Category Archives: Crowdfunding International

So This Just Happened… RED Mountain Hits Their $10 Million Goal on Crowdfunding

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Marketwired Release  | Red Mountain Resort, BC | Feb 16, 2017

Red mountain

"Fight the Man. Own The Mountain." Powers Into Phase II: Fierce & Independent

ROSSLAND, BC--(Marketwired - February 15, 2017) - On August 22, 2016, RED Mountain Resort launched a $10 million crowdfunding campaign on StartEngine.com called "Fight the Man. Own The Mountain." This was the first time a for-profit ski resort explored equity crowdfunding and nobody at RED knew what to expect in Phase I, of the "Test The Waters" campaign. As of last Thursday morning (Feb. 9), RED hit their $10MM Reservation Goal -- an historic achievement within the North American ski industry.

"We went into this campaign feeling that these were uncharted waters," says RED CEO Howard Katkov. "But the response was immediate, passionate, and unequivocal. Our choice to plant the flag for independent skiing and snowboarding during a time of high-profile mergers and acquisitions really resonated."

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Since launch, "Fight the Man. Own The Mountain." has been featured many times in the mainstream press across North America, and has been covered extensively by ski and snowboard outlets. The videos created for the campaign have so far received over half a million views.

Equity crowdfunding is a new style of investment and RED's choice to accept a relatively low minimum reservation of $1,000 allowed "everyone from lifties to Learjet owners" to make a reservation for this unique equity financing campaign. (And they did!) RED's campaign on StartEngine will continue to take reservations as they prepare their auditing and legal documents to be provided to investors for Phase II, which is scheduled to launch in the Fall of 2017.

"Our goal was to hit $10 million in reservations by April, but we managed to hit that number months in advance. We now sincerely hope that a large percentage of the RED fans that pledged their support will convert their reservations to a real investment when the Phase II launches this fall," says Katkov.

There are two exciting aspects of "Fight the Man. Own The Mountain." in investment terms. The first is the "Last In, First Out" feature. What this means is that investors in Phase II -- whether they're in for $1,000, $25,000 or more -- would receive their investment back before all previous equity investors. The second is the "rewards" associated with each level of investment, from lift tickets, custom skis or snowboards, season and family passes and access to a purpose-built clubhouse and overnight cabins. These rewards are laid out in the StartEngine platform.

RED Mountain is the oldest ski resort in Western Canada and has been the site of many firsts: First World Cup ski race in Canada; one of the largest terrain expansions in North America in over 40 years… This campaign marks another first -- the opportunity through equity crowdfunding to own a slice of world-class ski resort for as little as $1,000.

"The groundswell of support from the snow community, the press, and investors has been nothing short of astonishing," says Katkov. "The success of the campaign, thus far, has been a nice reminder of just how passionate and free-spirited the ski and snowboard community really is. It's been an incredible winter so far and I've had a number of guests come up to me and say they booked their ski week at RED after hearing about us through the campaign. Some of them invested, some of them didn't, but all of them sensed that we have something special going on in Rossland and needed to check it out in person. And to us, that means more than anything. We can't wait for what the future holds."

Visit RED's Crowdfunding campaign page here

RED Mountain Resort

RED is the last great, unspoiled resort. Located in Rossland, BC, 1st stop on Canada's famous Powder Highway, RED delivers 2,877 acres of pristine, unfettered skiing. RED recently added nearly 1,000 acres of intermediate to advanced terrain on Grey Mountain. With 7.6m of annual snowfall, (cheap!) in-bounds cat-skiing, and the friendliest locals around, it's no wonder the New York Times voted us their #8 "Best Place in the World to Visit in 2013." Other recent wins include Powder's "Ski Town Throwdown," and "Most Underrated Resort" by Skiing. Fresh turns that you don't have to fight for -- that's RED.

Source:  Red Mountain Resort Release

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Kickstarter Acquires Huzza, Opens First International Office

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Kickstarter Blog | Bridget Best |

Kickstarter and Huzza

We have two big announcements to share with you today. First, we’ve acquired Huzza, a really exciting company that shares our vision of serving independent creators. And second we’ve opened our first international office, based in Vancouver, Canada.

Huzza was founded in 2015 by two talented entrepreneurs — Justin Womersley and Nick Smit — who set out to bring musicians and their fans closer together through live video. When we first experienced the product they built, it immediately struck a chord. It was intimate, it inspired personal connection, and it was clear how it would strengthen the best parts of Kickstarter while bringing our community to life in new ways.

So last year we teamed up to bring that experience directly into Kickstarter, and together we launched Kickstarter Live. In the few months since introducing it, hundreds of creators have invited tens of thousands of new fans to tune in to live broadcasts — from intimate musical performances, and live product demos, to instructional gameplay tutorials, and private dance rehearsals. Check out the upcoming streams here.

See:  KickStarter Live will let creators livestream their campaigns to the world

These behind-the-scenes invitations into the creative process have brought artists and audiences closer together, and helped creators generate greater support for their ideas at the earliest stages of development. The average viewer spends more than 16 minutes per stream engaged with creators. And those creators have have enjoyed a 74% success rate — more than twice the site-wide average. It’s still new, but we’re excited where it’s trending.

With the acquisition of Huzza, Justin and Nick now join Kickstarter full-time to develop Kickstarter Live in exciting new directions. We’ve opened a new office in Vancouver’s historic Gastown neighborhood where they’re building a team of engineers and designers to help them lead that work. Join us! We have a number of openings in Vancouver right now.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Alternative, Traditional SME Finance Spheres See Growth

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| Jan 9, 2017

Need funding

The past few years have seen some of the largest changes in the history of small business lending, and that evolution hasn’t been stifled by borders. Across the globe this week, new small business lenders emerged, new data on SME lending rates surfaced and new initiatives to provide small business with access to capital launched — in both the traditional and alternative spheres.

$50 million in financing from the British Business Bank landed at Funding Circle, on the condition that the funds be used to finance SMEs, reports said this week. The investment by the BBB in the alternative lender signals support from the state-run bank for the industry overall, though the BBB is also working to introduce stricter requirements for firms like Funding Circle to protect both investors and borrowers. The latest investment round brings the total funds the BBB has provided to Funding Circle up to more than $122 million, reports said.

$4.7 million has been financed to startups via a new venture from InnoVen Capital, an India-based venture capital company that formed its Credit Assistance Program. The initiative aims to provide the startups within its portfolio with access to traditional financing so they do not have to rely on venture financing to seek funds. Members of the program include both traditional and non-bank players, like RBL Bank, Standard Chartered and Tata Capital, reports said. According to InnoVen Capital, its hand in helping startups seek a bank loan means banks feel more secure about financing such a young company.

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60 minutes is all it takes for Barclays to approve of an SME loan, thanks to the launch of its newest small business lending service on the mobile app. The U.K. lender is now reportedly the first bank in the nation to offer nearly instant small business loans through a mobile app, positioning it in competition with alternative and marketplace lenders whose initial selling points were to offer a streamlined, online and accelerated small business lending process. Barclays is currently offering the new service to select SMEs with good credit and strong growth potential. But it has a ways to go: Research the bank conducted prior to the launch of the tool found that nearly a third of SMEs that agreed a loan would boost their business ultimately decided not to apply.

60% of SME invoices are paid late in the U.K., a statistic that Amicus Commercial Finance said reveals the need for small businesses not only to diligently manage cash but to access external financing when clients don’t pay up. According to Amicus’ latest research, existing payment agreements apparently aren’t long enough for suppliers’ clients: 16 percent of invoices remain unpaid after 90 days, and 7 percent go six months without getting settled. Medium-sized companies with between 40 and 249 employees were the worst effected, the report found.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Title III Crowdfunding For Real, Part I

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Forbes | Mary Juetten | Dec 20, 2016

title-iii-crowdfunding

After attending the fifth annual Global Crowdfunding Convention in Las Vegas (which I wrote about here), I was approached by a reader who proposed I interview companies that had raised capital through Title III of the JOBS Act. A newer provision that went into effect in May of 2016, Title III allows for non-accredited investors to purchase equity in companies, which means that the average American can now buy shares in private companies.

Grant Harvey, co-founder of Gravity Pull Media, lined up eight companies for me to interview. In this first installment of a three-part series, I talk with Michael Moormeier of MobileSpike, Josh Hare of Hops & Grain, and Jeff Annison and Paul Scanlan of Legion M.

Mary: Tell me about your company.

Moormeier: MobileSpike, Inc. (MS) is a company that saves lives by employing our MobileSpike Vehicle Disablement System to stop high-speed police chases, with the simple push of a button. In America, someone dies every single day from high-speed chases, and the tools police use to stop them is more than 40 years old. MobileSpike is a proven, patented, disruptive technology that’s taking aim at a market worth more than $30M and in desperate need of a modern solution.

Hare: At Hops & Grain Brewing (HG), we make beer to enhance the human experience through engagement with our brand, our team, and our community. We foster a culture of transparent and open dialogue with our customers and our employees to grow the most sustainable business possible.

Annison & Scanlan: Legion M Entertainment, Inc. (LM) is the world's first fan-owned entertainment company. We work with established Hollywood creators to develop movies, TV, and VR projects owned by fans. By uniting a community of fans who are emotionally and financially invested in our projects, we make these projects more likely to succeed and create a sustainable competitive advantage. Our goal is $M investors (in fact, our logo is the Roman numeral for 1M), which would result in a capitalization of about $500MM.

Mary: Did you raise capital outside of crowdfunding?

MS: In 2008, while in development of our original Gen1 system, MobileSpike raised $1.2M through a Reg. D raise spread over 18 months.

HG: We opened our brewery in October of 2011 with private investments from friends and family. Since then, we've financed our most recent expansions, which started in the fall of 2013, through debt financing with Able Lending based in Austin, TX.

LM: We launched the company in March and raised just over $400K from friends and family to get things off the ground.

Mary: Tell me about your Title III raise.

MS: At the time of our first Title III raise, no one had ever done a Title III. With that in mind, we set our sights on simply hitting the minimum, which was $50,000. Of course, one always hopes for more, and our documents reflected such hope. In the end, we raised $112,000 in a short and very exciting 60 days.

HG: Our target raise for our Title III crowdfunding was $250,000, and in 8 weeks, we raised the maximum allowed by law, $1M. Our Title III raise ended in mid-August.

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LM: We were one of the very first companies to launch a Title III on May 16, and we were one of the very first to close a $1M round. Our Title III was only open for three months, but was heavily oversubscribed, with approx. $1.4M worth of commitments for a round that was legally capped at $1M. We could satisfy some of the extra demand by moving approximately $300K from accredited investors to a parallel Reg. D round, but ultimately, we had to return about $100K of people’s money, which was disappointing on both sides.

Mary: What was your biggest challenge with Title III?

MS: The biggest challenge we faced was not having one single person to consult with on best practices . We have always believed that “the best way to succeed is to find someone who has already done it, and do exactly what they did.”

HG: The biggest challenge that we saw with Title III was explaining the platform to interested investors given that it was so new . Our raise was incredibly successful, but what I've seen observing other companies using the same platform is that without a strong and engaged base of social media followers, it seems to be difficult for many companies to communicate the potential for their brand, especially with startup brands.

LM: Our biggest challenge with Title III was raising awareness for our company and explaining the JOBS Act. We’re a brand-new company, using brand new laws to raise money in a brand-new way. We were starting with people who had never heard of us or the JOBS Act, and ultimately, we needed to convince them to enter their bank account information on a site they had never heard of before. It wasn’t easy to overcome this, but over time, we figured things out. One of the keys was creating a members-only private Facebook group that allowed potential investors to come inside, mingle with existing investors, and see what we were all about. The energy and enthusiasm in this group is contagious, and it has been instrumental to our success. We’re building more than a company—we’re building a community and a movement. As the JOBS Act becomes more mainstream, we can spend less time explaining the history and more time showcasing our company.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

 

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Victory: Gust Wins Crowdfunding Patent Infringement Case Against AlphaCap Ventures

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Crowdfund Insider | | Dec 20, 2016

david-rose-gust

Two Year Patent Troll Case Ends in Triumph as Gust Refuses to Settle in “Giant Win” for Crowdfunding Industry.

Gust, the “world’s largest community of entrepreneurs and early-stage investors”, has won a huge victory in court that impacts the entire crowdfunding industry. Today Gust announced the end of a two-year court case originally brought against it by the patent assertion entity AlphaCap Ventures. Crowdfund Insider covered the case originally in early 2015 when it was discovered that AlphaCap Ventures had filed a patent infringement lawsuit against 10 different crowdfunding platforms. We posited at the time that AlphaCap may have tried to pick a fight outside its weight class. Gust has now claimed victory as US District Judge Denise Cote found the case “exceptional” under 35 U.S.C. § 285, described as a rarity in patent cases, and awarded Gust over $500,000 in attorneys’ fees and costs, against both the plaintiff and the plaintiff’s counsel, Gutride Safier LLP.

The patent lawsuit filed by AlphaCap claimed ownership over “online equity financing”. As with most other patent lawsuits, the case was brought in the Eastern District of Texas.  This court is known as a patent troll haven and has benefitted economically from an assumed bias in favor of trolls.

Nine of the defendants, including some of the biggest names in crowdfunding like Indiegogo, AngelList, GoFundMe, RealtyMogul and more, decided to settle and skip a prolonged legal battle. Gust decided to go to war. David Rose, Gust founder and CEO, vowed to fight the case all the way to the Supreme Court if necessary.

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Speaking with Crowdfund Insider, Rose explained his motivation to confront the AlphaCap patent troll and stand up for the emergent industry;

“We decided to fight the case the minute we were served. For a host of reasons it was obviously a completely bogus case from the very beginning, and it was apparent—to us AND to the troll, as they later admitted and the judge confirmed—that they would have no chance whatsoever of winning if it went to trial. So my first attempt was to rally the other defendants, get everyone to throw in a few dollars, and take a united stand at beating down the troll. But because there is always at least a tiny chance that you could lose in court, and because litigation can be frightfully expensive whether you lose or win, the others decided—from their perspective, probably quite rationally—to optimize their short-term economics and pay tens of thousands of dollars to make the ‘nuisance suit’ go away.”

“Unfortunately for the troll, however, I’m just not built that way. Since we felt certain that as long as we were willing to keep fighting, we would ultimately win, from Day One we put a standing offer on the table to the troll: pay our legal fees, give us the patents, and go home. This drove their attorneys absolutely crazy, to the point that they were screaming at our lawyers “it’s not supposed to work that way!”

So they continued to attack, assuming that as the costs mounted we would eventually give in. But I’m a strong believer in principles, and one of them is “millions for defense, but not one cent for tribute”. Besides, I felt that Gust, as the oldest, largest and most comprehensive online platform, had an implicit obligation to stand up for the industry that we had helped create: for those who hadn’t yet been sued, for anyone who would want to enter the online funding industry in the future, and even for those who had chosen to settle rather than fight.”

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Bundeep Singh Rangar, CEO Fineqia, Joins National Crowdfunding Association of Canada’s Advisory Board

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NCFA Canada | Craig Asano | December 14, 2016

Bundeep Singh Rangar, Advisor, Global Debt Markets

TORONTO, DEC 14, 2016 – The National Crowdfunding Association of Canada (NCFA) today announced that Bundeep Singh Rangar, CEO of Fineqia International Inc., a UK regulated platform and associated services to support and administer debt and equity security issuances such as corporate mini-bonds, has joined the Association’s Advisory Board as Advisor, Global Debt Markets .

Bundeep Singh Rangar has more than 20 years' combined experience in finance, banking, consultancy, technology and media. He has incubated and is the CEO of Fineqia Limited, an international platform for financing debt securities, PremFina Limited, a financier of UK insurance premiums and CEO of IXL Holdings, a European company that has secured more than £200 million in debt financing for UK lending companies from European banks. He previously founded IndusView, an India-focused advisory firm based in London and Delhi.  He has been a senior advisor to high-growth technology start-ups such as Skype SA, and multinationals such as India's largest IT services co. Tata Consultancy Services, the world's No.2 mobile operator T-Mobile (UK), U.K.'s top telecom BT Plc and Europe's top carmaker Volkswagen AG.

“We're very excited to have Bundeep's finance and banking experience join the Association to facilitate strategic partnerships and provide further insight into market developments in private debt placement markets globally.  As a public company listed on the Canadian Securities Exchange (CSE), Fineqia International (FNQ) offers investors unique access to participate in international fintech propelled venture funding markets", said Craig Asano, Founder and Executive Director of NCFA Canada.

Crowdfunding is here to stay. Its transformational effect is already being felt by small businesses and fast-growing start-ups across the world.  The consequences of accepting or thwarting it are incredibly consequential for the economy, particularly small businesses that are the engine of growth and employment in countries such as Canada, the US and the UK. A Canada-wide harmonisation of innovation friendly laws and regulations is now needed to make crowdfunding a valuable part of the country's financial ecosystem.  – Bundeep Singh Rangar, CEO, Fineqia

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About National Crowdfunding Association of Canada

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. For more information please visit: www.ncfacanada.org.

MEDIA CONTACTS:
Craig Asano
casano@ncfacanada.org
416 618 0254

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The UK government invests £85 million in peer-to-peer lending sector where the watchdog has ‘concerns’

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Business Insider UK | | Dec 13, 2016

rate-setter

LONDON — £85 million of taxpayer money is invested in the peer-to-peer (P2P) lending sector, an industry where the financial regulator identified "evidence of potential investor detriment" in a report last week.

The state-owned British Business Bank (BBB) has £60 million invested on Funding Circle, £15 million invested on MarketInvoice, and £10 million on RateSetter, according to a Freedom of Information request seen by Business Insider.

The Financial Conduct Authority (FCA), Britain's finance regulator, on Friday flagged "concerns" around the growing complexity of the peer-to-peer market. The FCA writes in its report: "Firms’ desire to maintain confidence in platforms has occasionally led to firms acting in a nontransparent manner, masking true loan performance and exposing investors to risks."

While the FCA does not identify any specific firms in its report, it flags certain practices such as intervention by peer-to-peer lenders to influence loan performance and lending to provision funds (special vehicles meant to pay for a certain amount of investor losses). RateSetter has both made an on-balance loan to a business it crowdfunded a loan for and restructured its provision fund to allow bail-ins.

Peer-to-peer lending platforms are marketplaces for loans, connecting borrowers with people willing to invest their own money in those loans for good returns. The BBB invests platforms that allow it to extend loans to small businesses.

The BBB began investing on Funding Circle and MarketInvoice in 2013 and RateSetter in 2014. It undertook extensive due diligence on each platform before committing the money. But FCA CEO Andrew Bailey told Business Insider in an interview last week: "It's a fast-moving, evolving industry. Some of the directions in which it's going off are posing some quite big challenges in terms of transparency and fairness."

John O'Connell, Chief Executive of the TaxPayers' Alliance, told Business Insider over email: "This is extremely concerning and taxpayers will want to know how this can be good use of their money.

"The wider question is why taxpayers are funding loans to begin with. There are answers to be found on how to increase lending from commercial banks, but the Government stepping in with a taxpayer-funded alternative should not be one of them."

The British Business Bank was set up by the government in 2012 with £1 billion of funding to increase funding to small and medium enterprises (SMEs). It does not finance SMEs directly but works through partners and intermediaries to extend funding.

A spokesperson for the British Business Bank told Business Insider: "Peer-to-peer lending platforms have the potential to be a successful delivery model for small business finance. Investing in these, and other kinds of platforms is a vital part of our remit to foster a more diverse small lending market for smaller businesses; indeed more than 10,000 smaller businesses across the country have already benefited from our partnership with Funding Circle.

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"One of our four strategic objectives is to manage taxpayer resources efficiently and within a robust risk management framework. The return across the British Business Bank programmes between 2015-16 was over 2%."

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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