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
Small businesses eagerly await crowdfunding regulation
Star Business Club | by Vikram Barhat | Feb 3, 2014
For cash-strapped small businesses, a new funding option in the works could mean a substantial and dramatic improvement for their access to capital.
Crowdfunding, more typically a platform for raising donations, is now letting business owners offer investors a stake in their companies in exchange for capital.
The contentious solution is being hotly debated between small business owners, industry advocates, and securities regulators.
Equity crowdfunding is a boon for new startups that don’t have the size or structure to raise money by going public with an initial public offering, advocates argue. Critics warn of the risks: Investors may end up with illiquid assets, negative returns or unsuitable investments for their risk profile.
Related: Crowdfunding could play key role in startup financing
The Ontario Securities Commission is getting ready to expand equity crowdfunding in the province. Currently, only accredited investors can buy shares of new companies, in what’s called an exemption under the OSC regulations. In a move first hinted at in August, the Commission said in early December that it plans to enact a new rule to allow more investors interested in startups to get in on the ground floor via a crowdfunding portal. The new exemption will be subject to a 90-day comment period and include a registration framework for crowdfunding websites. Once enshrined, it will give more investors first crack at stakes in startups.
That could be a dramatic shift. Under the current exemption, only 3 per cent of the Canadian population qualifies as an accredited investor — high-net worth individuals deemed to be sufficiently knowledgeable of investment matters and don’t need the protection of securities legislation.
Industry stakeholders agree that it all comes down to the creation of a regulatory framework that makes equity crowdfunding possible for entrepreneurs, while minimizing the attendant risks for investors.
View: Overregulation in crowdfunding will hurt Canadian startups and small businesses
Expanding the scope of crowdfunding will help businesses get off the ground by allowing access to a new source of capital to fill a critical funding gap in an efficient, transparent and cost effective way, says Myles Harding, an advisor of the National Crowdfunding Association of Canada (NCFA Canada), a cross-Canada crowdfunding advocacy group based in Toronto.
“Small business owners seeking early stage seed capital or growth capital recognize that there is a limited availability of investment capital for those purposes,” he says.
Some of the existing alternatives to crowdfunding include debt financing, provided by banks and asset-based lenders; angel investors, who are affluent individuals or groups who provide financial backing for startups in exchange for part-ownership; and venture capital, a form of private equity that usually comes when a business has proven its potential for exponential growth. However, these options may not be available to a fledgling business unable to offer compelling proof of growth penitential or assets that lenders can use as collateral.
“As a result, they are generally in favour of crowdfunding as a potential source of capital,” Harding says.
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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.
Crowdfunding could play key role in startup financing, expert says
Guelph Mercury | By Terry Pender | February 6, 2014
KITCHENER — A new way of crowdfunding could soon come to Ontario that has huge potential for growing businesses and creating jobs, says a lawyer focused on startups and the internet.
John Wires, an Advisor at the National Crowdfunding Association of Canada, told a technology and business audience at the Communitech Hub on Wednesday that proposed new rules for equity crowdfunding are expected from the Ontario Securities Commission sometime during the first quarter of this year.
Equity crowdfunding would allow people of all backgrounds to make investments in medium-sized businesses that are not publicly traded. Currently, securities laws only allow accredited investors, or those with net assets of at least $1 million and annual incomes of $200,000 a year, to make such investments.
Equity crowdfunding would enable a company to raise capital without preparing a prospectus at a cost of at least $100,000 and issuing shares, Wires said.
"If you are an entrepreneur and you want to raise money on the public market, you are going to have a tough time," he said."There is a serious access-to-capital problem for entrepreneurs."
Equity crowdfunding should make raising money a lot easier, but it requires fundamental changes to laws and regulations.
"Laws that require you to have a prospectus, which is a grandiose disclosure document that really, at the end of the day, nobody ever reads, ironically," Wires said.
View: Crowdfunding Presentation to Employment and Social Development Canada (Dec 2013)
Crowdfunding presents challenges, too, he said. Some businesses, including many startups, would have a hard time quickly giving an investor back their money if they wanted out. It can also be a challenge for a small company to manage a large number of investors or shareholders.
In an interview after his presentation, Wires said regulators must put in place strict rules to guard against fraud, or the potential benefits of equity crowdfunding will be reduced.
"If fraud takes over as the headline, I think the potential that equity crowdfunding holds will likely be significantly diminished," he said.
Check out: Equity Crowdfunding Lessons from the Past 8 Years
There must be laws and regulations to protect investors with incomes — people who are not now considered sophisticated investors, he said.
"Two important points — there needs to be an effective dispute resolution mechanism to deal with this," Wires said. "Second, there needs to be, in my opinion, a better enforcement branch or enforcement policy in place to deal with the bad apples."
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Overregulation in crowdfunding will hurt Canadian startups, small biz
Canadian Manufacturing | ©The Canadian Press | January 30, 2014
TORONTO – Canadian startups are in a prime position to cash in on the growing popularity of crowdfunding, but regulators need to ensure that incoming rules do not hinder that potential, TD Economics warns.
According to the 13-page report, the global crowdfunding market is estimated to be worth $3.25 billion, with the majority of the funds coming from North America and Europe.
But as other jurisdictions, mainly the US, move to set rules on how crowdfunding can operate, Canada has only taken tentative steps towards a regulatory framework. In doing so, it runs the risk of losing investments for startups and small businesses.
“Due diligence and getting it right is likely the prudent course of action _ there is an advantage to letting others go first and refine the best practices. However, Canadian regulators cannot drag their feet too long,” wrote senior economist Sonya Gulati. “If they do, there is the potential for entrepreneurs and enterprise owners to shift to jurisdictions which embrace crowdfunding. This leads to the potential loss of economic opportunities here in Canada. It also reduces the scope for startups and entrepreneurs.”
Related: Crowdfunding is essential for SME job creation and innovation
For instance, the report noted that the US has already loosened the rules over equity funding, as have other countries such as Australia, the UK, France, Belgium, Germany and the Netherlands. Currently, in Canada, crowdfunding is used only to solicit one-time donations whereas elsewhwere ongoing equity funding is possible.
Although crowdfunding accounts for a small fraction of overall business funding, Canada needs to act quickly on rules to govern the growing industry, TD says.
Crowdfunding has gained momentum in recent years with the popularity of websites like Kickstarter, which arrived in Canada in September 2013.
Since its founding in 2009, more than 5.5 million people have made $960 million in donations on the Kickstarter site to 55,000 projects ranging from a human-powered helicopter to the upcoming Veronica Mars movie by the creators of the now defunct cult TV hit.
According to the National Crowdfunding Association of Canada (NCFA), there were 45 crowdfunding platforms in Canada as of Jan. 2013, said the report.
Gulati noted that rules are needed to address a variety of concerns related to the industry, such as the potential for fraud, patent infringement and copyright concerns. But in doing so, regulators need to ensure they do not overregulate the crowdfunding industry.
Download the TD Economics’ crowdfunding report --> here
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Indiegogo allows crowdfunders to embed campaigns on their own sites
ItBusiness.ca | Candice So | January 8, 2014
Crowdfunding platform Indiegogo Inc. has launched a new feature called Outpost, giving campaigners the ability to embed their campaign pages on their own web pages, instead of just having them hosted on Indiegogo’s site.
The idea is to let well-known brands customize their campaigns to their own liking and to drive traffic to their own sites. There are no setup fees, and Outpost uses the same HTML and JavaScript code that appears with sites using plugins from Google Maps, Facebook commenting, and Google Analytics.
View: Canadian Crowdfunding Presentation (PDF)
However, campaigners still get a spot on Indiegogo’s site, with the platform calling their pages “mirrored campaigns” that give them access to nine million unique monthly visitors and the chance to be featured in its email newsletters and on its social media channels. Using the Indiegogo site also helps campaigners keep track of what backers are doing, based on the site’s data analytics tools.
While Indiegogo is saying it is the first crowdfunding platform to offer an embedding capability, British Columbia-based crowdfunding platform FundRazr says it actually built a widget to allow people to directly contribute to campaigns on a website about two years ago. And in December, FundRazr launched a software-as-a-service plugin for embedding campaigns onto organizations’ sites.
In fact, WikiLeaks staff have been raising legal defence funds for founder Julian Assange through FundRazr, as it offers both a way to donate through Facebook as well as on the FundRazr site. Former NSA contractor Edward Snowden also has a campaign on Fundrazr, aiming to raise money for his legal costs. At the time of this writing, Assange’s FundRazr campaign has raised about $27,250, while Snowden’s has raised about $97,000.
“We’ve been doing this in a variety of forms for a long time,” says Daryl Hatton, FundRazr’s founder and CEO. “The basic idea is that we think crowdfunding is going away from being a destination portal and into a tool where you use it wherever you need it.”
He compares embedding crowdfunding campaigns on company sites to what PayPal Inc. did, when it allowed people to pay for things directly on an e-commerce site without having to be redirected elsewhere.
Related: FundRazr’s Crowdfunding as a Service Platform Launched at Grow 2013
However, he says it doesn’t really matter Indiegogo is saying it is the first crowdfunding platform to offer embedded campaigns – FundRazr isn’t going to dispute it.
“There’s a lot of innovation that’s happening outside of the main guys in here, like Kickstarter and Indiegogo. We have a curve of innovation like this, where you can run it on your site, where you can run as many campaigns as you want to on your site,” he says, adding one FundRazr’s customers, Healthline Networks Inc., recently added FundRazr’s software plugin to crowdfund medical expenses.
“It’s a couple of lines of embedded script code, is all it took for them to become a crowdfunding portal,” Hatton says.
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New Voice in the Crowd – Craig Asano Champions Education to Bring New Funding Model to Canada
National Post | David Pett | December 3, 2013
Craig Asano Champions Education to Bring New Funding Model to Canada
When Craig Asano’s phone chimes, he looks at his screen, but doesn’t answer. “lt’s usually Ottawa asking for some information,” he says over coffee at a downtown Toronto restaurant. We've gone there a number of times and presented to senior policy makers who are very interested in how crowdfimding works and how they can get involved."
The admission isn't Surprising. Since launching the National Crowdfunding Association of Canada in October 2012, Asano has been in high demand among entrepreneurs, investors and regulators as an educator and advocate For the latest global craze in raising capital for startups and small businesses.
But despite his growing influence, he wants to accomplish a great deal more, including the establishment of a comprehensive, fully integrated national crowdfunding industry that levels the playing field with other countries and helps solve Canada‘s chronic funding crisis. “The rest of the world is moving very quickly and we’ve got to get on board here,” he says. “The way to get it on the agenda is to band together."
Asano’s brainstorm for a National Crowdfunding Association came within weeks of returning to the country from a 15 -year stint overseas as an entrepreneur. After reconnecting with old colleagues, including Brian Koscak, chairman of the Exempt Market Dealers Association of Canada, he noticed Canada’s venture-capital market was leaving entrepreneurs with great ideas desperately short on funding for their innovations.
Related: Crowdfunding is essential for SME innovation and job creation
The solution: Crowdfunding, which pools small amounts of capital from a large number of people usually through online portals. It had at that time emerged as a legitimate solution worth more than US$2 billion globally, but it was sorely underutilized in Canada and still not well understood.
Since then, crowdfunding has gained considerable momentum and the NCFA has rapidly grown to now boast more than 550 members. The association has attracted people from three main categories: industry stakeholders, such as portal operators, consultants and service providers like accountants and lawyers; entrepreneurs and startups looking for funding; and investors or backers ready to put some of their capital to work. Asano says the NCFA‘s focus is on education and advocacy, but it also provides an important networking opportunity.
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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 eBrochure | Prezi or contact us at casano@ncfacanada.org.
The rise of angels and crowdsourcing
Backbone Magazine | By Ian Harvey |November 28, 2013
For start-ups, it’s always about the money. With the exception of serially successful entrepreneurs, early-stage companies only get so far bootstrapping or begging funds from family and friends. Enter two of the fastest-growing sectors of start-up funding in Canada: crowdsourcing and angel investors. With some well-publicized success stories, government policy shifts and funding assistance from players like the National Research Council, the Business Development Bank of Canada and angels, the money is flowing.
“The trend line is improving,” said Mike Edwards, a Vancouver-based angel. “There are more entrepreneurs trying, and more people looking for ways to develop more disruptive technologies, creating more volume and more successes.”Consider Hootsuite. The four-year-old Vancouver-based social media company raised $165 million in ‘B’ round financing last summer, after getting $20 million from OMERS Ventures a little over a year ago. These types of stories will boost angel investments, Edwards said, because it all “started with angel capital.”
Strength in numbers
More recently, crowdsourcing has become a popular platform to raise money, whether you’re Spike Lee making a movie or a Web site looking to expose a video of an alleged crack-smoking mayor. But there are risks, said Craig Asano, executive director of the fledgling National Crowdfunding Association of Canada (NCFA), which wants to facilitate the flow of cash and create a series of standards and protocols to protect investors.
“Looking at Industry Canada numbers for SMEs, VCs funded only about one per cent,” he said. “We think crowdsourcing could fund 17 per cent of those SMEs, and that’s $4.6 billion in funding.”
There are already more than 60 crowdfunding portals, but because of securities regulations, they’re restricted to a donate-reward model in which people pony up simply because it’s cool to invest in something they believe in. Instead, some portals want to issue shares and equity, a development Asano said is the next logical step.
That, in turn, is attracting attention from bodies like the Ontario Securities Commission, which fears fraudsters will rip off innocent investors. As B.C., Saskatchewan and Ontario circulate proposal papers, the bigger risk, Asano said, it that this could smother the opportunity, paperwork, compliance issues and capping investor and funding amounts at unreasonably low levels.
Angels’ landing
Angel financing, meanwhile, is getting a massive boost from the increased participation of the Business Development Bank of Canada (BDC).
“About five years ago we realized the system was broken,” said interim vice-president of strategic investments Dominique Bélanger, referencing the 2008 global fiscal crisis that dried up funding.
It was a major shift, Bélanger said: “The idea is to be a catalyst, not replace funding sources. We made the mistake in the 1990s of copying the successful model in Silicon Valley, but it was just a dumb cut and paste without thinking about how it can work here.”
Related: Join the National Crowdfunding Association of Canada today
With $1 billion to invest, BDC is emerging as the go-to partner, galvanizing angel groups and working with accelerators like GrowLab, Extreme and Communitech. “Our mandate is to help high-growth-potential people build their business better and faster,” he said.
For example, a 90-day program at Communitech exposes entrepreneurs to hundreds of other successful entrepreneurs who mentor them, and the best of them go forward to a pitch day in front of angels and VCs. Those selected get $150,000 in the form of a convertible note from BDC, which sets terms and conditions for investments from angels, and some go on to raise more based on that initial kick start.
“We had one start-up that raised $600,000 from angels on top of the $150,000,” he said.
In the case of the Real Ventures Fund, BDC put up $3 million, which then prompted angel groups to invest another $15 million. Today, Real Ventures has 44 companies in its portfolio with an average $185,000 investment in each.
Against all this BDC interest, however, the glue holding the ecosystem together is the angels, who are there investing long before the venture capital funds or the banks.
Angel investors aren’t just people with money to burn, said Yuri Navarro, national director of the National Angel Capital Organization (NACO). Under federal tax regulations, qualified angel investors must have $5 million in assets and $1 million in liquid assets with a $200,000 yearly income. While 500,000 Canadians meet that standard, not everyone is an angel investor; Navarro said there are 200 to 500 serious angels in Canada, but no one knows for sure.
NACO has a membership list of more than 2,000, including angel groups and their members. “This number is what we consider the ‘visible’ Canadian angel community,” Navarro said. “It’s only a fraction of the total community.”
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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 eBrochure | Prezi or contact us at casano@ncfacanada.org.
NCFA Advisor, Murray McKercher on Profit Business Cast – Crowdfunding: Viable Resource or Novelty?
ProfitGuide.com | Andrew Brown & Robert Gold | October 31, 2013
Produced in partnership with Bennett Gold LLP Chartered Accountants and Write On The Money
The National Crowdfunding Association of Canada (NCFA) is only a year old—but it's been quite a year for crowdfunding in Canada. Murray McKercher, a board advisor for the young association, says the fundraising model has blossomed in Canada over the last 12 months, with major sites Indiegogo and Kickstarter targeting Canadian entrepreneurs.
While many have pointed to the spinoff benefits of a crowdfunding campaign—free R&D, for one thing— McKercher says the model really isn't about crowdsourcing. Put simply: it's about getting some initial capital into an entrepreneurial startup. "I do a lot of advising for startups through [various] accelerators, and getting that first $50,000 is really difficult," says McKercher. "Crowdfunding is a vehicle to allow those young entrepreneurs to get some capital into their company."
Related: Join NCFA Canada Today!
Right now, the model is limited to perks and rewards for investors—it's not possible for Canadian investors to buy common stock or shares or make an actual equity investment in a crowdfunded initiative. But McKercher says the model has had great success in the UK and elsewhere, and believes it's gaining momentum in Canada. The NCAC is working with bodies like the Ontario Securities Commission to create a an equity crowdfunding model that protects both the entrepreneur and the investor. If equity crowdfunding becomes a reality, it would bring the model to the next level, putting it on par with other viable options such as the Toronto Stock Exchange.
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NCFA Board Advisor, Murray McKercher, brings over 30 years of experience and expertise in the field of information and communications technologies with a focus on the mobile internet. He is an Advisor at the Mobile Institute, which educates, enables and empowers organizations to capture their share of the global marketplace. He is an active supporter of innovative start-ups and connects entrepreneurs with the resources and networks required to progress their ventures. View profile
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 eBrochure | Prezi or contact us at casano@ncfacanada.org.
