Category Archives: Equity Crowdfunding

Indiegogo Founder Slava Rubin Talks Equity Crowdfunding on Reg CF Anniversary

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Crowdfund Insider | | May 18, 2017

Indiegogo was originally envisioned as a vehicle to sell securities in small companies to the masses. That was back in 2008 and, as we all know, the regulatory environment had not yet caught up to the realities of a world with internet access. Thus Indiegogo pivoted and dove into the perk-based crowdfunding world. Since then, Indiegogo has helped to raise over $1 billion for projects and businesses around the world.

When President Obama signed the JOBS Act into law back in 2012, most people thought regulators would move rapidly and build out the rules that would allow companies to raise capital online.

That did not happen. The wheels of government can move rather slow.

It took four years for each of the crowdfunding exemptions to be completed. The final being Title III of the JOBS Act, the crowdfunding exemption that has received the most popular attention from the media.

See:  Indiegogo Could Soon Dominate Equity Crowdfunding

While Title IV (Reg A+) and Title II (Reg D 506c accredited crowdfunding) of the JOBS Act allow issuers to raise a lot more money online, Title III or Regulation Crowdfunding (Reg CF) was ostensible positioned to benefit the smallest startups or the mom-and-pops in need of growth capital. Ignored by VCs and Angel investors, and being too small for bank loans, these companies clearly lacked access to capital. Thus Reg CF was born.

In May 16, 2016, the new exemption went into effect. Newly minted “funding portals”, a type of broker-dealer light entity that could sell these securities online, listed the first investments under Reg CF. One year later, over $35 million has been raised for more than one hundred small companies.

As it stands today, Wefunder and StartEngine lead the space with most dollars raised. But Indiegogo, a late entry into Reg CF crowdfunding, is quickly catching up.

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Launched in partnership with MicroVentures (First Democracy VC), an already established accredited crowdfunding platform, Indiegogo has diligently pushed into investment crowdfunding. In stark contrast to the free-wheeling, wild-west world of perk-based crowdfunding, Indiegogo has taken a more selective and conservative approach.

Out of twelve crowdfunding rounds listed by Indiegogo, twelve have fully funded. So Indiegogo is batting a thousand. As far as we know, there is only one other active Reg CF portal that can claim the same.

The deals are interesting too. From a restaurant in Washington, DC, Republic Restoratives, raising $300,000 to the Field Guide of Evil (a film) raising half a million dollars.

On Tuesday, I hopped on the phone with Slava Rubin for a quick update as to how he things are progressing for Indiegogo in the equity crowdfunding side of his business. Rubin, co-founder and Chief Business Officer of Indiegogo, passed the mantel of CEO to David Mandelbrot at the beginning of 2016. He is still very much engaged with Indiegogo and is spending his time focusing on innovation and growth.

Rubin said the Reg CF Anniversary was super exciting and they are generating real data and feedback on selling securities online;

“We launched in the middle of November, so only half the amount of time in operation. We are 12 for 12 for businesses that have reached their target. We are at a 100% success rate.”

I asked Rubin if he is seeing any parallels to the perk-based platform.

“There is no question there is a benefit to the history and experience with the perk business. We have worked with thousands of entrepreneurs and millions of backers. That comes with  a lot of people having a good experience and trust. We are building our trust in equity crowdfunding. It has been very helpful.”

Rubin said that it was exciting to see Indiegogo alumni raise funding on their investment side. The perks side is a funnel for potential investment rounds. Rubin also added that having the large existing network of backers has been helpful in getting the businesses funded. “Many times these investors are complete strangers,” said Rubin.

Asked if equity crowdfunding had matched his expectations?

“Yes. Things are going well. It is early, but we expect more growth to come.”

Rubin explained they were receiving a ton of inbound requests because of awareness from their perks side. He said they are making certain that issuers are solid companies. Perks is open but equity – not so much. While he did not know the exact acceptance rate, Rubin said they were far more companies applying than getting posted. Sometimes they will provide feedback to a potential company telling them they need to wait or work to accomplish some more milestones. Sometimes they go to other equity platforms too.

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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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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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Robin Ford, Former BC Securities Commission Executive Commissioner, Joins National Crowdfunding Association of Canada’s Advisory Group

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NCFA Canada | Craig Asano | May 16, 2017

Robin Ford, Advisor, Governance and Regulation

VANCOUVER, MAY 16, 2017 – The National Crowdfunding Association of Canada (NCFA) today announced that Robin Ford, Former British Columbia Securities Commission (BCSC) Executive Commissioner, has joined the Association as Advisor, Governance and Regulation.

After 25 years as a public-sector lawyer and regulator, Robin is now consulting in the areas of financial services regulation, governance, and compliance.  She has extensive experience working with and advising regulators and the regulated, leading projects and teams, and facilitating organizational change.

Robin has served as Executive Commissioner at the BCSC, Chief Counsel, Insurance at the UK Financial Services Authority, and legal adviser to the UK and British Columbia Governments.  She played an important role in an ambitious program of regulatory reform and in integrating 9 regulators into the newly formed UK FSA, as it became a more analytically disciplined, risk-based, and outcomes-focused regulator.

“Having such a highly experienced and capable senior ex-financial services regulator join the NCFA Advisory Group speaks volumes about how much the regulated crowdfunding sector in Canada has developed and its potential to raise, lend, or share capital and facilitate investment. We’re very pleased to have Robin join the community to help bridge the gap between regulators and the alternative markets and to support regulations that are both suitable for online financial marketplaces and globally competitive.”  Craig Asano, Executive Director, NCFA Canada

“I was delighted to be asked to join the Advisory Group of the NCFA, which has already achieved so much to facilitate developments in the crowdfunding sector. I look forward to contributing on regulatory and governance issues." Robin Ford, Former BCSC Executive Commissioner

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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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Peter-Paul Van Hoeken, CEO and Founder of FrontFundr, Joins National Crowdfunding Association of Canada’s Advisory Group

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NCFA Canada | C. Asano | May 9, 2017

Peter-Paul VanHoeken_NCFA Advisory

Peter-Paul Van Hoeken, Advisor, Investment Crowdfunding

TORONTO, MAY 8, 2017 – The National Crowdfunding Association of Canada (NCFA) today announced that Peter-Paul Van Hoeken, CEO and Founder of FrontFundr, has joined the Association as Advisor, Investment Crowdfunding.

Peter-Paul is Founder and CEO of FrontFundr, a FinTech company focused on supporting start-ups and young ventures in Canada with access to capital through innovative online investment-based funding solutions.

Peter-Paul has over 15 years of experience in finance, investment management and business consultancy. He worked in Vancouver as director business development with a finance & investment company in the renewable energy space and as finance director of a real estate investment fund. Prior to that he held a number of positions with several global banks in the areas of corporate strategy, corporate & investment banking and he worked as a senior management consultant in The Netherlands. Peter-Paul is a director of the National Board of the Private Capital Markets Association, PCMA (Canada) and holds a masters’ degree in Business Economics & Finance from the Erasmus University Rotterdam, The Netherlands.

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“We’ve had the pleasure of working together with Peter-Paul to advance the growth and development of the equity crowdfunding ecosystem in Canada since the beginning.  He’s shown utmost commitment to make this industry work and thrive, and on behalf of the Association we’d like to thank Peter-Paul for his professionalism and early leadership.  We look forward to continuing to work together to achieve transactional efficiencies to the benefit of all stakeholders including platforms, companies and all types of investors.” Craig Asano, Founding CEO, NCFA Canada

“Investment crowdfunding unlocks a tremendous dispersed pool of capital and democratizes investing in young companies. It redefines the way that young companies look at their investors and customers. Eventually, they will become the same. I am honoured joining the NCFA Advisory Group contributing to a healthy and prosperous investment crowdfunding industry in Canada." Peter-Paul Van Hoeken, CEO & Founder, FrontFundr

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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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Now OPEN: 2017 Annual Alternative Finance Crowdfunding in Canada Survey

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NCFA Canada About Us | Craig Asano | May 8, 2017

2017 NCFA Survey Banner 2 (resize)

The National Crowdfunding Association of Canada has announced the launch of its 3rd alternative finance crowdfunding survey in Canada for platforms, investors and companies as part of its annual exercise in providing Canadian benchmarks on market size, volume, market activity, platform characteristics, jobs, and key stakeholder sentiments.

Crowdfunding leverages technology, the internet and digital marketing to streamline the process of raising capital from a full stack of investors while filling an under-serviced funding gap in venture markets.  As technologies, markets and models continue to evolve in alternative finance and fintech crowdfunding markets globally, everyone from policy makers to portal operators and industry participants to economic development agencies have a need to better understand the emerging landscape that is on its way to being an integral part of raising up to $5M of capital online to launch, grow, and commercialize ventures.

  • Last year, NCFA published the first comprehensive set of industry-led research in a
    2016-alternative-finance-crowdfunding-in-canada-report-cover

    Download last year's 2016 Industry Report

    groundbreaking study titled, 2016 Alternative Finance Crowdfunding in Canada report, that benchmarked industry growth at 48% from 2013-2015 and predicted the 2016 market volume to be $190 million (Download the report now).

  • This year in 2017 in addition to our annual Canadian platform survey, we are expanding the scope of the survey to capture both investor and company sentiment which will provide a richer view of perspectives and help identify key insights and challenges relevant to market development and participation.   Help us measure industry growth and Take the survey now (5-20mins)

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)

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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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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