Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Equity Crowdfunding, Alternative Funding
Rise of peer-to-peer Business Lending in the UK
Funding Circle via Stephen Pritchard | Aug 14, 2014
Funding Circle, a leading peer-to-peer lending portal in the UK, just celebrated their 4th birthday - blog post here.
To date, Funding Circle has faciliated over £330 million to over 5,500 small businesses across the country, creating an estimated 16,500 jobs. To celebrate, we’re publishing an infographic which tracks the rise of peer-to-peer business lending right up to this year, when the industry became formally regulated.
Infographic Highlights:
2008 - 2010
- Financial collapse of Leman Brothers -> banks retrenched and tightening lending
- Created huge financial gap with small businesses negatively impacting their ability to hire and grow
- Struggling businesses start seeking alternative sources of finance triggering a P2P lending boom in the UK and US
- More than £60 million loans were facilitated through Funding Circle in the first 30 months
View:
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NCFA hosts Crowdlending panel discussion with InvestNextDoor and GroupLend
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Time to take a peer-to-peer loan?
2013
- UK government invests £100 million in non-traditional lending channels of which £20 million was lent out through Funding Circle's marketplace within a 10 month period
- 5 local councils sign up to Funding Circle to lend small businesses to boost economic growth
- Universities start lending with all interest put towards the creation of student scholarships
- Funding Circle's marketplace grows to 30,000 lenders including government, councils and universities
2014
- FCA publishes peer to peer lending rules to provide additional consumer protections signalling the maturity of the industry
- Announced in the budget that ISA eligibility will be extended to P2P lending, making P2P a savvy option for seasoned investors
- UK government reaffirms its commitment to the peer-to-peer lending industry and loans an additional £40 million (out of a total £300 million to alternative lending channels)
- Independent research by NESTA reports that businesses borrowing through Funding Circle on average increase employment by 27%, with the portal creating a total of 16,500 jobs across the UK
View the original source --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | About Crowdfunding or contact us at casano@ncfacanada.org.
How Much Venture Capital are Kickstarter and Indiegogo Hardware Projects Raising?
CB Insights | August 11, 2014
When crowdfunding first emerged as a popular model to raise money from groups of individuals, many pundits felt that crowdfunding would create a competitive threat to the venture capital model of financing startups.
Today, it’s apparent the crowdfunding phenomenon has indeed affected the VC ecosystem – as a complementary force.
With thousands of consumer-oriented hardware campaigns looking for financing for everything from smart watches to beacon technologies, crowdfunding platforms such as Indiegogo and Kickstarter have provided VC investors with a valuable source for dealflow.
This report – the first of its kind – analyzes CB Insights financing and crowdfunding data to identify trends among crowdfunded hardware companies that began on Kickstarter or Indiegogo.
The Data
This report draws on the great earlier research of Matthew Witheiler of Flybridge Capital Partners and analyzes 443 hardware projects that have raised over $100K on Kickstarter or Indiegogo. Using this data, we examined how many of these 443 companies have raised outside venture capital equity financing and other associated trends.
Summary Findings
- $321 million – Total VC financing to-date to crowdfunded hardware projects
- 9.5% – The percentage of crowdfunded hardware campaigns that have gone onto raise VC
- 2013 – The momentum has been building as might be expected and 2013 was a big year for funding. 2014, if the current run-rate continues, we will see a new deal high for crowdfunded hardware campaigns.
- 5x – The amount of investor-backed companies and outside funding to Kickstarter hardware campaigns vs. Indiegogo
- Misfit, Formlabs and SmartThings – The top 3 most well-funded crowdfunded hardware startups (un-exited)
- Unrelated – Surprisingly, there doesn’t appear to be a relationship between the amount a campaign raises on a crowdfunding platform and the amount it raises from VCs.
Funding to crowdfunded hardware companies booms in 2013
Venture funding to crowdfunded hardware startups went mainstream in 2013, reaching over $200M across 23 deals. The bulk of activity came in Q4 2013 when 10 startups including Scanadu, Formlabs and Misfit Wearables raised over $150M in aggregate funding. The largest round of 2013 went to virtual reality company Oculus VR, which raised a $75M Series B in December from investors including Andreessen Horowitz, Formation 8, Spark Capital and Matrix Partners. Only a couple months later in March 2014, Facebook announced the acquisition of Oculus for $2 billion marking the largest windfall to-date for a crowdfunded project.
In 2014, investor deal activity to crowdfunded hardware companies is on pace to break 2013’s record with 19 deals already in the first seven months of the year. If the current run-rate continues through the end of the year, 2014 will see over 30 deals.
Among the largest 2014 VC deals to crowdfunded hardware projects are smart bulb startup Lifx, which raised a $12M Series A led by Sequoia Capital after previously raising $1.3M on Kickstarter and a $10M Series A led by Khosla Ventures to home security product Canary. Canary previously raised just under $2M in one of the most successful hardware campaigns on Indiegogo to date.
Hardware projects on Kickstarter raise over 5x the amount of investor funding as Indiegogo
Both Kickstarter and Indiegogo are themselves venture capital-backed. While Indiegogo has raised over $56M from VCs including Kleiner Perkins Caufield & Byers, Institutional Venture Partners & Khosla Ventures, Kickstarter has disclosed just $10M in funding from investors including Union Square Ventures.
View: Crowdfunding vs VC seed rounds and which makes sense?
But of the 443 hardware campaigns analyzed that had raised over $100K, Kickstarter projects clearly dominated as the platform of choice. Of note, 82% of the crowdfunded hardware projects on the list were Kickstarter-backed.
The most well-funded crowdfunded hardware startups
The disparity in outside funding to Kickstarter vs. Indiegogo hardware campaigns is largely due to a small number of companies that have raised sizable financing rounds to date. In fact, of the top 10 hardware startups that have raised the highest amount of outside capital – 7 were Kickstarter projects (Misfit, Scanadu and Canary were Indiegogo projects). Given it has already exited, Oculus VR, which raised $91M prior to its acquisition, was not included on the list.
Continue to the full article --> here
Introducing CrowdfundSuite – Alternative Lending, Investing & Funding Solutions for Business
CrowdfundSuite | Bret Conkin | August 11, 2014
Vancouver, BC – A new funding hub was launched today to enable both existing crowdfunding channel players and interested private capital industry stakeholders to successfully navigate and profit from the exploding Alternative Funding sector. CrowdfundSuite provides platform access, services and education across the spectrum of rewards, debt and equity crowdfunding models.
“Powerful forces are turning the capital markets on their head yet alternative funding is still in it’s infancy,” stated CrowdfundSuite Founder Bret Conkin. “The plethora of online platforms, revolutionary new North American securities regulations and social media’s growth are key factors to the disruption facing broker dealers, banks, angel groups, financial and legal advisors, and other industry players.
"We started CrowdfundSuite to help our clients profit by identifying alternative funding strategies and bringing new crowd capital solutions to market.” -- Bret Conkin, Founder, CrowdfundSuite
Expert Consulting Services and Education for Industry Stakeholders
The CrowdfundSuite team has helped raise over $40M since 2012 and has assisted leading platforms; broker dealers and other industry stakeholders develop effective strategies and solutions to participate in the crowd capital boom. The space is complex but the fundamental shift to greater venture capital access is a game-changer. While consultants have emerged to assist entrepreneurs with campaign management, we discovered a huge resource gap for expert assistance to organizations from new platforms to service providers to business associations and even enterprise. Contact us to learn more.
One-Stop Access to Leading Platforms – Choose your Funding Model
Crowdfund Suite launches with access to 3 industry leading platforms creating more options for investors and providing a funding escalator for entrepreneurs that grows with each venture.
- InvestNextDoor is the Crowdlending marketplace for small businesses across North America to borrow directly from investors. Great returns with big impact for local investors. Small businesses pay a nominal fee to set their own rates and terms creating better access to capital of up to $300,000.
- FundRazr is a global Rewards platform launched July 2010 with over $52M raised to date in 20+ countries. Business, artists, organizations or non-profits can fund projects or causes via donations, new product pre-order or contributor perks.
- SeedUps Canada is a a curated Canadian Equity Crowdfunding platform launched in January 2014. Enterpreneurs looking to raise $250,000 - $2 Million in the Exempt market can access support services and investors. Investors tap interesting early stage companies, connect with co-investors and bid on valuations.
- Other industry leading platforms will be added including in the area of US equity crowdfunding and real estate crowdfunding.
Tabitha Creighton of InvestNextDoor says “We are very pleased to partner with CrowdfundSuite to help businesses access the capital they desperately need to thrive and succeed from innovative alternative funding sources, like the InvestNextDoor marketplace."
About CrowdfundSuite:
Crowdfund Suite was created to help clients extract clarity from the complexity of the crowd economy so they can thrive and profit. CrowdfundSuite founder Bret Conkin is a visionary in alternative funding that started Canada’s first crowdfunding platform in 2008 and then helped FundRazr become a top 10 global rewards and donations platform. Bret is an Ambassador to the National Crowdfunding Association of Canada, a frequent venture funding event speaker, most recently Funding Roadshow 2014, and he has been frequently quoted in the press on crowdfunding and marketing including in The Globe and Mail, Vancouver Sun, Yahoo Finance and The Guardian.
Stay informed on the new crowd economy on our blog.
About InvestNextDoor:
InvestNextDoor is a Crowdlending marketplace where individual investors lend money to small businesses in their community. InvestNextDoor is hitting the reset button on borrowing and investing for Main Street.
About FundRazr:
FundRazr is the easy, effective rewards and donations crowdfunding platform for everyone. Over 40,000 people, groups, and non-profits in 36 countries have raised more than $52,000,000 with FundRazr.
About SeedUps
SeedUps Canada is a CrowdFinance platform where ordinary investors can find, evaluate and make direct investment into privately held small to emerging companies seeking growth capital.
# # #
Media Contacts:
Bret Conkin, Founder
bret@crowdfundsuite.com
http://crowdfundsuite.com
778-323-7297
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | About Crowdfunding or contact us at casano@ncfacanada.org.
Five things you need to know about the economics of crowdfunding
Financial Post | Chris Grouchy, The Next 36 | July 25, 2014
With Kickstarter projects now the topic of dinner party conversations, it’s important for entrepreneurs to understand the economics of crowdfunding platforms. These platforms can be launch pads for complex hardware to be brought to the world, or allow artists, makers, and people with far-reaching ideas to get exposure. But before you can leverage them as part of your arsenal of funding avenues you need to know how.
The Next 36 allows entrepreneurs to learn about innovation from some of the best professors at leading global universities. Earlier in June, Christian Catalini, assistant professor of MIT’s Sloan School of Management, travelled to Toronto to deliver a lecture on crowdfunding. I had the opportunity to sit in. Here are some of my key takeaways:
Hot projects attract a larger crowd The crowdfunding culture is about winning and hopping on projects that will win — and win big. Our propensity to back a project increases the more funds that a project has already accumulated, Prof. Catalini said. In practical terms, the closer a project is to reaching its goal, the more capital will be received.
Information disclosure One of the major disincentives of crowdfunding is that competition in your space will immediately be able to identify your market strategy and value propositions before you even enter. Especially in the hardware space where product iterations are far from cheap and time between iteration cycles is greater than software, the incumbent could, in theory, use its access to capital to make their product just as good as yours — or better — in a shorter amount of time.
View:
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Video: Why these product, cause and community-based campaigns are successful
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Already backed by millions, Startups turn to Crowdfunding for marketing
Changes in the VC landscape The explosion of infant ventures that have emerged from crowdfunding technology may have the VC community feeling a bit antiquated. Sam Altman, president of U.S. accelerator Y-Combinator, recently wrote in a blog titled Valuations, “Crowdfunding (probably the most important new force in startup investing) is providing more competition for early-stage investments, and hedge funds and private equity firms are starting to do a lot more late-stage investing.” That means startups now have the ability to receive early-stage, non-dilutive capital on crowdfunding platforms.
A commonly known piece of value provided by angel investors and VCs is that they can provide advice to the entrepreneurs they fund. However, this isn’t possible or always relevant when an entrepreneur seeks funding through crowdfunding platforms. As Robert Schiff writes in McKinsey on Society, “Just because you live in the United States doesn’t mean you have very much advice to give an entrepreneur in Uganda.”
Prof. Catalini makes the argument that many “crowdfunders” may not be the best advisors for infant startups, whereas VC firms can leverage their expertise to help their portfolio of companies succeed (see http://a16z.com/team/ for a good example of this). By turning to crowdfunding, some startups could be crowding out the mentorship that comes with professional investors.
Continue to the full article --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | About Crowdfunding or contact us at casano@ncfacanada.org.
Six Rules for Investment Crowdfunding Success
Crowdfund Insider | By | July 29, 2014
Crowdfunding is a new source of entrepreneurial finance allowing a wider audience to invest in startups for equity in the venture. While investment crowdfunding as a vehicle for financing early stage ventures is gaining momentum on a global basis it remains in its infancy. Our research on crowdfunding has been augmented by information gleaned from interviews of twenty different crowd investors from three different platforms including; Seedmatch, FundedByMe and Seedrs. The highlights below are the direct result of our study of crowdfunding investment decision-making at the Copenhagen Business School. The article summarizes the study into six rules that entrepreneurs should be attentive to in order to raise captial through equity crowdfunding.
Engage
Engaging the investor community is a key ingredient to running a successful crowdfunding campaign. Engagement consists of three phases: before, during and after the campaign. Successful entrepreneurs are present and approachable on different social media channels and they respond to questions promptly. Good communication only works if the company embraces transparency. The crowd expects to get all new information about the company immediately.
Research indicates that crowdinvestors are highly sensitive towards entrepreneurs’ interaction with the community, e.g. the quality of an answer to a question posted in the forum. Strategies for continuous involvement with investors during and post-investment are essential. A recent study highlights that “playing a role in the entrepreneurial process” is a central motive of many crowdinvestors. Managing expectations, asking for feedback and leveraging the capabilities of the crowd can create value for the business. Regardless of tone it’s important to listen and react to all of this feedback: entrepreneurs should consider suggestions, discuss them as a team, and respond to investors sincerely. Inviting investors into the entrepreneurial process is part of the fun and enjoyment of crowdinvesting. But through all of it entrepreneurs must stay true to their vision.
View: 10 step guide for successful equity crowdfunding (by SeedUps Canada)
Neglecting the importance of investor relations ultimately deteriorates the chances of achieving the funding target and increases the risk of facing frustrated investors post-investment.
Proof-of-concept
Crowdinvesting is an attractive source of finance for very early-stage companies. Nonetheless, entrepreneurs thinking about running a campaign need to evaluate whether their business has enough traction to entice the crowd. Businesses solely based on an idea are doomed to fail. Every registered customer, signed partner, award, won competition or dollar earned is an indication of whether the business model works and increases credibility among potential funders. The majority of previous crowdinvesting projects have such a “proof of concept”, and can proof the viability of their product and service offerings through first live tests and measurements. prove.
Video:
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Equity Crowdfunding for Real Estate in Canada (Google Hangout, Crowdinvesting)
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Canada's equity crowdfunding market takes tips from the UK
Numbers Game
Other than in reward-based crowdfunding numbers play a vital role in the context of crowdinvesting. Financial forecasting is an important exercise for the entrepreneur to have a rough idea of how the business may develop. However, it is important to be realistic and humble in forecasting the businesses development. Sure, a great “hockey stick” analysis looks appealing to both the entrepreneur and potential investors, but our insights reveal that most investors are sceptical about the numbers presented by entrepreneurs. Particularly valuations of the business are often considered to be inflated, not reflecting the “real” value. Valuing the business requires a good balance between being humble and greedy by the entrepreneur. While crowdinvestors are less rigorous about valuations than traditional providers of risk capital, they still pay close attention to these factors and use them to get a better idea of the entrepreneur’s traits. One investor stated, “It does never make sense to invest in crowdinvesting on the basis of the valuation of the company. They do not have a clue how to do their valuation.”
Continue to the full article --> here
The New Broker Dealer – More Focused Brain Work and Less Manual Labor
Crowdfund Capital Advisors | Jason Best | July 24, 2014
Broker dealers of the distant past (circa 2010) who worked in the private capital markets never thought their jobs would change. They thought only other industries could be disrupted by the Internet and technology. They assumed investment banking was secure because securities regulations written in 1933 and 1934 were fixed in place. It was generally assumed that public solicitation of private stocks would never be allowed.
Fast forward to 2014 – Parts of the JOBS Act are in full effect, general solicitation has been lifted, and the average American is about to be allowed to partake in the private capital markets. Everything is changing and some are still in denial. Remember what happened to most travel agencies in the 1990's?
View:
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NCFA's Response to the OSC's Proposed Multilateral Instrument 45-108 (Crowdfunding Prospectus Exemption)
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Video: Equity Crowdfunding for Real Estate in Canada (20mins)
Unlike travel agencies that could fully be displaced by websites (learn: Disruptive Innovation), broker dealers play a critical role in the capital markets. However the time has come for them to make some radical shifts in how they approach their businesses. Here are three things every broker dealer needs to be working on now to avoid the same fate as the travel agents who said "why would anyone buy an airplane ticket himself? It’s too difficult!"
- Much time and resources will be spent on background and diligence checks for the many new issuers entering the market. Looks at ways to outsource this. Leverage powerful and scalable due diligence technologies that go way beyond just the basic "bad actor" checks. This will allow BDs to focus their time and resources on what they do best: curating deals, matching them to investors, and raising serious cash.
- Look at every step in the transaction process to see how new technology solutions can replace skilled professionals needing to shuffle paper or run process. In doing so, BDs can increase transactions and decrease the number of hands that have to touch everything. Nothing replaces the judgment of seasoned professionals in making the decision to work with a client or not. But seasoned professionals shouldn’t conduct their work like it is 1985.
Continue to the full article --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us or contact us at casano@ncfacanada.org.
NCFA Hosts Equity Crowdfunding for Real Estate Panel Discussion
NCFA Canada (About Us) | Gabe Nasr | July 24, 2014
How equity crowdfunding for real estate makes investing in real estate a reality for the common investor, and boosts local community development
Real estate investment crowdfunding is growing exponentially in international jurisdictions including the US. Learn about the potential of equity crowdfunding for residential, commercial and community re-development projects in Canada and how it works.
Recorded July 2014: Listen to an equity crowdfunding for real estate expert panel discussion hosted by NCFA Canada featuring Tim McKillican, President of Open Avenue, Doug McLean, CTO of Joi Media / Katipult, and Commercial Real Estate lawyer and NCFA Advisor, Albert Lin (24 mins in total length).
Google Hangout Panel Participants Include:
Tim McKillican, Founder and President, Open Avenue
Albert Lin, Commercial Real Estate Lawyer, NCFA Advisor
Doug McLean, CTO at Joi Media / Katipult
Hangout: Equity Crowdfunding for Real Estate in Canada
Category : Crowdfunding
Hits : 65844
Recorded July 2014: Listen to an equity crowdfunding for real estate expert panel discussion hosted by NCFA Canada featuring Tim McKillican, President of Open Avenue, Doug McLean, CTO of Joi Media / Katipult, and Commercial Real Estate lawyer and NCFA Advisor, Albert Lin (24 mins in total length).
Real estate investment crowdfunding is growing exponentially in international jurisdictions including the US. Learn about the potential of equity crowdfunding for residential, commercial and community re-development projects in Canada and how it works.
Learn more:
https://ncfacanada.org
http://www.katipult.com
http://www.openavenue.com
Still Not Active in Canada
Equity crowdfunding for real estate is thriving in the US, raising more than $135-million in debt and equity. It seems that it is only a matter of time for Canada to put regulations in place which allow this model of crowdfunding to be active, however, currently the Ontario Securities Commission is proposing to exclude the entire real estate industry from participating due to several concerns (see OSC proposed crowdfunding exemption rules and regs).
For now, given the proposed investor cap of $2,500 per deal in Ontario's proposed equity crowdfunding model, which is considered quite low given the high capital needed in real estate investing, a property costing $500K would need approx 200 crowd investors to fully fund the offering.
The Benefits of Investing in the Local Community
As Tim McKillican points out in our discussion (at minute 14:30), having this extra autonomy over one’s portfolio allows one to invest their money in places closer to home, thus keeping their investment capital local, and developing their surrounding community.
Differing from REITs, equity crowdfunding for real estate creates offers more control over the which properties one chooses to invest in.
An Extra Level of Security
Investors have direct title to the asset (in this case over the property), which, as we discussed in the talk, makes the investments made through these specialty crowdfunding portals more secure.
Do you agree?
Check out the chat we had with our expert panel, and please join the ongoing discussion. Do you think equity crowdfunding for real estate is a smart way to invest and grow communities? Or is it a flawed model which can be misused or exploited...
Watch Equity Crowdfunding for Real Estate Panel Discussion --> Now
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us or contact us at casano@ncfacanada.org.
