Category Archives: Crowdfunding Voices

Naval Ravikant hints at future plans for Product Hunt and adding secondary trading to AngelList

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Tech Crunch | | May 19, 2017

Earlier this week, at TechCrunch’s Disrupt event in New York, we sat down with AngelList cofounder and CEO Naval Ravikant to talk primarily about the platform’s new Angel Funds product, wherein a select number of proven “angel-operators” is being provided capital from AngelList and outside VCs to invest in a basket of startups. (We wrote about that new program here.)

Of course, while we had him in our clutches, we wanted to talk with him about other directions in which AngelList might move over time. What we gleaned: the platform, which is famous for continuously iterating on its approach and offerings, may eventually use its late December acquisition of the popular product platform Product Hunt to create a paid offering for companies looking to buy specific technologies or products. It sounds like AngelList may also eventually dive into the brisk secondaries business, wherein investors buy up earlier investors stakes in certain companies.

Here are some outtakes of that chat, edited for length and clarity:

TC: Recently, a crowdfunding marketplace, Seedrs, announced that it’s going to launch a secondary marketplace. It could be interesting to see AngelList get into this business.

NR: We are obviously always looking at secondary marketplaces. The problem is how much liquidity can you have for these things. Generally, if you have a really well-known company, like a Facebook or a Snapchat, before their IPO, there’s demand from later-stage investors for a secondary marketplace. But it’s usually concentrated in a very few names.

See:  A British firm plans a secondary market for crowd-funded shares

We work at the very early stage where, frankly, people don’t know the companies. If someone wants to sell, it’s such a negative signal; it’s not clear that there’s a buyer on the other side. But 1,500 companies on the platform have already raised half a billion dollars and they’ve gone on to raise over $5 billion [in subsequent fundraising rounds], so they’re getting larger and larger and larger, and there will be a point where some of those names become so hot that there will be secondary demand. And then if those companies are open to it, we’ll work with them to fill that secondary demand.

TC: We’re also wondering what you’re doing with Product Hunt, which you acquired in December.

NR:  There’s so much innovation going on, and there’s lots of people funding that innovation, but there’s very little innovation on that infrastructure for innovation itself, so we like to do that ourselves to help companies create more tech companies. So what do tech companies need? They need money, they need talent, and they need customers. So AngelList started out with helping them raise money, now we’re the largest startup recruiting marketplace in the world, with 25,000 startups recruiting and about one million candidates. But the missing piece is helping companies find their early customers. And Product Hunt did an amazing job of that. They’ve now launched 90,000 products; they do millions of product discoveries every single month; and it’s kind of the place where teams from Uber and Facebook and Google and lots of startups go to launch their latest apps. So we were always in awe of Product Hunt and we brought them in to kind of complete the third leg of that triad.

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TC: It sounds like that could be a revenue-generating product, showing companies [needing products] who they should be talking to, what the various tech stacks are of different startups . . .

NR: Yeah, I think long term it can generate revenue. In the short term, we’ve left the team completely independent. They’re still executing on the same plans as before we merged up. And all the team and the management is still there.

TC: You also spun off a crowdfunding platform for non-accredited investors called Republic last year. Can you tell us a bit more about that and how involved you are?

NR: Crowdfunding is going to happen — it’s happening in the U.S. — it’s just happening a little bit slower than in the U.K. as [the U.S. government] works out the final [regulations]. And Republic is a spin-out that we did with some of our best people to go and start doing that. It’s still very early; Republic has done a couple of deals, but I think we’re still in the first inning of crowdfunding.

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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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Equity crowdfunding is 1 year old today, Wefunder is top platform

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VentureBeat | | May 16, 2017

Since Regulation Crowdfunding began on May 16 last year, 335 companies have filed offering documents with the Securities and Exchange Commission (SEC) to fundraise on securities-based crowdfunding platforms. Of those companies, 43 percent were funded, 30 percent failed, and the remainder are still open and trying to get funding.

The total capital committed to date on these platforms is in excess of $40 million, with the average successful crowdfunding campaign raising around $282,000 from about 312 investors. The most recent quarter saw the greatest number of companies file with the SEC. This signals that issuers might finally be catching on to the opportunity that Regulation Crowdfunding holds.

And what about the portals that have emerged to host these fundraises? Of the 26 portals registered with FINRA to help companies sell Regulation Crowdfunding securities, nine have already closed, gone out of business, or been shut down. Of those remaining, Wefunder (based in San Francisco and Massachusetts) is leading the pack both in the number of deals and total dollars raised. They have been in business since Regulation Crowdfunding went into effect and have helped 63 companies pull in almost $18 million. Start Engine (in Los Angeles) ranks second with 27 campaigns funded, and Microventures (Austin), NextSeed (Houston), SeedInvest (New York), and Republic (New York) rank third through sixth. Interestingly, the location of these platforms also matches the states that have raised the most capital.

Several platforms (both old and new) have only funded a handful of campaigns. This may signal that brand awareness and marketing by the larger incumbents is driving both companies seeking capital and investors looking for deal flow.

See:  Are Overseas Portals the Next Big Thing in US Equity Crowdfunding?

However, If you dig a little deeper and look at the capital raised during the last three quarters, you will see in that while Wefunder is leading in overall dollars, both Microventures and Start Engine are not far behind in terms of quarterly commitments (see Orange bar to compare Q1, 17 results).

"I expect to see Indiegogo put more time and energy into converting its most successful rewards campaigns into equity campaigns on Microventures."

Microventures, the offshoot of rewards-based crowdfunding platform Indiegogo only launched at the end of last year and is already showing strong results, with 100 percent campaign success. While the platform hasn’t run many campaigns, the campaigns it has run have raised slightly more success than those on Wefunder.

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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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Women & Minorities in Regulation Crowdfunding: High Success Rate Despite Low Representation & Lower Funding Levels

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Crowdfund Insider | | May 2, 2017

Regulation Crowdfunding finished its fourth Calendar Quarter this past March and the data shows that women and minorities have a higher percent chance at hitting their minimum funding target but represent fewer campaigns and receive less capital.

While the overall market is beginning to show signs of traction with over 265 companies trying their hand at Regulation Crowdfunding, the clear majority of them are founded by teams of white men. Given the opportunity for Regulation Crowdfunding to provide on average $300,000 to funded campaigns, this represents a missed opportunity for women and minorities who often find themselves alienated from the capital markets.

Regulation Crowdfunding allows any American startup or small business to raise up to $1,070,000 million from friends, family and followers on debt and equity crowdfunding platforms registered with the Securities & Exchange Commission (SEC).

Just like on donation or rewards sites, issuers launch Campaigns and use their social network to invite people to review their business plans, market opportunity, financial statements and video pitch. However, instead of getting a token of appreciation or a widget, backers get shares in a business or interest repaid on a loan.

See:  SEC Updates JOBS Act Amendments Including Reg CF Funding Cap

Since the launch of Regulation Crowdfunding on May 16, 2016, 265 companies have filed with the SEC. Of those companies, 50% were successful in hitting their minimum funding target and $25.4M was funded to those companies.  With the average campaign lasting only 93 days, compared to the many lengthy and cumbersome alternatives like applying for an SBA loan or seeking VC money, Regulation Crowdfunding seems to be a viable alternative. However, this seems to be true if you are a white male and have more than one founder.

  • Digging into all the offerings, 165 campaigns (62%) were started by White male founders, 43 where there was at least one woman founder, 26 where there was at least one minority, 8 that were run by women-only founders, 14 by minority-only founders and 10 by founders that were both women and minorities.
  • Adding it up, women and minority led companies only represented 37% of all offerings.
  • When filtered for only successful campaigns, 82 companies hit their minimum funding target, closed their offerings and received their funds. Of those 82 only 7 companies were founded by ‘women only’ teams, 6 by ‘minority only’ teams and 1 by a team of ‘one woman and one minority.’ The other 68 were by founders that were white men.
  • When looking at success percentages, campaigns run by women-only founders had an 87.5% success rate compared to 41% for men-only founders. Minority-only founders also had a higher success rate (46%) than men-only founders.

Given the high success rate (particularly compared to VC funding), it is surprising that more women and minorities don’t give Regulation Crowdfunding a chance.

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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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Canada’s biggest obstacle to innovation is attitude

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The Globe and Mail |  | Apr 30, 2017

James MaynardCanada is at a crossroads. Look one way and you’ll see enormous opportunities presented by the Digital Revolution. The other way is business as usual. But in fact, that’s not even an option. If we stand still, Canada’s future prosperity is at risk. There is an urgent need for our country to move beyond extracting natural resources and capitalize on the opportunities presented by the knowledge-based economy.

"There is increasing awareness of the need to build digital competitiveness."

Our country is well positioned to succeed in the digital era – if only we adopt the right attitude. And that is all about thinking like a startup. Large or small, Canadian businesses must adopt the mindset of a startup. Not tomorrow, not next week. We need to start now.

Our federal government recognizes the urgency of this situation. Its Innovation Agenda is aimed squarely at helping Canadian businesses compete globally. But where I see hope, is with our country’s many small and medium enterprises (SME). SMEs with fewer than 500 people comprise 97.9 per cent of Canadian businesses and employ 91 per cent of Canada’s private sector work force. In the past, the large number of small businesses has been seen as a disadvantage; SMEs often don’t have deep pockets or the resources to make a mark globally. But in a time of digital disruption where a team of 55 people at What’sApp can capture a market of half a billion people, SMEs have the agility to pivot with their products and services, to seize opportunities. Think of an 18-foot ski boat and an aircraft carrier. Which would you rather be on when it’s time to quickly change course?

See:  Alternative, Traditional SME Finance Spheres See Growth

There is increasing awareness of the need to build digital competitiveness. Digital transformation is the top strategic priority for 50 per cent of CEOs and investing in new technologies to enable digitization is the top investment priority over the next two years, according to a 2016 survey by Forbes Insights and Hitachi.

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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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Brad Kerr, Advisor, Entertainment and Media

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Brad Kerr, Advisor, Entertainment and Media

Brad Kerr, Advisor, Entertainment and Media

Brad is the CEO and Co-Founder of FundingNomad, an equity-based crowdfunding platform for the best entertainment investment opportunities for accredited and retail investors. FundingNomad is focused on entertainment deals that include stage shows, musicals, film, movie productions, direct-to-digital media, interactive exhibits, recreation, leisure projects, and hospitality - resort real estate developments.

Investors from Canada, the USA and International can create a free account to access fully vetted deals offered by companies with strong track records of success and industry experience. Investors receive equity ownership along with predictable cash flows for projects that have attractive payback times and returns, and in the case of real estate projects are secured by commercial property.

Brad has over 25 years of experience in finance, international business development, technology, and marketing. He has also been an investor and co-founder of various companies around the world including Bee'ah (the largest environmental and waste management company in the Middle East) and Foundation Room (an upscale lounge and nightclub in Toronto).

“As a global equity crowdfunding platform dedicated to entertainment and media deals – and Canada’s first entertainment platform – we’re excited to join the NCFA’s Advisory Board to help advance crowdfunding and alternative financing for all investors and issuers, and encourage new regulations and technologies to make investing easier and more convenient.” Brad Kerr, CEO & Co-founder, FundingNomad

 

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Brad Kerr, CEO and Co-Founder of FundingNomad, Joins National Crowdfunding Association of Canada’s Advisory Board

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NCFA Canada | Craig Asano | April 27, 2017

Brad Kerr, Advisor, Entertainment and Media

Brad Kerr, Advisor, Entertainment and Media

TORONTO, MAY 27, 2017 – The National Crowdfunding Association of Canada (NCFA) today announced that Brad Kerr, CEO and Co-Founder of FundingNomad, has joined the Association’s Advisory Group as Advisor, Entertainment & Media.

Brad is the CEO and Co-Founder of FundingNomad, an equity-based crowdfunding platform for the best entertainment investment opportunities for accredited and retail investors. FundingNomad is focused on entertainment deals that include stage shows, musicals, film, movie productions, direct-to-digital media, interactive exhibits, recreation, leisure projects, and hospitality - resort real estate developments.

“As industry continues to evolve financial and digital technologies and solutions and more licensed platforms enter the market, specializing in a specific industry vertical or area makes perfect sense.  Focused efforts will maximize opportunities for aligned investors and issuers alike generating efficiencies for all.  We're also thrilled at the high interest that FundingNomad has generated from the onset from media and production companies seeking complimentary funding options to support grant funding programs sponsored by government agencies and welcome Brad to the expanding NCFA Advisory Group."  Craig Asano, Founding CEO, NCFA Canada

Investors from Canada, the USA and International can create a free account to access fully vetted deals offered by companies with strong track records of success and industry experience. Investors receive equity ownership along with predictable cash flows for projects that have attractive payback times and returns, and in the case of real estate projects are secured by commercial property.

Brad has over 25 years of experience in finance, international business development, technology, and marketing. He has also been an investor and co-founder of various companies around the world including Bee'ah (the largest environmental and waste management company in the Middle East) and Foundation Room (an upscale lounge and nightclub in Toronto).

“As a global equity crowdfunding platform dedicated to entertainment and media deals – and Canada’s first entertainment platform – we’re excited to join the NCFA’s Advisory Board to help advance crowdfunding and alternative financing for all investors and issuers, and encourage new regulations and technologies to make investing easier and more convenient.” Brad Kerr, CEO & Co-founder, FundingNomad

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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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Crowdfunding the Canadian Knowledge Economy

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Labfundr | Eric Fisher | April 7, 2017

Pre-CCS2017 Mixer

Earlier this month on Feb 28 and Mar 1, I attended the 3rd Annual Canadian Crowdfunding Summit, hosted in Toronto by the National Crowdfunding Association of Canada (NCFA). There was a lot of energy in the room, reflected by #CCS2017 ranking among the top trending hashtags in Canada during the event.

Crowdfunding is helping fund an increasingly diverse range of projects, companies and people. We heard from platforms that are enabling real estate investments, helping make entertainment productions a reality, helping all manner of startups find seed funding, and enabling books to be published. Crowdfunding can also become a key ingredient in sustaining and growing our knowledge economy.

We heard about successes and challenges from the US and UK, which have much more mature crowdfunding industries than Canada. In Canada, the total raised via crowdfunding in 2016 was projected to be $190 million. This is 100x less than the US. Given that our populations only differ by 10x, there is plenty of room for growth.

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Financial technology (fintech) platforms such as online lending, peer-to-peer lending, blockchain crowdfunding, and a socially responsible bank were all exciting models to learn about.

Donation and rewards-based crowdfunding models are straightforward and not subject to regulation, but other alternative finance models face a challenging regulatory landscape. Paths to growth look to be through education and awareness of equity crowdfunding/alternative finance, improving regulations in a collaborative way, and harmonizing the diverse rules existing in different provinces.

Regulators from Alberta, Quebec, BC and Ontario were on hand and engaging in productive dialogues with the industry. Collaborative efforts can improve regulations and encourage more activity in the space, while ensuring legal protection for investors. In a conference filled with fintech, the term “regtech” stood out. Regulatory technology may be a key part of the equation that reduces friction for fintech startups.

Another standout panel was about diversity. Important takeaways were how subtle but powerful language choices made in job listings and company culture can encourage, or discourage, diversity among your staff. Diversity is recognized a key to success. And being new to entrepreneurship, it was inspiring to learn concrete ways to be inclusive as we grow.

I also met several scientists, completely by chance! Perhaps we have some unconscious, nerdy tells that point us toward each other (cause for an experiment, perhaps?).

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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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