed or pre-Series A funding round. Additionally, to be eligible for financing through FundedHere, early-stage businesses must be incorporated for at least three months, be incorporated in Singapore, have at least one Singaporean founder, and have at least S$50,000 in contributed capital.
Listed companies must be majority owned by Singaporean citizen(s) or permanent resident(s), have positive net tangible assets, lien shareholder equity, and be able to provide a corporate guarantee. Additionally, they must not be on the SGX watchlist.
Application Process
The financing application process begins with SMEs submitting their business pitch and ACRA Biz file through FundedHere. Afterwards, the platform reaches out within 5-7 business days. Upon approval, the crowdfunding campaign cycle begins. This cycle lasts 30 days.
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Stephen Lee is a Senior Research Analyst at ValueChampion, specializing in insurance. He holds a Bachelor of Arts degree in International Studies from the University of Washington, and his prior work experience include risk management and underwriting for professional liability and specialty insurance at Victor Insurance. Additionally, Stephen is a former US Peace Corps Volunteer in Myanmar (serving between 2018-2020), where he continues to provide business development consulting services to HR companies in Asia Pacific.