Netcapital

Netcapital Inc. operates as a publicly traded fintech company, providing a digital ecosystem for private capital markets. The company's origins trace back to the Jumpstart Our Business Startups (JOBS) Act of 2012, which established the regulatory framework for equity crowdfunding. The funding portal was founded by Jason Frishman, who sought to address inefficiencies in early-stage capital access he observed as a mentor to startups. His background includes research in medical oncology and cognitive neuroscience. The crowdfunding platform was founded in 2014. Cecilia Lenk, who has a background in technology and biopharma with a Ph.D. from Harvard, was an early investor and later became CEO of Netcapital Inc., driven by her passion for democratizing private capital markets.

The firm's core business revolves around its SEC-registered and FINRA-member funding portal, Netcapital.com. This online platform connects entrepreneurs with both accredited and non-accredited investors, enabling private companies to raise capital digitally. The business model generates revenue through several streams, including fees for listing companies on the portal, portal fees, and consulting services. For companies, Netcapital offers a streamlined, automated process for preparing and filing the necessary regulatory documents to launch a compliant fundraising campaign. For investors, the platform provides access to pre-IPO investment opportunities across a variety of sectors, with tools for due diligence, including company disclosures, financial statements, and direct communication with founders.

The platform's technology is designed to be a scalable, 24/7 transaction-processing engine. A key feature is the use of a custodian, which holds the title for all securities purchased on the platform. This structure simplifies cap table management for the issuing companies by consolidating many small investors into a single line item, allowing founders to focus on their business operations. Investors receive beneficial ownership, entitling them to the economic benefits of the securities. Netcapital has also developed a beta version of a Secondary Transfer Platform in partnership with Templum Markets LLC, which aims to provide potential liquidity for shares purchased through its portal, although its development has been paused. A significant milestone was the company's uplisting to the Nasdaq Capital Market in July 2022 under the ticker NCPL. The company's advisory arm, Netcapital Advisors, offers strategic, marketing, and technology consulting services, sometimes in exchange for equity stakes in the companies it assists.

Keywords: equity crowdfunding, private capital markets, fintech, investment platform, startup fundraising, Reg CF, JOBS Act, pre-IPO investing, retail investors, accredited investors, non-accredited investors, digital private markets, secondary transfer platform, online investing, capital formation, venture investing, early-stage companies, startup investing, financial technology, private equity