Category Archives: Fundraising and Investing

What 10,000 Kickstarter projects reveal about Canada’s entrepreneurs

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CBC | By Roberto Rocha | April 27, 2017

smarthalo-velo-connecte-20161127In the last six years, Canadians took nearly 10,000 shots at glory on crowdfunding site Kickstarter.

Only about a third succeeded.

But what are these projects? Which are the most successful? Are there big differences between the creative economies of every city?

Crowdfunding sites like Kickstarter, Indiegogo and FundRazr have changed how creative entrepreneurs fund their passions. No longer confined to traditional sources like banks and venture capital, anyone can get money for an idea provided they inspire enough people to cough up cash.

These sites enable people to donate money to fund a project, usually in return for a reward — for example, early access to a new product, a T-shirt or dinner with the creators. The more one gives, the juicier the reward.

The CBC looked at six years of Kickstarter projects with data provided by Web Robots and HiveWire, two firms that track crowdfunding sites. Only Kickstarter data was used, since it has the largest and most representative sample of Canadian crowdfunding projects.

See:  Christopher Charlesworth, CEO and Co-founder of HiveWire, Joins NCFA's Advisory Board

More than half of all Canadian Kickstarter projects are concentrated in the three biggest cities.

It's generally known that Montreal is a hotbed of video game development, while Vancouver has a rich film scene. These are known industry facts, and the Kickstarter data confirms that bootstrapping creators in these cities also operate in these areas.

But some cities seem to flout stereotypes. Halifax, better known for its music, has more game-related projects than other categories.

Equal parts preparation and perspiration

Not all Kickstarter campaigns have the same shot at success. If you want good odds of making it, try funding a play or a comic book. These have the highest success rates: 60% of these types of projects reached their funding goals.

But if you want to fund a tech idea, the cards are strongly stacked against you. Of all the Canadian tech projects on Kickstarter, only about 20% got the money they asked for, making it the toughest category.

And if you don't reach your goal on Kickstarter, you don't see a cent of what users pledged.

SmartHalo, a multipurpose attachment for bikes, is an anomaly. Not only did the project reach its Kickstarter goal, it did it in 15 hours, and is one of the most successful recent projects based in Montreal.

It had a fundraising goal of $67,000. It raised nearly $540,000.

"Early adopters of technology know that's where innovation happens, on Kickstarter," said Xavier Peich, the business director of SmartHalo. "Getting something that no one else has, it's a compelling offer."

See: 5 Things You (Probably) Never Knew About Kickstarter

How Canada compares internationally

Canada is the third-biggest country on Kickstarter in terms of number of projects. Of the 301,000 projects analyzed, fewer  than 10,000 were Canadian, compared to 245,00 in the U.S. and 25,000 in Britain.

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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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NACO hopes its Common Docs will standardize angel investment term sheets in Canada

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Betakit | | Apr 13, 2017

NACO common docs

On Tuesday, the National Angel Capital Organization gathered 100 angel investors and partners in Toronto to mark the launch of NACO’s Common Docs.

The organization has spent the past three months working with Canadian angel investors and founders on standard document templates, meant to act as a guideline, for early-stage startup investments. Open Angels’ Boris Mann and E-Fund’s Peter Dorsman acted as project leads working with Canada’s startup ecosystem.

“There’s all kinds of stories — and I’m sure each of you have your own stories — about the amount of friction and confusion that exists sometimes in deals and the way that they’re done,” NACO CEO Yuri Navarro said during the launch event. “And the sad side effects of that…just the way you structure a deal can actually have a significant, negative impact on a company in the future.”

Navarro said that the goal of Common Docs is to reduce the friction in negotiating deals by having the docs as a starting point, and give both founders and funders a better way to understand how deals are structured.

“This is really a matter of raising the literacy around this stuff from a Canadian perspective. There actually is no central Canadian repository of really anything,” said Mann. “The other thing that we sought to do was answer the question is, what is common? That was definitely something that was starting to come from the NACO membership, even some stories of saying

‘we lost a deal because we were told our terms weren’t market.’ What is common? What’s market?”

In a panel with founders and investors during the event, the speakers touched on some of the pain points that having a central resource could solve.

See:  Angel investing was always male-dominated. That’s finally changing

When it comes to getting more people interested in angel investing, Zoom.ai founder Roy Pereira said it’s important to get more young founders involved. “I think we have to get some of the younger people who had a few exits, or one exit at least, to get more involved in angel groups and crowdfunding,” said Pereira. “I find they’re not interested or they don’t see themselves in these groups. So I think there may be a disconnect, And they’re not investing as much as they could because they don’t see themselves in the community.”

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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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Could Real Estate Crowdfunding Help Millennials Retire Sooner?

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Realty Biz News | Steven Kaufman | April 4, 2017

Crowdfunding Real Estate image

Real estate has long been lauded as a sensible investment for retirement. After all, real estate assets provide a relatively safe way to hedge your portfolio against volatility in the stock market, and they can also provide passive retirement income.

Real estate crowdfunding sites know that retirement is on the minds of many real estate investors. Many work to attract potential investors with self-directed retirements, such as an IRA or 401k, by promising the preservation of capital at an above-market rate of return. Their online platforms allow people saving for retirement to invest in real estate right from the country club golf course. It was no surprise, then, when investors began pouring retirement savings into crowdfunding.

Except for who was doing the investing, that is. Real estate crowdfunding has proven a popular choice for one of the most fickle investing groups in the marketplace: Millennials.

On the surface, it seems improbable. Millennials investing in real estate? This is a group that has been loathe to purchase homes, with less than a third of Millennials becoming homeowners compared to 64 percent of the general population. After a little analysis, however, there are powerful reasons why real estate crowdfunding appeals to Millennials—enough that more are certain to join the crowd of investors in the coming years.

See:  Fintech lures millennial investors away from asset managers

The stereotype, of course, is that Millennials are all underpaid with limited skills and few opportunities. That’s not reality, but even if it were, real estate crowdfunding has very low barriers to entry. Some of the best and most successful crowdfunding portals allow for investment minimums as low as $5,000. That lets Millennials get into the real estate investment game much earlier than previous generations.

Second, real estate crowdfunding is an investment option that allows Millennials to bypass banks. Having come of age during the Great Recession, many Millennials don’t trust financial institutions or Wall Street firms. They do, however, see the need to protect their money from the kind of financial breakdowns that hurt their parents’ retirement plans nine years ago by investing in hard assets. Real estate crowdfunding offers the chance to do just that.

The importance of diversification is another lesson that Millennials learned through observation. Many aren’t willing to rely on the promise that property values will go up indefinitely. They’d rather spread their money across many assets, just to be safe. Real estate crowdfunding makes diversification easy.

See:  Open letter from Millennials to the Real Estate Industry

One of the Millennial attributes that confounds marketers the most is their disinterest in ownership. From albums to cars to homes, Millennials are buying less of everything than the generations preceding them, and it’s not just because they have less money to spend. Many young people prefer to connect than buy, and they want the way they spend their money to say something about how they see themselves. Ownership doesn’t always align with Millennials’ priorities, but investing does. Like every generation, they are determined not to make the same mistakes their parents did.

Real estate crowdfunding appeals to them because it offers the benefits of ownership without the drawbacks of commitment. It allows them to make passive, small investments in multiple properties without being tied down for years in a single home or location.

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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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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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Slock.it secures $2 million seed funding to build Sharing Economy Platform

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Blockchain News | ByRichard Kastelein |

Slock.it

Slock.it has secured $2 million USD in seed funding according to a blog post from founder and COO Stephan Tual.  This round will go towards the development of the Universal Sharing Network (“USN”) project, which seeks to shake up the sharing economy by enabling both companies and individuals to rent, sell or share any connected smart object.

“With the USN, rental apartments and offices will become fully automated, smart objects will be rented on demand and unused vehicles get a new lease on life.” — Christoph Jentzsch, CEO Slock.it.

Since its inception in November 2015, Slock.it’s mission has been to develop the future infrastructure of the Sharing Economy. We’ve codenamed this project the Universal Sharing Network, or “USN”. Build on top of the public Ethereum Blockchain, the USN will provide users a set of mobile and desktop applications to find, locate, rent and control any object mediated by smart contracts, from anywhere in the world.

See:  MaRS Solutions Lab partners with City of Toronto to create sharing economy regulations report

The main advantage of using Blockchain technology in this context is a radically simplified user journey: Open the app > Find an object nearby > Pay for it > Use it. There is only one key (your smartphone) for everything and no need to register or login for the service thanks to a judicious use of security deposits.

The USN’s key differentiators are:

  • Cost effectiveness: we leverage a public infrastructure and therefore do not incur datacenter capital outlays
  • Interoperability: the same network of value used to rent your car can be used by the vehicle itself to pay for its own parking or electricity
  • Security: Ethereum decentralized apps or ‘dapps’ benefit from public/private key cryptography by default, while the underlying infrastructure presents no central point of failure.
  • Transparency: The USN lives on the public Ethereum Blockchain and can be reviewed by anyone
  • Permissionless: developers and manufacturers alike do not need to request permission to leverage the USN as part of their products

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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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Wattpad, Wealthsimple and Overbond Join The Upside Foundation’s 150×150 Challenge to Canadian Startups to Give Back

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Upside Foundation | April 4, 2017

Upside foundation

Over 75 Canadian startups have already pledged to donate equity to charity

TORONTO, ON, April 4, 2017 — Today The Upside Foundation, a national charity that makes it easy for early-stage or high-growth Canadian companies to give back in a meaningful way, announced the launch of their campaign, 150×150: Turn Equity Into Charity. The campaign aims to grow the number of companies who have pledged to give back to 150, as we celebrate Canada’s 150th birthday. Canadian startups who make the pledge will donate a small portion of their equity to The Upside Foundation (typically in the form of stock options), which are converted to cash upon a liquidity event and donated to the charity of the company’s choosing. The Upside Foundation is also announcing several prominent Canadian startups who have taken the Upside pledge, including Wattpad, the Toronto-based entertainment company for original stories, as the first company to kick-off the 150×150 challenge.

“The Upside Foundation provides an easy solution for both early-stage startups and high-growth companies who want to give back but don’t necessarily have the time or money,” said Rob Antoniades, Board Chair and Co-founder of The Upside Foundation. “Through this national campaign, we hope to empower 150 Canadian startups to take the pledge to donate a portion of their equity and help build a stronger future for Canada.”

The Upside Foundation is partnered with Pledge 1%, a global movement founded by the Salesforce Foundation and others to inspire companies around the world about the benefits of early stage corporate philanthropy. Through Pledge 1%, over 1800 companies have donated one per cent of their equity, people or product to charity. In Canada, over 75 companies have already taken the Upside pledge, including Hubba, which raised Series B in funding in December 2016. New members include Wattpad, Wealthsimple, and Overbond, with additional members to be announced leading up to Canada’s 150th birthday.

“At Wattpad, we believe startups aren’t just about profits, they’re about giving back to communities, at home and abroad. We’ve already made a remarkable impact on millions of people’s lives around the world. Today, we pledge to join the 150×150 campaign to demonstrate our continued commitment to positive social impact,” said Allen Lau, Wattpad co-founder and CEO. “Whether you’re in the early stages or a well-established start-up nearing exit, it always makes sense to support charities that serve your users and mean something to your team. If you haven’t already joined the Upside Foundation, what are you waiting for? Join the 150×150 campaign today!”

Any Canadian startup or private high-growth company can take the Upside pledge by committing stock options or warrants that will be converted to cash at the time of an exit or IPO, and donated to a registered Canadian charity.

“I’ve always believed in giving back to the community,” said Vuk Magdelinic, CEO of Overbond. “I’m proud that we have now found a way to make Overbond’s success mean that charities in the community will win alongside us.”

To date, there have been two exits from the Upside network, including BlueCat Networks, which sold for $400 million in February 2017; BlueCat CEO, Michael Harris donated the proceeds from a portion of his stock options to the Enbridge® Ride to Conquer Cancer® benefiting the Princess Margaret Cancer Centre. The first company to exit was Understoodit, who was acquired by EventMobi in 2013 and donated their equity proceeds to the East York Learning Experience and Mentoring Junior Kids Organization. The Upside Foundation is led by a coast to coast Board of Directors and Advisory Board of industry leaders and partners with leading incubators, accelerators and investors – creating a supportive community for members to be a part of.

See:  2017 Canadian Online Funding Directory

“People work at startups because they want to effect change, and the Upside Foundation enables startup employees to have a meaningful impact on their community,” said Mike Katchen, founder and CEO of Wealthsimple. “Our team is proud to join the 150×150 challenge.”

How Companies Can Take the Pledge

The Upside Foundation encourages Canadian companies to join those who have already taken the pledge.

  1. Companies will need to fill out the online pledge form found on The Upside Foundation’s website and a representative will be in touch.
  2. Once the pledge form is received, companies will receive detailed instructions on how to contribute from an ESOP (employee stock ownership plan) or a simple legal form, with flexibility depending on the stage of the company.

Social Links

Website: upsidefoundation.ca/
Instagram: instagram.com/upsidefoundation/
Twitter: twitter.com/sharetheupside
Hashtag: #150×150
Facebook: facebook.com/The-Upside-Foundation-of-Canada-409389922465814/
LinkedIn: linkedin.com/company-beta/3205708

About The Upside Foundation

The Upside Foundation is a charitable organization that allows startups to give back by donating equity in their company to Canadian charities. Early stage companies pledge stock options or warrants to The Upside Foundation, convertible into a small portion of equity.

To learn more about The Upside Foundation visit: www.upsidefoundation.ca


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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