Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: NCFA In The News
The funding continuum enters stage left
IT Business Canada | Bret Conkin (@bretconkin) | March 25, 2014
The rules posted yesterday by Canadian securities regulators are still being digested, but upon first read, they appear very encouraging for Canadian startups, small business and even public issuers. The regulators have struck a balance by ensuring investor protection via caps, while giving portals and issuers modest oversight and the latitude they require to raise critical funds via portals like FundRazr.
While some portals have established themselves by model – as “equity” or “donations” or “rewards” – FundRazr believes that it is in the best interests of the entrepreneur to provide a broad range of solutions that can be accessed as needed stages during the growth cycle from a single expert platform provider. In our opinion, this “funding continuum” will then continue into later stage venture capital or institutional funding by existing players. This has been validated by platforms like Circle Up in the consumer packaged goods space.
As background, FundRazr is Canada’s most successful crowdfunding platform with $44M raised to date and one of the seven most visited in the world, according to crowdfunding.com. In December 2013, FundRazr announced our intent to offer a “continuum” of funding solutions for entrepreneurs beyond the donations and rewards currently offered.
Here are four key reasons why the funding continuum born in Canada is going to help drive entrepreneurial funding.
1. The ability to build start-ups, not a portal community
A myth exists that certain platforms – chiefly Kickstarter and Indiegogo – have funding communities that can be tapped into, simply by posting Rewards campaigns on those sites. The reality is that entrepreneurs need to bring their own community and then platforms can help amplify those communities to ensure successful campaigns.
The Funding Roadshow: 20 Pitches | 8 Funders | 10 Cities -> Register Today
The solution is to allow entrepreneurs to run the “whole” campaigns on their own sites and on the platform simultaneously. This drives the traffic to the startup webpage or Facebook page and builds the community for the startup, not just for the platform. That sets the stage for follow-on campaigns later.
For example, followers of a donation campaign at seed stage will be likely customers upon a pre-order or rewards campaign. Now curated as advocates, those same early followers will get the opportunity to invest – turning customers into shareholders. The community and relationship will be cultivated efficiently as the platform has made the administration and communications easy, fluid and all taking place on multiple sites that the entrepreneur desires.
2. Canadian market and technological expertise
The securities, web and payment regulations landscape differs widely by jurisdiction. Cross-border issues exist. The support ecosystem that is evolving – financially, legally, and through marketing – needs to understand the local landscape. We feel that this will mean optimal funding solutions born in Canada.
As Canadians, we often see U.S. technology providers struggle to navigate our laws, culture and other market requirements. However, Canada is more than the 51st state and Canadian platform providers like JOI Media and FundRazr will offer solutions more in-tune to local market needs. To date, foreign platforms offer fragmented (by model or market) solutions that will not prove as attractive to Canadian entrepreneurs for their funding needs.
As well, the JOBS Act Title III, as it’s currently constructed, will restrict foreign issuers (e.g. Canadian) from raising funds from non-accredited investors in the US. FundRazrCEO Daryl Hatton and I are ambassadors to the National Crowdfunding Association of Canada and we highly recommend that interested parties become members to stay current with the dynamic landscape.
3. Flexible and Affordable funding
The fact is that giving up equity for funding is very expensive if done too early and at too low a valuation. The funding continuum called Powered by FundRazr will allow entrepreneurs to tap the appropriate and most affordable option, depending on their stage of development. This puts the power back into the hands of the entrepreneur, not the venture capitalist or platform.
Giving up expensive equity at a point of more favorable valuation will be a positive outcome. Current options for Rewards campaigns range from flexible to inflexible (Kickstarter and Indiegogo restrict campaigns to 60 days). Kickstarter offers only All-or-Nothing, meaning that campaigners must hit their goal to keep any funds raised, while platforms like Indiegogo and RocketHub charge a five per cent penalty for campaigns that fall short of their goal. FundRazr will provide lower rates and more flexible options for Rewards campaigns and an affordable option for securities campaigns.
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Crowdfunding proposals support economy, says NCFA
Advisor.ca | Staff | March 25, 2014
Last week, six provincial regulators released proposals for crowdfunding prospectus exemptions that would help early-stage companies raise capital.
The proposals represent a significant leap forward and positive progress for economic growth, as well as for crowdfunding advocates such as the National Crowdfunding Association of Canada (NCFA Canada).
“[Last year] was [about] awareness and community building for us,” says Craig Asano, executive director of NCFA Canada. Now, “2014 [will] be busier than ever” since the crowdfunding industry is full of emerging entrepreneurs and investors.
Related: Two equity crowdfunding specific exemptions taking hold in Canada
The industry continues to grow, adds the association, with global crowdfunding markets increasing from US$1.5 billion in 2011 to US$5.1 billion in 2013, according to U.S.-based research.
Background
Proposed start-up exemptions (one has already been adopted in Saskatchewan last December) would allow start-ups and SMEs in more provinces to raise up to $300,000 per 12-month calendar year.
As well, investors could offer up to $1,500 per deal on crowdfunding portals that distribute offerings for up to 90 days online. The start-up exemption is based-on the Saskatchewan model, and provincial regulators in B.C., Manitoba, Quebec, New Brunswick and Nova Scotia are seeking public comment until June 18, 2014.
Ontario is offering a second version of the proposals, says NCFA Canada. It’s called the crowdfunding exemption and its creation has been a collaborative effort between Ontario, Manitoba, Quebec, New Brunswick and Nova Scotia, with the OSC leading the initiative by setting up a dedicated task force.
View: OSC proposes four new capital raising prospectus exemptions (public comments until June 18, 2014)
That force has conducted research, hosted numerous town halls and reached out to various community stakeholders to engage in consultation sessions. The new crowdfunding exemption has higher caps and limits than the Saskatchewan model: start-ups and SMEs could raise up to $1,500,000 per 12-month calendar year, with investors being able to invest up to $2,500 per deal and up to $10,000 per year.
Canadian “regulators should be commended for their thoughtful and consultative approach,” says Daryl Hatton, CEO and founder of FundRazr, Canada’s leading crowdfunding portal. “The proposed regulations have some great characteristics and will help propel Canadian early-stage companies from the farm team to the big leagues.”
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To find seed money, Canadian startups follow the crowd
The Globe and Mail | TAVIA GRANT | March 23, 2014
Canada is going crazy for crowd funding.
Entrepreneurs across the country are flocking to the fast-growing financing model to start businesses in everything from 3-D printers to craft beer.
Crowd-funding website Kickstarter has already tallied 1,400 projects from Canada since it began operating here last September, raising a total of $14-million so far.
View: Canada 3rd highest contributing country as Kickstarter passes $1 Billion
Canada’s Eric Migicovsky raised $10.3-million in 2012 to make Pebble smartwatches, the single most successful Kickstarter project to date.
Rival site Indiegogo, which operates in almost 190 countries, says Canada is its second-largest market after the United States. Across Canada, the number of crowd-funding portals has jumped to 77 from only 17 in 2012, according to the National Crowdfunding Association of Canada.
Crowd funding refers to raising capital to fund a startup or project from the public, usually through the Internet. These ventures might range from video games and mobile apps to documentaries and books.
Typically, investors don’t receive equity or expect repayment; rather they may get “rewards” such as a product, or just make donations without expecting anything in return.
“It’s a great way to validate the idea, see how it does in the market, gain feedback from audience, go into productio
Three main factors are driving the growth of crowd funding. First, far more Canadians are connected online, giving budding entrepreneurs a global market or audience. Next, a tepid Canadian job market is spurring more self-employment, an area that comprises 15 per cent of the workforce. And dwindling venture and seed capital for startups makes crowd funding a logical alternative.
Related: Crowdfunding is essential for SME innovation and job creation
“It’s been heartening to see Canadians embrace this new method of bringing something to life,” said Justin Kazmark, spokesman for Brooklyn-based Kickstarter. “There’s an incredible number of innovative, colourful ideas coming from Canada.”
Canadian projects range from quirky to creative. Kickstarter projects include role-playing video games, waterproof toques, an inexpensive 3-D printer and high-end playing cards.
Kickstarter not only provided seed money for Peachy Printer, a $100 3D printer in development, “but also in marketing – to get our name and product seen globally,” said David Boe, the Saskatoon-based co-founder of Rinnovated Design. “We are currently working with teams and people from universities, colleges and other businesses from around the world. This has definitely been one of the most important aspects of running our Kickstarter campaign.”
Innovation is not traditionally Canada’s strong suit. The Conference Board of Canada gives the country a “D” for innovation with particularly low marks for venture capital.
Business formation has been soft too. In a fall speech, Bank of Canada Governor Stephen Poloz noted there was almost no net creation of companies between 2008 and 2012.
Crowd funding is “the great equalizer,” where anyone with a good idea can access global backers and a global market, said Ayah Norris, Canadian spokesperson for Indiegogo. She noted that nearly half of the site’s entrepreneurs are women, a higher-than-average proportion, and that this method gives entrepreneurs in more remote communities, such as in the North, a better shot at raising funds.
You may be interested in: Two equity crowdfunding specific exemptions taking hold in Canada
The benefits go beyond raising the initial capital, she said. n with testing, and do marketing,” she explained.
Indiegogo has been hosting Canadian campaigns since 2009, and says momentum has accelerated in recent years, with money raised in Canada nearly tripling between 2012 and last year.
Canadian campaigns on its site have included bamboo sunglasses and high-tech underwear. In Vancouver, a “friendly little sausage-and-beer parlour” opened last summer after it raised $15,000 on Indigogo. In Toronto, a company making a “brain-sensing” headband raised $267,000 in 2012 and went on to secure financing from other venture capital funds.
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BCSC Proposes New Startup Crowd Funding Rules
BC Business | Jacob Parry | Mar 20, 2014
Online capital raising would be an option for businesses.
Companies would be able to raise capital online from widened pool of non-accredited investors, according to proposed rules
The B.C. Securities Commission put forward a proposal that would allow equity-based crowd funding, as Canada’s security regulators propose new exemptions that would change how much and from whom early-stage companies raise capital.
B.C.’s proposal is modelled on changes made by Saskatchewan’s securities regulator last December that allow the general public to buy shares and ownership in small companies. Under the proposed exemption, early-stage private companies could raise up to $150,000 from non-accredited investors without issuing a prospectus.
B.C. joined other members of the Canadian Securities Administrators in publishing the proposed start-up crowd-funding exemption for comment. CSA is an umbrella organization comprising the provincial securities regulators. Regulators in B.C. and Alberta however did not join the other provinces in a second, more extensive proposed exemption.
Related: [Breaking] Canadian Securities Regulators propose new crowdfunding exemptions
Under the proposed rules, startups in B.C. would be allowed to distribute securities without a prospectus. A company could raise up to $150,000 per offering, with up to two offerings a year. Each investor would be allowed to up to $1,500 per offering via online portals similar to Kickstarter or Indiegogo.
"We feel that this crowd funding model could address a gap in the financing needs of startup and early-stage companies in B.C.," said Brenda Leong, chair of the BCSC, in a statement. "We think it could fit well within the existing exempt market regime available to small businesses."
Proponents of equity crowd funding, many of whom are still sifting through the changes, see it as a way to raise capital, selling equity in a company to unaccredited investors without engaging in the costly process of going public.
“This is going to move the needle for capitalization,” says Craig Asano, executive director of the Toronto-based National Crowdfunding Association of Canada, which has been pushing for these changes for the last few years. The changes "will fill the early-stage funding gap for companies,” he says.
View: Join NCFA Canada and Help Build a Vibrant and Sustainable Crowdfunding Industry Across Canada
“I think its’ excellent, particularly for the tech industry,” says Alixe Cormick, a Vancouver securities lawyer at Venture Law Corp. Despite B.C.’s fundraising cap of $150,000, which is low compared to public fundraising, Cormick says that the changes will allow a number of people to get to the early-stage off the ground. With the changes, companies will not need audited financial statements and there will be no net worth or annual income restrictions on who can invest in a private company, according to Cormick.
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Canada regulators propose rules for crowdfunding of startups
Reuters Canada | By Alastair Sharp | March 20, 2014
TORONTO (Reuters) - The power of the crowd may soon be harnessed to help fund business startups in Canada, with several provincial securities regulators publishing proposed rules on Thursday that would allow large numbers of people to invest small amounts in promising projects.
The rule changes could offer a lifeline to the country's technology community, which often turns to U.S. investors and companies to fund early-stage growth.
Crowdfunding has proven a popular way for artists and others to raise money, but in Canada it has not involved equity stakes in projects.
The Ontario Securities Commission, the country's biggest capital markets watchdog, said its new rules would allow registered online portals to collect up to C$2,500 ($2,200) per investment from small-scale investors.
Such investors would be allowed to invest up to a total of C$10,000 a year, while the companies would be limited to raising C$1.5 million per year from crowdfunding.
Related: [Breaking News] OSC Proposes 4 new Capital Raising Prospectus Exemptions
"Today we have proposed new tools, which will transform Ontario's exempt market by providing greater access to capital for businesses and expanding investment opportunities for investors," OSC Chairman Howard Wetston said in a statement.
And it is not just tech companies that stand to benefit. Real estate, among others, stands ready to accept grass-roots funding.
"It's a new opportunity to raise capital and get others that traditionally aren't involved into the real estate game," said Tim McKillican, the president of Open Avenue, a private real estate developer and manager that owns almost 1,000 apartments, mostly in Ontario's Kitchener-Waterloo region.
Without the new rules Open Avenue must win funding from rich investors judged sophisticated enough to invest wisely or otherwise able to sustain a loss of their capital.
"It's not like your net worth determines your sophistication in investing," McKillican said.
Regulators in Alberta, Quebec, Saskatchewan and New Brunswick published a joint proposal similar to the OSC document.The releases start a 90-day consultation period.
British Columbia, another of Canada's biggest capital market jurisdictions, said it was seeking comment on whether it should adopt rules that less-populated Saskatchewan introduced in December.
Related: Canadian Securities Regulators Propose New Crowdfunding Exemptions
Under those rules, single investments would be limited to C$1,500 and businesses would be able to raise only two C$150,000 rounds a year.
Bill Rice, who heads both the Alberta Securities Commission and an umbrella group of Canadian regulators, said serious effort has been put into aligning the proposals.
"Differences in regulatory approach reflect differences in local experience and feedback," he said. "Our intent is to review the submitted comments and achieve as much harmonization as possible before the final rules come into force."
Backers of such grass-roots investments have been waiting for months for these proposals, which if adopted would give the nascent model an injection of credibility.
"This is just the tip of the iceberg. These markets have tremendous amounts of potential and this is step one," said Craig Asano, thefounder of the National Crowdfunding Association of Canada, who hopes a secondary market will emerge.
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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 | Prezi or contact us at casano@ncfacanada.org.
4 thoughts on the future of crowdfunding
IT Business | Candice So | February 25, 2014
Crowdfunding has come a long way since the first crowdfunding projects surfaced a few years ago, with the first Kickstarter project coming online in 2009.
The concept of getting the public to fund an idea or product, has been around for a few years now. But there’s still a lot of uncertainty about its place as a source of funding for startups and early-stage companies.
The National Crowdfunding Association of Canada, which counts more than 700 organizations across the country as its members, hosted a webcast on Feb. 21, discussing the state of crowdfunding in Canada.
It explored how crowdfunding has changed from a fringe way of fundraising to a mainstream, accepted way to prove an idea or project has support and traction. Here’s a quick roundup of the highlights of the webcast.
1. More than ever, crowdfunding will continue being about the co-creation of value.
While it’s easy to see crowdfunding as a way of simply asking people for money, it’s a lot more than that, said Christopher Charlesworth, co-founder of HiveWire Inc. and a speaker on the panel for the webcast. Beyond just an avenue for funding, crowdfunding is about allowing other people to get involved with an original idea.
“We’re heading in a direction where there’s almost an escalator form, where there is an opportunity for the crowd to support ideas and innovation, even at the very nascent stage, right from where the ideas are formed,” he said.
“And the crowd’s able to say, this is a great idea, to allow other people to jump on board and support those ideas, to allowing deep capital, pre-sales, to then having the larger financial services providers to be able to step in.”
Crowdfunding also allows startups and individuals to test their assumptions about the marketplace, said Lyn Blanchard of Creekstone Consulting Inc. One of the best ways to see if a product will catch on is to see if people are interested in funding it, she added.
Eventually, what may change crowdfunding is the availability of data, Charlesworth said. As data analytics become more entrenched in the tech industry, it’s inevitable they’ll also shape how people do crowdfunding.
For example, many people believe women tend to be more successful at crowdfunding. However, once data analytics come into play, people will be able to make more sense of market signals and verify beliefs like those, he added.
2. Right now, crowdfunding involves directing backers to a crowdfunding site. But we’re going to see more and more crowdfunding-as-a-service solutions.
Most crowdfunding involves setting up a campaign on a site, with the most well-known platforms being Kickstarter and Indiegogo. While featured campaigns often get a lot of page views, the downside to this is that campaigners have to direct backers away from their own sites, lowering their traffic, said Daryl Hatton, CEO of FundRazr, one of Canada’s biggest crowdfunding platforms.
View: How FundRazr is turning websites into crowdfunding platforms
The solution to all this? Crowdfunding as a service, Hatton said, adding FundRazr introduced a software plugin in December 2013, allowing people to embed crowdfunding campaigns directly onto their own sites. Indiegogo also did something similar last month with a new feature called Outpost, he noted.
3. While some may have thought crowdfunding would disrupt the traditional way of financing companies, that hasn’t happened yet.
Instead of seeing crowdfunding as a way to compete directly with venture capital and the usual ways of financing an early-stage company, the two are complementary, Blanchard said.
“The question is, is crowdfunding disruptive to a finance ecosystem? The quick answer is, it’s not disruptive,” she said. “It’s just another arrow in an entrepreneur’s quiver.”
As she noted before, if a project reaches its funding goals, that can be a good indication of whether a marketplace will want a particular product or service. But smashing a crowdfunding goal can also show investors that a startup or early-stage company has potential, she added.
“It’s about the art of building a company that is fundable,” Blanchard said.
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Top 10 Crowdsourcing Experts Series – Canada
Crowd Sourcing Week | Sean Moffitt | Feb 10, 2014
Note from editor: The Crowdsourcing Week Team, along with our advisors are thrilled to present a new series on our picks for Crowdsourcing Week’s Global List of Experts. Over the next few weeks, we will share our lists of global innovators shaping the conversation on the crowd economy. Sean Moffitt of Wikibrands is curating our first list on Canada’ s thought leaders. Over to Sean.
A lot of great choices for Canada to kick off our Global Crowdsourcing List of Experts Series. Given my own location, we thought we should start north in our 50-country co llection of geo-specific collection of crowd experts, influencers and practitioners.
Here is our best crack at our Canadian top 10 (in no particular ranking), but we could have easily added more (please add your own in the comments area). We also hope you can add your Canuck insight to our first annual Global Crowdsourcing Survey.
#1 Don Tapscott, The Thought Leader
Claim to Fame: One of the world’s leading authorities on innovation, media, open collaboration, the economic and social impact of technology and current lead of Global Solution Networks
Website: The Tapscott Group
Twitter: @dtapscott
Latest Post of Substance: Ten Types of Global Solutions Networks
Latest Tweet of Substance: Smart societies: from citizens as sensors to collective action http://ow.ly/tlu2G
#2 Eric Migicovsky, The Crowd Campaigner
CEO of Pebble Technology and Systems Engineer
Claim to Fame: Founder of the most successful campaign on Kickstarter to-date Pebble Watch, a successful Y Combinator venture – 85,000 funders and 300,000+ customers
Website: Get Pebble
Twitter: @ericmigi
Latest Post of Substance: It’s Time to Explore the Pebble App Store
Latest Tweet of Substance: Good luck to everyone adding finishing touches @thehackTECH! pic.twitter.com/BX2PaU6iOA
#3 Shelley Kuipers, The Brand Champion
Founder and CEO of Chaordix
Claim to Fame: Leads Chaordix – the global player in crowdsourced brand and product innovation that help the world’s leading companies and organizations gain sustained community engagement and predictive intelligence with global clientele including P&G, IBM, FutureBrand, KPMG, American Airlines, Virgin and Reckitt Benckiser
Website: Chaordix.com
Twitter: @shelleykuipers
Latest Post of Substance: On Crowdsourcing innovation
Latest Tweet of Substance: Products are usually managed by one person, whereas an experience must be curated by several different owners…
#4 Darryl Hatton, The Fundraiser
CEO of FundRazr
Claim to Fame: Leads FundRazr - Canadian crowdfunding site and Facebook app first released in 2009 allowing enterprises and users to raise money for a variety of causes – $42 million since inception making it one of the top 6 crowdfunding platforms in the world
Website: FundRazr.com
Twitter: @DarrylHatton
Latest Post of Substance: Top Personal Campaigns – First 24 Hours Predictive of Success?
Latest Tweet of Substance: 5 Ways Nonprofits Can Use Perks for Crowdfunding
#5 Craig Asano, The Crowd Ringleader
Founder and Executive Director of the National Crowdfunding Association of Canada
Claim to Fame: Spearheaded multiple programs and initiatives including Canada’s Crowdfunding Directory, a National Ambassadors outreach program, and NCFA Canada’s advocacy efforts to advance equity-based Crowdfunding regulations in Canada.
Twitter: @NCFACanada
Latest Post of Substance: Crowdfunding is Essential for SME job creation and innovation
Latest Tweet of Substance: Why Canada is where smart VC money is going in 2014 http://ow.ly/trYs6
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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 | Prezi or contact us at casano@ncfacanada.org.
