Crowdfunding gets entrepreneurs knocking on wealth manager’s door

When wealth manager Grant Blindbury attended a recent evening meeting of entrepreneurs, he didn’t expect to stay there until past midnight.
But then again, he never before had offered a group of entrepreneurs a crowdsourcing platform that could connect them to thousands of accredited investors looking to place capital with what he hopes will be the next Facebook or Twitter.
A partner in FMB Wealth Management, Mr. Blindbury has signed on to offer entrepreneurs a crowdfunding platform developed by digital marketing firm My New Financial Advisor, which recently joined with crowdfunding provider InvestedIn. What makes the platform unique is the access it provides to big-money accredited investors whose deep pockets can really make a difference for entrepreneurial startups.
It was his access to this platform that resulted in the swirl of people asking Mr. Blindbury for more information at the Nov. 7 Starting Up Santa Barbara event for local entrepreneurs.
“As an investment adviser walking into a startup event, I would never in a million years have expected to get the response that I got,” he said. “I was there until 1 a.m., and I was meeting all these award-winning, fascinating entrepreneurs. It was a total 180 for them to be asking me questions about how they could work with FMB,” Mr. Blindbury said.
The crowdfunding partnership follows the Securities and Exchange Commission’s move to lift its ban on general solicitation, allowing companies to advertise offerings to investors more broadly.
Prior to offering the technology to advisory firms such as FMB Wealth Management, My New Financial Advisor founder Frank Troise worked with his own registered investment advisory firm, SoHo Financial Services, to test the platform.
SoHo generated more than $100 million in assets under management in just 10 weeks because it worked only with companies that already had experience raising Series A financing for startups, he said.
“In our testing, the moment that the wealth adviser talked about crowdfunding, the conversation substantively changed,” Mr. Troise said.
“The entrepreneur needs capital. So we go to the entrepreneur and say, ‘We view our relationship strategically, and we’ll give you a crowdfunding portal for free,’” he said.
My New Financial Advisor is scheduled to launch its platform nationwide in January. For now, it is previewing its capital-raising platform business model with three advisory firms: Buckingham Asset Management, Loring Ward and Mercer Advisors.
Mr. Troise noted that all three firms are affiliated with Dimensional Fund Advisors, whose board includes Nobel prize-winning economists Eugene Fama and Myron Scholes.
Ultimately, what will make his crowdfunding platform work for advisers is its effectiveness in creating true relationships with clients, Mr. Troise said.
And there is something in it for him, too: revenue sharing.
“I don’t care about lead generation,” Mr. Troise said. “This is about revenue sharing; that’s how I get paid.”

Related Topics: Financial Performance