3 Ways DealMaker Offers Better Payments for Capital Raises

Traditionally, in the process of raising capital, investor “payments” are considered an afterthought— the company raising capital opens an escrow account; investors wire money into that escrow account, and an accountant or corporate secretary manually reconciles each wire received to a signed subscription agreement. If the process is “fast”, it is completed in a matter of weeks. ‍

In years past, online capital formation has been much the same. Investors are offered credit card and “e-check” ACH, where an investor enters bank account information on screen, but funds are nevertheless deposited into escrow and disbursed manually; a slow and tedious process. At DealMaker, our breakthrough came with the realization that credit cards were a valuable tool, but would not suffice alone; rather digital, cardless payments represent the future of online capital raising. 

Let’s highlight three ways DealMaker’s best-in-class payments technology accelerates online capital formation.
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1. Bank-to-Bank Payments Minimize Fees and Increases Conversion

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On DealMaker, an investor submitting a payment is presented with the option to connect their bank account and pay with the click of a button, seamlessly logging into their online banking portal directly on the application. When that same investor returns to transact in another offering (or re-invest in the same), their account is still connected, and their checkout process is further simplified. Our technology has made paying for an investment as easy as sending a Venmo. 

While other platforms often boast of high, 70%+ card adoption rates, we are proud of our platform-wide 40/30/30 credit card/bank-to-bank/express wire split saving millions of dollars in processing fees and minimizing costly chargeback risks.
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2. Wires are Automatically Reconciled and Minimizes Delays and Errors

There’s a “good enough” bifurcation that other investment platforms have accepted as the status quo— “pull” payments (i.e credit card and bank-to-bank) are automatic, but “push” payments (i.e wires) are reconciled manually, by hand. This “old school” way of thinking costs millions of dollars in wasted time and errors: wire transfers often represent the largest investments, yet their timely clearance relies on manual accounting, prone to delays and mistakes. On DealMaker, wires are automatic— when an investor opts to wire, a unique virtual bank account is generated for their specific transaction. As soon as their wire is received, it is automatically reconciled and the investor is notified. 

While other platforms have entire accounting teams to reconcile omnibus escrow accounts, DealMaker has fully automated the process to save issuers time and money.

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3. Payouts are Automatic and Enable Faster Access to Capital

The use of digital platforms for capital formation has historically required the use of escrow, adding another inefficient hurdle to the process of accepting payments. Issuers are forced to coordinate manual “closings'' to disburse funds, burdened with fees and delays. Our technology allows issuers to connect their bank accounts directly, accepting and disbursing investment proceeds on an automatic or rolling basis, the same way a merchant does with an online store. 

Taken together, bank-to-bank transfers and express wires allow for higher conversion and faster closings. By not mandating escrow and automating payouts, DealMaker provides issuers with quicker access to their capital than any other technology stack.

Better Investments Means Better Opportunities

DealMaker offers companies raising capital a Shopify-style solution to accept investments directly from their own website, like a checkout for an online store. Our technology has powered over 400 issuers to raise over $1 billion online.

NOTICE: Some issuers may require escrow for their offerings due to legal, jurisdictional, or other compliance requirements. Use of DealMaker Payments is contingent on approval by third-party payment processors as well as compliance review of issuer and its directors.

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Interested in learning more about our payments solutions? Get in touch.

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Ben Barrett

Senior Manager, Strategy & Operations‍

Ben currently leads DealMaker's strategy and operations, and focuses on integrating new business and product lines efficiently and seamlessly with DealMaker's existing product. Additionally, Ben leads payments strategy, ensuring that DealMaker's payments remain best-in-class, and that it constantly evolves. Ben has also worked cross-functionally across Customer Service, Sales and Finance/Back-Office before his current role.