iNVESTOR FAQS - Frequently asked questions
What is equity crowdfunding?
Equity crowdfunding is similar in function to a regular crowdfund where a company uses a donation, pre-order or rewards model to raise capital from the ‘crowd’. The key difference is that with equity crowdfunding, rather than pre-selling a product, the businesses are selling ownership in the company - to share in any profits and success of the company as it grows. It's similar to buying stock in a publicly-traded company on the stock exchange.
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Who can invest?
There are different regulatory guidelines and restrictions on the geography of equity crowdfund investors for Canada and beyond. For FCSB's crowdfund, we are using the Ontario Securities Commission NI 45-110 equity crowdfunding exemption to sell shares in our first round to anyone 18 years of age or older with a valid Ontario address.
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How much can I invest?
Investment caps for equity crowdfunds are outlined by the Ontario Securities Commission.
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A non-accredited investor can contribute up to $5000 in a single crowdfund round and $10 000 annually.
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An accredited investor can contribute up to $25 000 in a single equity crowdfund and $50 000 annually.
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An investor is deemed accredited based on annual income ($200,000 individually or $300,000 with a spouse) or net financial assets ($1 million excluding home) or net assets ($5 million).
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How do I make returns?
The rights to distributions for investors are outlined within our offering document and shareholders agreement. For FCSB's first equity crowdfund offering, investors are buying into our operating company and all of its revenue streams and future activities.
Forest City SynBio plans to create an investment fund that will be a subsidiary of the operating company & will take a 10-15% equity stake in each startup that participates in FCSB's Accelerator program. Traditionally, an accelerator fund would issue dividends to its investors based on one of three (liquidity) events occurring with a company that the fund invested in:
1) The company is acquired by another company, at which point you would sell your shares;
2) The company goes public on a stock exchange, at which point you may sell your shares on the open market;
3) The company generates excess cash and decides to issue dividends to their shareholders.
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How long will it be until I see returns?
Biotechnology startups take time to develop. The startups coming through Forest City SynBio's doors will be at a very early stage, and you can expect to wait at least 5-10 years before they successfully take their product to market. They may experience a liquidity event sooner than that (eg if a larger company acquires them or they list on a public market) but in general biotechnology investing is a long game.
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Will I get updates on Forest City SynBio's progress?
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We will be as transparent as possible about our company's progress and intend to provide investors with regular updates.
Our social media channels are also a great way to stay in the loop: