Through careful analysis and a selective application process, Fundnel provides investors with a curated list of startups on its investing platform. The platform is one of two crowdfunding platforms in Singapore that offer equity investment opportunities in startups. Of the two, Fundnel appears to cater to larger startups given its selection process and deal sizes. Besides pure equity investments, Fundnel also provides opportunities in convertible bonds, corporate bond, and revenue sharing opportunities in startups.
|Summary of Fundnel Investment Platform|
|Total Deals: 22 deals, $100 million+|
|Businesses analysed: 1,700|
|Selective Process: 10% application acceptance rate, 3% of applicants receive funding|
|Users must be accredited investors|
Table of Contents
- What Makes Fundnel Stand Out to Investors
- Investment Opportunities at Fundnel
- Investor Eligibility Requirements
What Makes Fundnel Stand Out to Investors
Along with FundedHere, Fundnel is one of two P2P/Crowdfunding platforms that allow investors access to equity deals with Singapore startups. Fundnel stands out as it provides a more diverse group of investment opportunities in a highly selective group of early to late-stage startups. The platform gives investors the opportunity to invest in growth and pre-IPO startups through equity, convertible bonds, bond/debt structure, and revenue sharing investments. Fundnel has analysed over 1,500 businesses with only 10% of applicants accepted and 3% receiving funding. This selective application allows Fundnel to provide investors with the best available pool of investment options.
Investment Opportunities at Fundnel
Fundnel offers a variety of investment opportunities in startups, including: equity, convertible bonds, revenue sharing, or bond/debt structure. Each option has various advantages and disadvantages, depending on the investors' preferences.
Equity investments allow investors to purchase shares of startups to become one of their shareholders and benefit from their growth. In general, equity investments give investors a high risk/high reward opportunity compared to other investment structures. If the business folds, investors will get nothing; and conversely, investors could experience incredible returns if the business is successful.
A bond/debt structure gives investors the opportunity to make loans to startups for a set period of time for variable or fixed interest rates. While this option does not give investors ownership shares of the startup, it tends to provide higher interest rates than convertible bonds and less risk than equity.
Convertible bonds give investors the ability to convert a bond into a specified number of shares of common stock in the startup or cash of equal value. These investments provide investors with regular income and a potentially large future return. Convertible bonds are more attractive than traditional loans/bonds as they offer the upside of being able to convert to shares or cash. However, they tend to pay lower interest rates and come with added risk that the company's value may not increase. These investments can be great for investors that are interested in equity investments, but are interested in a slightly less risky alternative.
Finally, revenue sharing gives investors a percentage of the startup's gross revenue in exchange for financing for a set duration. Similar to equity, revenue sharing gives investors a stake in the success of the startup. However, it provides slightly less risk and potential returns because investors receive a share of any income received even if the company is not very successful, and do not reap the full benefits of an extremely successful business since they do not own any shares of the company.
|Equity||Convertible Bonds||Bonds/Debt||Revenue Sharing|
|Minimum investments of completed deals||S$5,000||S$50,000||Unknown||S$250|
|Typical Annualized Returns||20 - 30%||2 - 6%||3 - 8%||Varies, Fundnel reports a 6% for one deal|
|Largest Completed Deal on Fundnel||$2.2 million||$2 million||Unknown||$50,600|
|* Data from Fundnel's reported completed deals. Not included in table are venture capital deals completed by Fundnel|
Investor Eligibility Requirements
Access to the Fundnel platform is currently restricted to accredited and institutional investors. To be qualify as accredited, individuals must have net personal assets of S$2 million, with one's primary residence value accounting for no more than S$1 million, and income the last 12 months of at least S$300,000. Corporations with net assets greater than S$10 million also qualify for accredited investor status.