We perform a preliminary review on all companies that apply to raise capital through FrontFundr, which results in the rejection of over 92% of applicants. This can be for a number of reasons, such as not being a good fit for crowdfunding or not being at the right stage of their business development. FrontFundr then conducts a thorough due diligence review on each company prior to their listing.
FrontFundr's due diligence approach includes, but is not limited to:
Review of key corporate documents (e.g., shareholders’ agreement) and minute book (e.g., reviewing past corporate resolutions)
Discussions and interviews with internal and external stakeholders (e.g., CEO, regulators)
Financial analysis (e.g., stress testing projections, statement analysis, cash flow analysis)
Background checks (e.g., criminal, credit, regulatory, and reputational)
Business analysis (e.g., product-market fit)
The final step of FrontFundr’s due diligence process is a meeting between the prospective company and our Investment Review Committee (IRC).