Category Archives: Entrepreneurs and Start-ups

ICOs: New Model of Blockchain Capitalism

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The Cointelegraph | By Wassim Bendella | June 19, 2017

ICOs are the hot new thing in the Blockchain community. The idea behind an initial coin offering is that a company promises to build a Blockchain-based product or service.

To raise the funds necessary to the execution of its roadmap, the company issues digital tokens and sells them to contributors, usually all at once.

Contributors can then use these tokens to run the service when it is up and running, hold them or sell them for profit.

More and more Blockchain startups are organizing token sales as a way to raise money upfront in ICOs, a nod to the traditional securities’ IPOs. When last year, these companies raised $260 mln according to the research firm Smith + Crown, they have already raised over $560 mln since the beginning of 2017.

ICOs are considered an alternative to crowdfunding and are transforming the way startups capitalize themselves. It's basically a way for Blockchain startups to raise money outside the accredited system.

While tokens operate in the same way equity stakes do, they cannot be considered the same. Indeed, for securities to be sold, they need to be registered with the Securities and Exchange Commission. That is absolutely not the case for tokens, which are more like licenses people use to access a particular application on the Blockchain.

Breaking records

In 2013, Mastercoin organized a token sale to raise funds and was one of the first projects to use this new type of capitalization. Despite warnings that Mastercoin might just be an elaborate scam, investors braved the risk and contributed what was the equivalent of $500,000 at the time.

Ethereum followed the trend in 2014 and managed to raise $18 mln, although the project lost millions after the Bitcoin price crash that year. From there, ICOs started breaking records little by little, until a decentralized venture capital firm entered history by raising $150 mln in 2016. This firm is the infamous The DAO, which was hacked shortly after and lost $50 mln.

See: How The Blockchain Alliance Helps Law Enforcement With Bitcoin Crime And Developments Like The DAO

Since these ICOs are not regulated by the SEC, nothing can be done by authorities after such events. Startups that issue tokens become self-regulating entities that are independent of third parties, but contributors cannot be guaranteed that the roadmap promised by the founders will be respected. This dubious legal status makes ICOs a particularly risky investment.

No rules

The SEC is currently examining this capitalization method but until something is decided, contributors cannot enjoy any protection on their investment.

Aaron Ting, VP of the Malaysian Investors’ Association, believes:

“It is an investment option for those who have a high risk, high reward appetite.”

“Even though the white paper claims that by purchasing ICO tokens, investors own part of the start-ups’ assets and liabilities and have a claim on its profit, there is nothing much you can do if the project does not materialise and the people behind it take your money and run. There are no rules and regulations to govern the space,” explains Matthew Tan, founder, and CEO of Etherscan.

See: Ethereum's Double-Edged Sword: Will a Rising Price Hurt Users?

Risk appetite

By examining the developments of previously ICO-funded startups, one can argue that not many can be categorized as complete projects today. There is no doubt more time is needed to grow into a successful global company, but big wins in this field could bring more confidence to investors.

Adding to the difficulty of the exercise, it is not easy to distinguish between the genuine projects and the scams. For this reason, industry experts insist that contributors do their due diligence before investing and get deeply familiar with the project founders, its realizability and its potential for mass usage.

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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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Canadians need to come together to take our startup community forward

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The Globe and Mail | by Sir Richard Branson | June 15, 2017

From my first steps as an entrepreneur, I have felt the only mission worth pursuing in business is to make people’s lives better. I have followed the general rule that frustration can be an enormous driver of change if you are good at spotting the opportunities sitting at the centre of a problem. Whether it is the travel industry, health care, the entertainment or leisure sector, this strategy has always worked for me.

Entrepreneurs are better placed than anyone when it comes to spotting these problems and turning them into opportunities. As Canada celebrates its 150th birthday, it is time to fully realize the country’s potential to become a global powerhouse of free enterprise and innovation.

Unsurprisingly most of you agree with this. The newly formed Canadian Entrepreneurship Initiative (CEI) has just produced a report entitled Entrepreneurship: Canada’s Golden Opportunity which reckons more than 70 per cent of Canadians think your country is a good place for a startup business. However, the number that needs fixing is the fact only 40 per cent of people are interested in becoming an entrepreneur. Of those, half of them doubt they could ever succeed.

See: 2017 Annual Alternative Finance Crowdfunding in Canada Survey

Fear of failure and access to funding are two of the biggest issues putting people off taking the bold step to go it alone. For those even considering making that first move, these reasons probably feel like two giant immovable redwoods.

My experience is one can carve a path through that forest and create responsible lending solutions for those looking to start out on their own. We can find more ways to fund and guide entrepreneurs to nurture the future of the Canadian startup scene and help to grow these businesses into international companies of the future.

“As Canada celebrates its 150th birthday, it’s time to realize the country’s potential to become a global powerhouse of free enterprise and innovation,” said Initiative supporter Sir Richard Branson.

For example, in the United Kingdom, our own not-for-profit Virgin StartUp, has found ways to lift the initial burden entrepreneurs face. Virgin StartUp has provided funding to over 1,800 entrepreneurs with £21-million ($35.7-million) in support. It has also provided thousands of hours of mentoring and business advice to entrepreneurs to help guide them through their infancy years. This is part of a British Government-backed startup loan scheme (Start Up Loans Company) which has provided over £300-million to micro-businesses across Great Britain since its launch in 2012.

I’m excited about the launch of the Canadian Entrepreneurship Initiative founded by Ruma Bose. I am especially thrilled we can play a major role in its first program to amplify Canadian entrepreneurs if you have a business seeking support I encourage you to visit entrepreneurshipcanada.ca for the details.

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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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Ask An Investor: Where Should I Incorporate My Startup?

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BetaKitRoger Chabra | June 2, 2017

This week on Ask An Investor, we answer a question on where should founders incorporate their company legally.

To provide a comprehensive answer, I’ve called upon Chad Bayne, partner at law firm Osler, Hoskin &; Harcourt. Chad and I have worked on many companies together over the past decade. He is a veteran of the startup ecosystem, represents many promising startups across North America, and has been involved in countless situations from incorporation, to financing, to exit and everything in-between.

I asked Chad a series of questions on the topic of company incorporation. Here’s what he had to say.


What major things should companies think about and keep in mind when they are deciding where to incorporate their company?

When forming a company, the two primary considerations are the location of the founders and the location of the team.

What are the pros and cons of incorporating in the popular regions that you recommend (e.g. Delaware)

Canada:

Pros:

  • Permits the company’s registered office to be in any Canadian province or territory.
  • Name of the company is protected across Canada.
  • Industry Canada permits electronic filing. (Certain Canadian jurisdictions, such as Ontario, still require physical copies submitted in person in duplicate.)
  • No annual filing fees.

Cons:

  • The company requires 25% of the directors to be resident Canadian directors. (Some jurisdictions in Canada, such as British Columbia, Quebec, New Brunswick, Nova Scotia, and Yukon do not have these requirements.)
  • Because the name is protected across Canada, it is often more difficult to secure a name for the company.

Delaware:

Pros:

  • The most common jurisdiction in the US for incorporation – almost all of the material corporate law related jurisprudence comes out of Delaware courts.
  • All US VC investors and their counsel are familiar with Delaware, so it presents little friction for investment.
  • No state tax payable so long as the company does not have a permanent establishment in the state of Delaware.

Cons:

  • Annual franchise tax payable on authorized capital.

See: NCFA's Annual FinTech and Funding Rooftop Networking Event

Are there specific considerations for Canada-based entrepreneurs? what about US-based entrepreneurs?

For Canada-based entrepreneurs, there are significant tax benefits that result from having a Canadian-controlled private corporation (essentially, a Canadian corporation either incorporated federally, provincially, or territorially) that is not controlled according to law, or in fact by non-Canadian resident shareholders or public companies.

These tax benefits include:

1. Access to the enhanced (i.e. refundable) scientific research and experimental development (SR&ED) tax credit regime

2. Canada-based entrepreneurs have the ability to access their lifetime capital gains exemption on the sale of shares of a qualified small business corporation (the first $800,000+ of capital gains on the same of such shares are tax-free)

3. Enhanced tax treatment for options granted to Canadian-resident employees (including a deferral of the tax payable on the employment benefit resulting from the exercise of such options until the ultimate sale of the underlying shares). In addition, there are certain additional tax savings that may be achieved upon a liquidity event. As a result, it is generally not as tax efficient for Canada-based entrepreneurs to hold shares of a US corporation.

See: For immigrant entrepreneurs, financing is a big problem

"Sophisticated legal counsel with significant cross-border experience (both from a corporate and tax perspective) is in the best position to discuss and weigh the different options with the entrepreneurs."

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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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How to use your blog to fuel startup crowdfunding efforts

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GoDaddy | Ashley Grant | May 26, 2017

Whether you’re attempting to crowdfund an eBook, a documentary, an album release, or some other venture, the goal is the same: You want as many people to learn about your project as possible, and then feel inspired to open up their wallets (er, I mean hearts) to help you fund it. One of the best ways to get the word out about your venture is to blog about it. Using your blog to drive startup crowdfunding efforts could be the difference in making or breaking your fundraising goal.

Start with your current audience, or build one fast

Hopefully, you’ve already been blogging steadily, but if you haven’t, create a blog as soon as possible so you’ll have a place to direct people to learn more about your project. This internet home will be a diary if you will, with behind-the-scenes information and news people want to know.

"You should be blogging at least three to six months prior to your crowdfunding launch. The idea is to whet the appetite of your audience ahead of time so that when you eventually ask for their dollars they will be more likely to give."

It’s like dating in that it starts with a little flirting. Ask for their email address, and message them a bit. People want to get to know you before they financially commit. Then, you have to maintain the relationship by continuing to wow them with your ongoing story. (You don’t just ask them out and never call them again!)

See: The A to Z guide to media relations for crowdfunding

Choose your platform and commence editorial planning

You probably already know this, but not all crowdfunding platforms are created equally. Check out our post on the most popular ones and pick the one that speaks to you. Then, come back here to continue learning about how to blog your way to full funding. Go ahead, I’ll wait…

Welcome back! Now that you have decided which crowdfunding platform to use, it’s time to plan your editorial calendar. You’ll want to determine how often you’ll blog, what you’ll write about, and how you’ll promote the posts. (Launching the fundraiser without a blogging plan is asking for trouble.)

Some things to consider adding to your editorial calendar include:

A post about who you are. People connect to people, and they want to feel like they have a relationship with you instead of giving haphazardly to a stranger.

What you’re raising the money for. Duh! You’ve got to explain what this amazing thing that people just have to fund is.

Why you want to make this brilliant thing a reality. As Simon Sinek so brilliantly said in his Ted Talk:

“People don’t buy what you do, they buy why you do it.”

(P.S. I strongly recommend watching that video before you start blogging about what you’re fundraising for because it gets to the heart of what will compel people to give to you.)

A detailed breakdown of costs. Here’s the thing: If you tell me a clothing line is going to cost $100,000 to launch, I’ll assume you are just money hungry. But, if you tell me that each piece is lovingly handcrafted by a team of seamstresses who spend hours perfecting each element of these outfits, how much the sewing machines cost, and what the money is really being used for, now you’ve made me feel like I’m contributing to a cause, not just your bank account.

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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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DMZ Launches Fintech Accelerator With BMO

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BetaKit |  Jessica Galang | May 26, 2017

Toronto’s DMZ announced that it is partnering with BMO to launch a FinTech accelerator.

The DMZ-BMO FinTech accelerator is an extension of the organizations’ Next Big Idea in FinTech competition launched a year ago. During that competition, startups worked for four months out of the DMZ, which culminated in a $25,000 competition.

The accelerator will operate in the same way as the NBIF competition, and includes a four-month incubation period with six entrepreneurs, mentorship from BMO leaders, and a culminating event where each finalist will pitch their technology to a panel of BMO experts.

FormHero, which took third place in the NBIF competition in 2016, has since gone through a proof of concept of its technology, which automatically finds and fills out the right documents and replaces the PDF process. That technology is now live on the BMO website.

"By partnering together we can make banks more effective in delivering solutions to clients they want quicker, and potentially cheaper."

“Working with BMO has helped us grow our team and our customer base,” said Art Harrison, co-founder of FormHero. “We’ve also been able to expand our lines of business with BMO across multiple areas of the bank.”

For both the DMZ and BMO, the expansion to an accelerator is driven by a shift in the needs of startups, enterprises, and the larger FinTech ecosystem.

See: Toronto's FinTech Networking Event June 22nd

“What I hear a lot from early-stage companies is that they can actually get money. Money is getting easier to come by, Canada has an increasing number of venture capital organizations, private equity. It’s less about money now, and what early stage companies need more than ever are blue chip clients, because that gives them the right respectability to scale their business,” said Andrew Irvine, head of Canadian Business Banking and BMO Partners.

DMZ executive director Abdullah Snobar says that for the DMZ, it’s about doubling down on certain sectors and moving beyond just being a space for startups.

Startups accepted into the accelerator should have the same criteria as the DMZ — having a tech-based product in the market and early revenue. But Snobar indicates that the DMZ is most interest in startups with the most potential to scale.

Applications to the DMZ-BMO Fintech Accelerator program are due by June 25.

Continue to the full article --> here

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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ICOs Going Mainstream? Chat App Kik to Launch Token Sale

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Coindesk | Jonathan Keane | May 25, 2017

Messaging service Kik has revealed plans to launch its own cryptocurrency and ultimately create a new ecosystem for digital services.

The new digital token, called Kin, will be launched on the ethereum blockchain, the second largest cryptocurrency by market cap. Today, the company released a white paper outlining its strategy for Kin, how it will be integrated into the app and how it hopes to create a wider ecosystem for buying and selling digital services.

The Canada-based company, which has raised over $120m in VC funding, said the cryptocurrency will "combat the monopolization" of digital services where a large companies exert more and more control over digital services.

"These companies are the only ones with enough scale to effectively monetize through advertising," said Ted Livingston, CEO of Kik, arguing this makes it difficult for independent developers to monetize their services.

He told CoinDesk:

"We think this is leading to a future for consumers and for society that has less choice, less innovation and ultimately less freedom."

Some of the inspiration for the new token stems from Kik Points, a rewards system for users to access certain features inside the messaging app, but, Livingston said, the firm has been looking at the idea of a cryptocurrency since 2011.

 

Growing an ecosystem

Kik has now outlined multiple steps it will take for the creation of Kin and its ecosystem.

It will launch a token sale for the first Kin later in the summer and begin integrating the cryptocurrency into the Kik app where users buy and sell features and services like stickers, the use of bots and group chat hosting.

"It will also give Kin value on the public exchanges," the CEO said. His company ultimately wants to spread Kin beyond its own app and create a decentralized ecosystem, using Kin, for all digital services.

See: From IPO to ICO: blockchain’s finance revolution

To support these aims, the company will establish an independent non-profit called the Kin Foundation later this year or early next year. The organization will oversee the fair and open growth of the ecosystem, and further manage the Kin Rewards Engine, a financial incentive program to encourage uptake of the cryptocurrency and foster the ecosystem’s growth.

Livingston explained:

"Every day, a certain amount of Kin will be given out to all the owners of the digital services proportional to the number of transactions that they drive in their particular digital service relative to the overall ecosystem."

Continue to the full article --> here

 

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.


TAKE THE 2017 ALTERNATIVE FINANCE CROWDFUNDING SURVEY NOW:

1.     FOR ALTERNATIVE FINANCE ONLINE FUNDING PLATFORMS (Canadian equity, debt, P2P marketplace lending, reward / perk, donation, revenue sharing (royalties), crowdsales and new fintech models)2016-alternative-finance-crowdfunding-in-canada-report-cover

2.     FOR COMPANIES (Startups and Scale-ups interested in raising up to $5M of capital to launch of grow their venture)

3.     FOR INVESTORS (Retail, accredited, VCs, PE, family offices, funding groups)

* Please help encourage participation by sharing this link: http://bit.ly/2perd2N

* Survey Open until:  June 30, 2017

Learn more... about confidentiality, deadline and gift cards

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Toronto Fintech & Funding Event (Jun 22): NCFA-North of 41 Summer Kickoff Networking!

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GREAT FINTECH & FUNDING NETWORKING SESSION!

Sold Out CAPACITY:  Burgeoning Fintech Ecosystem

 


EVENT DETAILS:

Thursday, Jun 22, 2017 (5:30 PM - 9:00PM + )

The Spoke Club Rooftop Patio

600 King St W, Toronto, ON M5V 1M3

thespokeclub.com (map)


REGISTRATION:

$20 Early - SOLD!

$25 Standard- GONE!

$30 Late:  SOLD OUT!

At the door $40 Net Limited Tickets

Hashtag #NCFALive

  • All tickets include entrance to private club patio, food, entertainment, prime networking and cash bar
  • 13% HST extra (we'll pick-up eventbrite platform fees)
  • No refunds prior to 7 days before the event.  Ticket transfers ok.
  • If it rains the event will take place inside the club
  • Checkout photos from last year's Summer Kickoff event here

 

Leave Winter Behind and KICKOFF SUMMER IN STYLE...

Join the National Crowdfunding Association of Canada, North of 41, Aird & McBurney, Borrowell, Equibit Group, and growing list of Fintech Innovation partners in the heart of King West, one of Toronto's hottest districts, on The Spoke Club’s Rooftop patio for a night of revelry and prime fintech networking mixer.  Interested in disrupting the finance industry, raising capital or participating in Canada’s growing alternative finance and fintech sectors? Here's a perfect opportunity to learn the latest market trends from hot startups (stealth mode) and experts, strategize with partners, pitch investors and mingle with Toronto’s burgeoning fintech ecosystem.

This is a Fintech & FUNDING Event for:

NCFA Canada and North of 41 members, affiliates, partners and community as well as anyone interested in networking and collaborating with startups, investors, angels, early stage-focused VC's and industry experts in alternative finance, crowdfunding, fintech, payments, crypto-currency, blockchain ICOs, AI investing and other financial innovation sectors.

  • Companies actively raising capital
  • Investors and syndicates interested in investing
  • Financial innovators looking to partner or collaborate
  • High growth fintech start-ups (stealth mode) or post-launch
  • Funding platforms, dealers, providers and their client networks

The Spoke Club:  600 King St W Toronto

Want to qualify for a DISCOUNTED TICKET?

A limited number of discounted ticket PROMO codes will be issued for those that complete the 2017 Alternative Finance Crowdfunding in Canada survey for funding platforms, investors and companies!

Take the Survey Now

Step 1:  Complete the survey (take it now)

Step 2:  Email info@ncfacanada.org to confirm that you've completed the survey.

Step 3:  Once verified, NCFA will email you a promo code to register with discount.

 

 

Event Partners and Sponsors:

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.


North of 41 is a place to help entrepreneurs expand their business contacts by encouraging interaction and discussion among Investors, Entrepreneurs and Customers. Our networking events are able to bring together key decision makers from across North America.  The goal of ‘North of 41′ is to promote the tech industry and all of the cutting edge innovation that is taking place from coast to coast.  The North American technology landscape is becoming recognized as a hotbed for the technology being developed by innovative entrepreneurs. As an organization, North of 41 brings together venture capitalists, technology stakeholders, entrepreneurs and others in the eco-system.  For more info visit www.northof41.org.


Aird & McBurney LP and Aird & Berlis LLP offer an integration of patent agency and legal services to secure and enforce intellectual property (“IP”) rights. We provide a full range of services in connection with all forms of IP, including patents, trademarks, copyrights, industrial designs, trade secrets and domain names. Our clients range from individual inventors and small start-up companies to universities, hospitals and research facilities to large Canadian and multinational corporations, including Fortune 100 companies. With extensive experience across a variety of industries, clients count on our technical depth and legal guidance to effectively develop, exploit and protect their inventions and innovations. Learn more at airdmcburney.com  |  @airdmcburney


Borrowell helps Canadians make great decisions about credit. It was the first company in Canada to offer credit scores for free, without strings attached, and has over 200,000 users. Borrowell also created Canada’s quickest and easiest personal loan, at rates typically far better than credit cards. Borrowell has a ground-breaking partnership with CIBC, one of North America’s largest banks, to offer a 'one-click' loan to their customers.  For more information please visit www.borrowell.com.


Equibit Group is applying Blockchain technology to establish the world's first peer-to-peer equity and debt marketplace. In much the same way Bitcoin applied digital technology to currency and payments, Equibit eliminates the need for expensive infrastructure and third-party facilitation from depositories or transfer agents. Registration, transfer, settlement and investor relations will all be managed securely and digitally within a decentralized environment. Founded by a former CFO from the securities industry and a team of blockchain development experts, Equibit Group was established to revolutionize the securities industry.  For more information please visit www.equibit.org.

 


 

Community Partners:

 

 

Checkout some pics from last year's "Summer Kickoff" event...

View more photos here....

 

 

 

Innovation is fostered by information gathered from new connections; from insights gained by journeys into other disciplines or places; from active and fluid networks and open boundaries.

 

 

See you there!

If you'd like to get involved with this event please contact us at info@ncfacanada.org

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