Category Archives: Crowdfunding Interviews

Sign of the times: Crowdfunding for scientific research

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Ottawa Citizen | By Elizabeth Payne | June 13, 2017

Eric Fisher is a biochemist who was headed for a career researching heart disease when he abruptly changed course. Now, instead of doing his own research, he has created a crowdfunding platform to help other scientists raise money to continue their work at a time when money for science is scarce.

Labfundr, as the platform is called, is a sign of the times for science funding in Canada.

See: Crowdfunding the Canadian Knowledge Economy

Halifax-based Fisher, who did an undergrad degree at the University of Ottawa and a Ph.D. in biochemistry from Dalhousie University, said he was stunned to see the troubles Canadian scientists were facing when it came to getting funding.

Changes in recent years at the country’s main biomedical research funding body, the Canadian Institutes for Health Research, have caused turmoil in the research community and left many wondering how they can continue their research because funding dollars are increasingly scarce. CIHR reforms included changes to the peer review system and how funding is distributed, among other things.

“There is sort of a quiet crisis brewing. It really is a huge problem,” said Fisher.

He was interested in the crowdfunding phenomenon, which has been successfully used around the world to raise money for scientific research and engage the general public in science — no small thing in an age of alternate facts and anti-science undercurrents.

In Canada, he found, there was no platform to help launch crowdfunding campaigns for scientific research.

“A lot of countries have science crowdfunding platforms. Canada is a little behind in a lot of ways.”

See: Scientists turn to crowdfunding to help pay for research

In the U.S., for example, the American Gut Project, which studies the microbiome, has been called one of the largest crowd-sourced, citizen science projects in the country.

Fisher calls the project, which has raised more than $1 million and engaged many people in science, the “rockstar” of the science crowdfunding world. In addition to raising money for the research, it involves the public by allowing people to compare the microbes in their gut to thousands of others. Similar crowdfunded, open-sourced gut projects are underway in other countries.

LabFundr launched its first crowdfunding campaign last month — to raise $10,000 for CALIPER (Canadian Laboratory Initiative on Paediatric Reference Intervals), a national study of health indicators in Canadian children based at Toronto’s SickKids Hospital. The money raised will be used to expand a database of blood test values taken from healthy Canadian children to provide medical professionals with a tool in clinical practice.

Healthy blood test values, or reference intervals, are typically used by doctors to determine if a patient is healthy or unhealthy. Such intervals for children and teens are lacking, said Dr. Khosrow Adeli, lead researcher for CALIPER.

“This kind of database will assist pediatricians from across the country and around the world in making healthcare decisions for our children.”

Fisher said crowdfunding can fill funding gaps and might support work that helps researchers later receive major funding. It also helps engage and educate the public about scientific research.

“I think things have evolved and now scientists don’t have the luxury of being able to work in the lab and not talk to the public. The anti-science sentiment is proof of that. Science needs to reconnect with the public – that is almost more important in the long-term than helping to fill the funding gaps, which are absolutely urgent.”

Fisher also said he thinks he can have a bigger impact by creating Labfundr than doing research. “I see this as a way I could have a big positive impact.”

As to whether a shift to crowdfunding means governments will be less inclined to support scientific research, Fisher said the two are not comparable, but crowdfunded projects can complement larger-scale research.

 

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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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Detecting terrorism financing in crowdfunds poses ‘significant challenge’: Fintrac report

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GlobalNews | | May 18, 2017

Canada’s money-laundering watchdog is studying the use of crowdfunding platforms by suspected terrorists and says in an internal study that the reporting protocol poses a “significant challenge” in trying to identify such transactions.

The Fintrac report, obtained by The Canadian Press through an Access to Information request, says there is a lack of information available in electronic fund transfer reports on contributors to crowdfunding campaigns.

Financial companies, money services businesses and casinos are legally required to submit the reports to Fintrac for cross-border, electronic transactions above $10,000.

That lack of information poses a problem for financial intelligence, “especially when trying to flag individuals supporting a crowdfunding campaign that may be suspected of being (terrorist financing)-related by an investigative authority,” Fintrac says in the November 2015 report.

See:  Anti money-laundering watchdog assessing vulnerability of fintech startups

The federal agency said the reports typically don’t include information on contributors to crowdfunding campaigns because the amounts transferred tend to fall below the reporting threshold of $10,000.

“Terrorism financing and high-risk traveller cases, in particular, most often entail relatively small amounts of money,” spokeswoman Renee Bercier said in an email.

Daryl Hatton, founder of ConnectionPoint.com, a company that runs three crowdfunding websites, said they don’t have to submit funds transfer reports because that is the duty of the payment processors.

“The short answer is that crowdfunding platforms leverage the anti-money laundering systems of our payment processors,” Hatton said in an email.

“We add our own checks on the identities of the people running the fundraising campaigns but trust the much more sophisticated work our partners are doing in this area.”

Hatton said he has removed a “very small number” of campaigns over terrorism financing concerns. The decision to remove the campaigns was made in collaboration with payment processors and was done more as a precaution, he said.

Craig Asano, the executive director of the National Crowdfunding Association of Canada, said it’s important that there are mechanisms in place to detect such transactions.

See:  In Crowdfunding, Who is Responsible for Preventing Fraud?

The Financial Action Task Force, an international organization that aims to combat money laundering and terrorist financing, flagged crowdfunding as an emerging terrorism-finance risk in a 2015 report.

The task force report said crowdfunding platforms are vulnerable to being exploited for illegal purposes because people can mask the true reason for their fundraising efforts.

It also said there have been instances in Canada where people under investigation for terrorism-related offences have used crowdfunding sites before leaving the country or attempting to leave the country, suggesting that they could be using that money to fight overseas. But details of those cases were not provided.

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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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Ulule wants to be the “best” crowdfunding platform instead of the biggest

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Betakit | | May 10, 2017

If you’re in North America but outside Quebec, it’s entirely possible that you’ve never heard of Ulule. That’s not to say that this crowdfunding platform isn’t worth noticing. With a focus on quality rather than volume of projects funded, Ulule has an impressive 67 percent success rate: quite a contrast to the 31 percent on Kickstarter or 13 percent on Indiegogo.

“Our mission is not to make the biggest crowdfunding platform in the world. It’s to make the best crowdfunding platform.”

This past Thursday evening, Ulule celebrated its second anniversary in Montreal with a panel about crowdfunding, and a party in their new loft space. This office, in the startup-heavy Mile End neighbourhood, not only includes physical space for the Ulule team, but a seating area where projects using their platform can work under the guidance of the company’s “success managers,” along with an events space for product launches and community events.

“Our mission is wider than only a web platform,” said co-founder and CEO Alexandre Boucherot. “The needs of creators and entrepreneurs are much wider. It’s important, in our opinion, to try and invent ways to give them the best chances of success.”

Founded in France in 2010, Boucherot brought Ulule to Montreal to see if the same things that made the platform successful in Europe would translate to the Quebec market.

“We have a big focus on the coaching of projects, and the success of the project,” Boucherot told BetaKit. “Our mission is not to make the biggest crowdfunding platform in the world. It’s to make the best crowdfunding platform. And we think that crowdfunding platforms are not only about funding, but about success: finding a market, finding a public, a community.”

See:  Ulule launches The Big Step and will contribute $30,000 to high-potential France/Canada initiatives

By vetting and coaching all projects, Ulule is able to ensure that many more of their users reach their goals.

With a team of 45 people based primarily in Europe (seven in Montreal), and having been certified as a B Corporation in October 2015, the company hopes to continue their growth, while maintaining their goals for positive social impact.

They have partnered with National Bank to create a competition called Le Grand Sault (The Big Step) that gives an additional $30,000 to three projects based in France or Canada ($10,000 each). Last year’s winners included Le Geebee, an electric bike/scooter hybrid; Le Kit du Jardinier-Maraîcher, a film project that documents the daily activities of an urban farm; and Loupp, an ethically made weekend bag.

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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.

Save 40% On Sale NOW:  3rd Annual Canadian Crowdfinance Summit (March 1, 2017, Toronto)

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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Startup Canada Podcast: National Crowdfunding Association founder shares the keys to crowdfunding the right way

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Betakit | Startup Canada | Nov 8, 2016

crowdfunding-startup-canada-podcast

Do you have a product that could be the next big Internet sensation? The king of crowdfunding, Craig Asano, provides an environment in which products that often go unknown, have the chance to find financial and commercial success.

“Crowdfunding has gone through a tumultuous history of what it is, but it’s continuing to evolve,” he said. “At its core, it’s about leveraging the internet and social media to aggregate and pool small contributions of capital to get a venture off the ground or prototype developed or to commercialize a business.”

In this week’s #StartupPodcast, host Rivers Corbett talks with Asano about crowdfunding in Canada, the best platforms to use, and ways to raise funding for your startup or product using crowdfunding. Also, they talk about where the entire crowdfunding movement is going and what it means for your business.

Listen to the Podcast --> here

The Startup Canada Podcast Show is a production of Startup Canada, a grassroots, entrepreneur-led movement to bring together, celebrate, and give a voice to Canada’s entrepreneurship community. On the podcast, award-winning entrepreneur host Rivers Corbett speaks with the movers and shakers of Canada’s entrepreneurship community to give a glimpse into the future of business, and share insights on everything from social innovation to the future of work, investing, and why we need to think bigger to take our businesses global. Join Rivers Corbett for new episodes every Tuesday airing at 10 AM ET for lessons, trends, and opportunities in entrepreneurship from Vancouver to Fredericton; and Israel to Peru.

You can find every episode of The Startup Canada Podcast Show at www.startupcan.ca/podcasts/.

 

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Downing Head of Crowdfunding Julia Groves: “FCA Review Is Most Welcome”

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Crowdfund Insider | | Nov 2, 2016

julia-groves-ukcfa

Julia Groves, Downing Partner and Head of Crowdfunding, is a respected pioneer and force behind many successful digital businesses and fintech groups. Since founding ba.com for British Airways in 1994, she has instigated disruptive customer-led propositions across online retail, renewable energy and financial services market sectors.

She also developed the crowdfunding platform Trillion Fund, co-founded the UK Crowdfunding Association (UKCFA) which represents over 40 operating equity, loans and rewards crowdfunding platforms, before recently landing at Downing. In addition, Groves is a Senior Fellow of the Finance Innovation Lab, a Founding 50 member of Innovate Finance and recently completed a Non-executive Director position with Move your Money.

As a “straight-talking and passionate about making finance more democratic and energy more sustainable,” Groves works to connect innovators, platforms and investors more efficiently to originate change and induce financial reward. I recently had the pleasure of connecting with Groves via email to learn more about her views on crowdfunding regulation, Brexit, the FCA-CCAF partnership and her new role at Downing.  Our interview follows:

Erin: The FCA is in the midst of a review of crowdfunding regulations. What is your opinion of the process?

Julia: The review is most welcome, and comes at a good time. It is always helpful to engage early and before anyone has developed any fixed opinions!

Erin: Do you expect additional or updated rules? If so, which changes do you predict? Do you have any suggestions as to what issues need to be addressed? Do you believe there is sufficient transparency?

Julia: Overall I do not feel there is a need for any major change to regulations at this stage, rather we need to ensure the current regulations are more accurately and consistently interpreted by the FCA authorisation team and the industry alike.

I think it would be well worth applying the higher regulatory standards of investment-based crowdfunding to loan-based, so platforms know who is lending and can better evaluate what is appropriate and what is not, but that is not a view held by all. On the lending side the issue is clarity on what exactly is covered by the 36H rules and what is not.

Erin: Where do innovative platforms cross the line into bank-like and fund-like activities, which may mean they need additional permissions from the FCA? Is there general consensus within the industry as to the status of existing regulations?

Julia: The consensus is that the regulation is largely appropriate and proportionate and achieves a good balance between opportunity and protection for everyday investors. Particularly on the investment side we are all agreed. If it ain’t broke…

See:  UK Alternative Finance Grows by 84% to £3.2 Billion in 2015

Erin: How will The Cambridge Centre for Alternative Finance (CCAF) partnership with the FCA influence or aid in the regulatory review process?

Julia: This is a very welcome move – we need to regulate based on fact, not perception. I wasn’t impressed to see the FCA refer to a blogger in their Call for Input, nor by the fact that they no longer collect platform data from us. There is no more credible partner than the CCAF and I have a high level of confidence in its methods and the resulting quality of data.

Erin: Can the industry support the existing number of platforms?  Do you foresee a consolidation going forward?

Julia: I think we are already seeing consolidation, this is completely normal in a new industry and will make those who survive stronger. As an ex-CEO of a startup it is heartbreaking to have to face up to the probability that your own platform won’t succeed, but there is a dearth of skills in crowdfunding and fantastic opportunities to partner and grow. We are seeing established investment firms coming into the market – with the advantage of existing deal flow and investors. There has also been a slowing of new start-ups, but I hope the innovators keep coming through – financial services needs diversity and is a huge market for those that can solve the crowdfunding trilemma of Platform-Product-People.

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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 1300+ 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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After Misjudging Market, Connected Bike Maker Vanhawks Has Been Resurrected with a New Approach

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Techvibes | Brenda Bouw | Oct 18, 2016

The Vanhawks Valour campaign raised just over $820,000 on Kickstarter.

The Vanhawks Valour campaign raised just over $820,000 on Kickstarter.

Vanhawks, maker of Valour, the world's first smart carbon fiber bicycle, has resurrected itself with a new marketing plan after coming close to shuttering earlier this year.

The Montreal-born company, which was a sensation on crowdfunding platform Kickstarter in 2014 before falling into financial difficulties, says its plan includes a hybrid sales model with both online and in-store sales.  It's a chance in direction from its online-only sales model that promised to disrupt the bike industry.  The now Toronto-based Vanhawks also says it has lined up promising partnerships in the bike industry to help influence sales of its product, which is a $1500 USD bike that can be connected to smartphones via bluetooth and track rider statistics, such as route and speed, in real-time.

"My whole effort for the last few months has been around partnerships, as opposed to throwing money at solving problems," Sohaib Zahid, a cofounder and CEO of Vanhawks, said in an interview on Tuesday.  "I have solved it by forming partnerships with people I think will help and believe will put us back on track."

He won't yet name the partners, or the dealers readying to sell the bikes in the U.S. and Canada, but said Vanhawks is 'gearing up for 2017'.

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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 1300+ 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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