Fundanna cannabis business equity crowdfunding review
Crowdfunding can connect you with investors interested in funding your cannabis business.
Fundanna is among the first investment crowdfunding portals specifically serving the cannabis industry. But funding won’t come without giving up some equity in your business.
What is Fundanna?
Fundanna is a brand of truCrowd, a Chicago-based crowdfunding portal that connects cannabis startups and small business owners with accredited and nonaccredited investors from around the world. Unlike other crowdsourcing platforms, Fundanna specializes in serving startup cannabis business.
Because federal laws list marijuana as a Schedule I drug, banks and other lenders are prohibited from providing funding to cannabis-based businesses. But recent changes at the SEC have allowed companies to secure up to $1 million per year from small investors.
By crowdfunding through Fundanna, cannabis businesses can specify a target amount to raise in exchange for equity. The amount you give away depends on the value of your company and the amount you want to raise.
What businesses does Fundanna fund?
Fundanna helps cannabis businesses of all types get the capital they need. Eligible businesses may provide medicinal marijuana or recreational marijuana in states where it is allowed.
Businesses that have sought crowdfunding through Fundanna include a mobile app that connects medical marijuana users to dispensaries and a healing hemp oil.
What are the benefits of Fundanna crowdfunding?
Fundanna offers cannabis-based businesses a way to get the money needed to start or expand without going through a traditional bank. It offers a powerful support team of marketing experts committed to your success.
- Fund your business. Get capital by connecting with investors looking to get involved with cannabis-based businesses.
- No risk. If your company doesn’t succeed, you aren’t required to pay back the investment.
- Advertising support. Fundanna can connect your business with advertisers willing to promote your services.
- Easy registration. Import a Facebook, LinkedIn, Google Plus or Twitter account to sign up quickly.
What to watch out for
Fundanna can get your business funded, but its services don’t come without risks.
- You’ll give up equity. Fundanna’s funding requires selling equity or stock in your company. The more you accept, the bigger percentage you’ll pay out in the future as your business grows.
- Unproven services. Though sparse online reviews are positive, Fundanna — founded in 2017 — has yet to have a business reach its goals.
- High fees. Fundanna charges a nonrefundable listing fee of $3,500 and a success fee upon reaching your funding goals.
Compare more cannabis business financing options
Am I eligible for Fundanna crowdfunding?
To be eligible for a Fundanna loan, you must own a startup in the cannabis space. You are not eligible if you are company outside of the US or an entrepreneur that already reports to the U.S. Security and Exchange Commission (SEC).
You are also ineligible if:
- You own a company that is disqualified under Section 302(d) of the Jumpstart Our Business Startups (JOBS) Act and Rule 503.
- You are an entrepreneur whose previous crowdfunding failed to comply with applicable annual reporting requirements during the two years prior to a new offering.
- Your company has no specific business plan.
- Your company’s sole business plan is to engage in a merger or acquisition with one or more other companies.
Is marijuana legal in my state?
Marijuana regulations by state
Many states have legalized marijuana in some form for medicinal purposes, recreational purposes and cultivation. However, federal law still classifies marijuana as a Schedule I drug, which complicates the ability for you to get a business loan for a cannabis-based business.
As of June 2017, marijuana is legal in some form in 28 states and the District of Columbia.
|State||Possession limit||Plant limit||Recreational|
|Alaska||1 oz||3 mature, 3 immature||Yes|
|Arizona||2.5 oz||12 plants||No|
|Arkansas||3 oz per 14 days||N/A||No|
|California||8 oz||6 mature, 12 immature||Yes|
|Colorado||2 oz||3 mature, 3 immature||Yes|
|Hawaii||4 oz||7 plants||No|
|Illinois||2.5 oz per 14 days||N/A||No|
|Maine||2.5 oz||6 plants||Yes|
|Maryland||30-day supply, TBD||N/A||Yes|
|Massachusetts||60-day supply, 10 oz||N/A||No|
|Montana||1 oz||4 plants, 12 seedlings||No|
|Nevada||2.5 oz||12 plants||Yes|
|New Hampshire||2 oz per 10 days||N/A||No|
|New Jersey||2 oz||N/A||No|
|New York||30-day, nonsmokable||N/A||No|
|North Dakota||3 oz per 14 days||N/A||No|
|Ohio||90-day supply TBD||N/A||No|
|Oregon||24 oz||6 mature, 18 immature||No|
|Rhode Island||2.5 oz||12 plants||No|
|Vermont||2 oz||2 mature, 7 immature||No|
|Washington||8 oz||6 plants||Yes|
|Washington, DC||2 oz dried||N/A||Yes|
|West Virginia||30-day supply TBD||N/A||Yes|
How do I apply for Fundanna equity crowdfunding?
Companies can get listed on Fundanna in fewer than 10 days by following four steps:
1. Create an account and offering. Describe your business, what it offers and the problems it addresses.
2. Make a pitch. Create a video for your investors.
3. File with EDGAR. Submit required forms with the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
4. Sign up with a stock transfer agent or share registry. This step is only required if you’re looking to raise $100,000 or more.
What do I need to apply?
When you create your Fundanna account, be ready to supply:
- Pictures of your product.
- Your company’s valuation.
- Your personal and business contact information.
- The amount of equity you’re offering in exchange for funding.
- The price per company share, if available.
- The minimum share an investor can buy.
My offering is on Fundanna. Now what?
You’re listed on Fundanna and on your way to getting the capital you need to grow your cannabis business. You’ll have a better chance of getting the funding you require by promoting your offering.
- Share your page. Use social media and personal contacts to attract investors.
- Reach out to investors. Keep potential funders informed and engaged, and they will help promote your product.
- Provide feedback. Answer questions from potential investors quickly and thoroughly.
- Contact customer service. If you require support with your offering, you can contact support via phone, email or live chat.
It can be difficult to secure funding for your cannabis-based business, but Fundanna is among the alternatives to bank loans that could help you start up or expand your business.
That it’s a newer crowdfunding portal may require a leap of faith — and giving up future equity in your company to get it up off the ground.