Setting Up Ancillary Fees for Your Online Capital Raise on DealMaker
In this article, we'll guide you through the process of configuring ancillary fees within your deal portal. There are three main types of ancillary fees you can set up: flat fees, percentage fees, and a combination of both (flat + percentage fees). Setting up an ancillary fee can be found in the advanced settings of your deal portal, within the Payment Settings tab.
Category 1: Setting Up a Flat Fee
A flat fee is a fixed dollar fee that will be applied to the total investment amount the investor chooses to purchase.
Box 1: Input Your Flat Fee
In this section, you'll determine the fixed dollar fee that will be applied to all investor contributions, regardless of the dollar amount. For instance, if your flat fee is $30, simply insert "30" into this box. Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
Box 2: Setting Up a Fee Exemption Threshold (Optional)
You can choose to set a fee exemption threshold, which means no fee will be applied if the investor's contribution meets or exceeds this threshold. For example, if you set a fee exemption threshold of $100, the fee will be waived for investments above $100. Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
Box 3: Input a Client Message for the Flat Fee
Provide a message to explain the flat fee to your investors. This message will be included on the investor’s payment screen. You can use the following suggested wording:
"(Insert Company Name) is applying a (insert $ amount for flat fee) processing fee on all investments (insert threshold if there is one)."
Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
Category 2: Setting Up a Percentage Fee
A percentage fee is a variable fee that will be charged based on the investor’s total purchase amount.
Box 1: Input Your Percentage Fee
Here, you'll input the percentage fee that will be deducted from the total investment amount. For example, if your percentage fee is 3%, insert "3" into this box. Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
Box 2: Inputting a Maximum Fee (Optional)
You can set a maximum fee, which ensures that the percentage fee does not exceed this value. If you specify a $150 maximum, the fee will not surpass $150, even if the percentage fee of the investment value is greater. For example, if you set a 10% fee and a $100 maximum, the fee will scale up until it reaches $100. At a $500 investment, the fee will be $50, at a $1000 investment, the fee will be $100, and at a $2000 investment the fee will also be $100. Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
Box 3: Setting Up a Fee Exemption Threshold (Optional)
You can choose to set a fee exemption threshold, which means no fee will be applied if the investor's contribution meets or exceeds this threshold. For example, if you set a fee exemption threshold of $100, the fee will be waived for investments above $100. Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
Box 4: Input a Client Message for the Percentage Fee
Provide a message to explain the percentage fee to your investors. You can use the following suggested wording:
"(Insert Company Name) is applying a (insert % amount for percentage fee) processing fee on all investments (insert threshold and/or maximum fee if there is one)."
Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
Category 3: Setting Up a Flat + Percentage Fee
A flat + percentage fee is a combination of a fixed dollar fee that will always be charged, and a variable dollar fee that will be charged based on the total investment amount the investor chooses to purchase. For example, at a $10 flat fee and 10% investment, the fee for $500 will be $60, and the fee for $1000 will be $110.
Box 1 & 2 : Input Your Flat Fee and Your Percentage Fee
In the first box, you should input your flat fee. For instance, if your flat fee is $30, simply insert "30" into this box. In the second box, you should input your percentage fee. For example, if your percentage fee is 3%, insert "3" into this box. Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
Box 5: Input a Client Message for the Flat + Percentage Fee
Explain to your clients that both a flat fee and a percentage fee will be charged. You can use the suggested wording:
"(Insert Company Name) is applying a (insert flat + percentage amount for fee) processing fee on all investments (insert threshold and/or maximum fee if there is one)."
Make sure to click the save button at the bottom right afterwards or your changes will not be saved.
By following these guidelines, you can effectively set up ancillary fees for your online capital raise and provide clear information to your investors regarding the fees they may incur.