Category Archives: Online Funding Campaigns

How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets

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Crowdfund Capital Advisors | Sherwood Neiss | March 20, 2020

RegCF and Covid 19 - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets

The Coronavirus is taking the financial markets by storm. It began its attack on the public markets around February 12th. Since then, the markets have dropped 30% off their highs and have made wide swings from one day to the next. It has been one of the most volatile periods in history. While we have yet to see how everything will play out, it is encouraging to see that this volatility has seemingly not had the same impact on private funding online. The data shows that people are still investing in their local businesses via online platforms. And their numbers are growing year over year. This will play an important role as we emerge out of this pandemic. We wanted to understand what is happening, so we dug into the data, reached out to a few platforms, and this is what we learned.

See:  US Reg CF Funding Portals: 50 in Total with Several Exits and Several Additions. Is Reg CF Ready to Scale?

Since February 12th, over $11.6 million has been invested into over 320 active companies, who are raising money on 13 online investment platforms. Over 21,000 investors have made individual investments into these companies. Comparing this to the same period last year, $9.8 million was invested into 227 active companies on 17 platforms by over 11,000 investors. There were 41% more active companies during the same period last year. The amount invested was up 16.3%, and the number of investors engaged was up 90%. All of these select private market indicators were up despite the public markets being in a free fall.

The image below shows period over period activity from February 12th to March 18th. What we see is that, despite the volatility in the public markets, this segment of the private capital markets appears to be withstanding the negative impacts … for now.

There have been several breakout companies during this period of public volatility. The list below shows the top 10, who they are, where they are based, where they are raising funds, and how much they’ve raised during this period.

Company City Listing URL Amount Raised 2/12/20 to 3/18/20
Mightly Quinn’s Passaic https://www.seedinvest.com/mightyquinns/series.b  $1,075,619
Lost Spirits Vernon https://wefunder.com/lost.spirits  $1,070,000
Black Sands Entertainment Brooklyn https://wefunder.com/black.sands.entertainment  $480,000
Ample Foods San Francisco https://republic.co/ample-foods  $295,836
McSquares Denver https://wefunder.com/mcSquares_The_Art_Of_Whiteboarding  $282,207
Neurohacker Carlsbad https://wefunder.com/neurohacker  $277,529
Called Higher Studios Franklin https://www.startengine.com/called-higher-studios  $274,730
GenesisAI Allston https://wefunder.com/genesis.ai  $263,725
Copperworks Distilling Seattle https://wefunder.com/copperworks.distilling  $259,637
Fisher Wallace New York https://www.startengine.com/fisherwallace  $249,693

We asked some of the platforms for their thoughts on why the private capital markets might be operating differently from the public ones. Ryan Feit, CEO of SeedInvest, shared an interesting perspective. As he put it:

“Sentiment is good. Venture will freeze up and entrepreneurs will need to utilize alternative sources of capital more than ever. On the investor front, the public markets will undoubtedly take a toll but given that the private markets have a low correlation to public and with interest rates at zero, hopefully people will continue to shift capital away from traditional assets.”

Jonny Price, Director of Fundraising at Wefunder felt

“It is too early to tell. While he could certainly see how this crisis would lower investment volume March 2020 has been is our best month ever already.” He also agreed with Pettid and Feit above by stating, “You can make a case that when the stock market is crashing, investors will seek alternative investment opportunities. And when conventional sources of capital dry up (e.g. VC), more founders might turn to their fans and customers for capital.” His last thought was most poignant, “High level — if there was ever a historical moment for a democratic and people-powered financial system, this would seem to be it.”

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NCFA Jan 2018 resize - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Raising Capital in a Pandemic World

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Medium | Victoria Bennett | March 18, 2020

fundraising in a pandemic - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets

This week has seen considerable changes in the world, from markets falling, oil prices falling, schools closed, borders closed. We’re moving into a new world order, and this isn’t for a week or two. How can your business stay healthy and grow?

Your company needs to prepare for this new world order. Firstly, look at spending and consider how you can reduce your burn rate? Look at your revenues. What will this ever-changing world do to your revenues? If some taps are turned off, how can you reposition your company to access new revenue streams? Government stimulus funding may help you to access the new revenue streams or pivot.

It’s not all doom and gloom. The 2008–2009 recession founded Uber, AirBnB and Slack, disruptive businesses that took the opportunities in the market. Other companies grew through acquisition and benefited from cheaper assets.

How can you raise the capital to grow and grab the opportunities that the changes with coronavirus bring?

Most outside money, such as Angel Investors or VCs, requires kissing many frogs. You have to meet a large number of people, typically face to face, to build understanding, trust and secure funding.

Last week our company was due to host three investor events. The first one on Tuesday, had over fifty people in Vancouver, the second on Wednesday twenty in Calgary. Then the third back in Vancouver had to be cancelled as the venue went on COVID-19 lockdown. With Social Distancing measures, traditional fundraising needs to be turned on its head.

See:  Funding in the Time of Coronavirus

Crowdfunding may be the solution to raise capital from a large number of investors across the whole country without meeting them face to face. The whole process takes place online, from reviewing the offering documents, signing and paying. It can all take place without any face to face interaction. That provides social distance for the investor, the company’s employees and lawyers.

Crowdfunding works best where you can tell a story because people like to back what they believe in, and that is certainly the case for retail investors. For larger investors, they are often looking for deal flow. A crowdfunding platform can provide both. The video gives you a chance to see the team, and to understand their why? The “why” is vital because that motivates companies through the bad times as well as the good.

It is important to tell your story and make it relevant to the current reality, but you need to be authentic too. Next week we are launching an equity crowdfunding campaign for a pain-free needle. The device is pre-dosed and has an enclosed sharp; therefore, it doesn’t require sharps disposal. In the not too distant future, there will be a need to vaccinate a large global population quickly, without fear of pain, or mis-dosing or sharps disposal in developing countries, and at a similar price to a syringe and vial of the drug. PKA SoftTouch, who developed the device, has a story that is natural and resonates in the current landscape.

Breaking through the noise

It is noisy out there; social media feeds are full of COVID-19 advice and emails acknowledging that every company you have ever dealt with has a COVID-19 policy. This too will pass. Advertising spend is already decreasing. With potential drops in revenue, this does make sense, but the companies that responded best after 2008 were the companies that remained in the market and continued to tell their stories. If you are crowdfunding, it will be easier to get your story out, as you will be competing with fewer companies and lower overall marketing spend.

See:  Getting In Early: SEC Sees Growth In Equity Crowdfunding

We are social creatures; working from home, we may look to other ways to stay connected. Business channels such as Slack, LinkedIn and Zoom and social channels such as Instagram and Facebook will be our source of connection. These are the main outreach channels for crowdfunding. The increase in working from home means potential investors could have more time without the daily commute and be online more, as well.

A webinar will replace the events cancelled on Thursday and this Tuesday. Potential investors have the opportunity to ask questions and gain trust and understanding so that they can move forward to invest. A face to face launch event scheduled the following week will be live-streamed. This will allow a small group from the company to be present and the larger group of interested investors to meet the team and hear the key information.

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NCFA Jan 2018 resize - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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KABN (Gibraltar) PLC to Launch ERC 1400 Equity Token Offering

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KABN Network | David Lucatch | Dec 9, 2019

Clipboard04 - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public MarketsCrowdfunding Offering supported by UK Based Tokenise and KABN Equity Token created using Polymath Token Studio

Gibraltar--(Newsfile Corp. - December 9, 2019) - KABN (Gibraltar) PLC ("KABN" or the "Company") is pleased to announce that it has created its KABN Equity Token using the Polymath Token Studio and will make its Equity Token available for sale through a public Equity Crowdfunding sale via UK based Tokenise, which is fully compliant with the UK FCA regulatory framework. The Company's Token Offering information site can be found at www.kabntoken.com.

Unlike a network or utility token, each KABN Equity Token will represent a KABN (Gibraltar) PLC Preference Share as equity or ownership in the Company.

After spending well over 2 years to develop, test and launch its active business platform, KABN believes that ownership of identity is a basic human right and that individuals should be the primary beneficiary of any use of that identity data. To that end, KABN has developed a continuous, Always On, verified identity solution for commercial clients and consumers that allows individuals to manage both their private and public data, restricting the sharing and use of that data while benefiting the user. KABN also has a platform that will help users maximize value of their data through qualified offers from 3rd parties, including KABN's Financial Services program KABN KASH and its Pegasus Flyte digital currency linked VISA card program.

See:  Polymath and KABN Announce Consortium to Accelerate the Creation, Distribution, and Management of Digital Securities Across Multiple Jurisdictions and Platforms

The KABN Equity Token is a new generation of Security Token Offerings created with the Polymath Token Studio, allowing qualified private and public investors to purchase KABN Preference Shares, or Equity in the Company, represented by tokens on the Ethereum Blockchain. The KABN token can be viewed by visiting:

https://etherscan.io/token/0xa3B13D8071A633434B01f4C908C3Fe3874Fbbcf8#readContract

KABN has designed its Equity Token Offering to be a true investment in the Company, allowing Preference Share and Token Holders to participate in the potential growth and long-term value appreciation of the Company. KABN Preference Share / Equity Token Holders will receive first priority of dividend distribution and in the event that KABN has a liquidity event, all KABN Equity Token holders will be included in the event, allowing KABN Equity Tokens holders to truly benefit in the Enterprise, or overall value of the Company.

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NCFA Jan 2018 resize - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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What to expect from social fundraising world in 2020

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FundRazr | Mira Soullen | Dec 16, 2019

FundRazr holiday greetings and social fundraising 2020 - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public MarketsFundRazr is a free enterprise-class crowdfunding platform and the secret sauce behind 160,000 fundraising campaigns in 40+ countries. FundRazr is laser-focused on eliminating the guesswork of raising money online making it effortless and effective. 

What to Expect from the Social Fundraising World in 2020

Things are constantly changing in the world of social fundraising, also called “crowdfunding”, but it’s safe to say that 2019 was an especially interesting year. As some more traditional fundraising methods lost relevance, we helped many organizations try out crowdfunding and social media fundraising for the first time, embracing emotive, personalized storytelling and its wide-ranging impacts.

As a result, FundRazr’s community of nonprofits grew their social fundraising confidence and worked to engage Millennials and Gen Z with their causes, inviting them into giving and finding new longterm donors and advocates.

Wow. A year of change, for sure - but now, it’s almost over! What developments can we expect to see in the social fundraising world as we move into 2020?

See:  Social equity must be central to urban tech innovations

Businesses and Charities Will Find Better Ways to Collaborate

Commerce and charity working together is nothing new, but it’s a trend that will continue to strengthen. For many nonprofits, finding new longterm sponsors is uncharted territory, and many staffers may feel that it’s out of their wheelhouse. However, developing mutually beneficial sponsor relationships and marketing partnerships are critical goals to work towards. Once you find a business that’s the right fit, they won’t just provide monetary support - they’ll become passionate advocates for your cause!

Furthermore, an economic recession is a very real possibility for 2020 that must be taken into account. By working together, charities and for-profit businesses can mitigate the revenue shortfalls that are part of an economic downturn. This can be a mutually beneficial relationship - consumers may be more likely to spend money at a business where their dollar is doing something good, and people who would not have otherwise donated might be more likely to if they do it together with a sponsor: for example, you can offer Perks of your sponsor’s product, or receive a small percentage of your sponsor’s profits.

Working with sponsors can help you Make Everyday Giving Effortless (MEGE). People want to give easily, and through channels that are convenient to them. Today, that means giving through smartphones, and donations processed immediately so that they can be easily shared on social. Systems to gamify donation or offer fun perks in return apply here, too.

Donors Will Be Encouraged to Give Less, but More Often

When it comes to donations, frequency will be king. It might sound surprising, but ten $50 donations are a lot better than one $500 from the point of view of the fundraiser. These frequent, smaller micro-gifts help cultivate giving habits and emotional involvement in your cause, establishing the donor as part of your community and eventually, a long-term advocate. By giving often, they’re staying in touch, sticking around for updates on where your work’s at and how their gift will help. The more involved your donors are, the better their lifetime value for your organization.

This trend is also ideally suited to micro-projects, and with FundRazr, more campaigns doesn’t mean more time spent running them! Consider making a campaign for each individual project you’re working to complete - for example, each house you’re trying to build in a hurricane-damaged region, every family you want to provide with Christmas dinner, or every animal you need to keep off the street.

See:  Online Giving Trends Show Consistent Growth in the US Since Donation Crowdfunding Debuted in 2012

This kind of donation and fundraising is a win-win: it more closely mirrors the actual work your organization is doing, so that your donors feel like they’re “part of the team”. The more engaged donors are with your mission, the happier they’ll be to help.

Segmentation and Sophisticated Storytelling Will Become Even More Important - Personalizing Donor Experience is Everything

If you’re working in the nonprofit sector, it’s because you care about what you do. To fundraise successfully, you need to help potential donors care just as much. Storytelling is the way to engage people, but sophisticated, personalized storytelling is how you will truly engage as many people as possible.

Let’s say you’re running a wildlife rescue. Since you’re an animal nonprofit, you might draw the conclusion that anyone who loves animals could be a potential donor. And you wouldn’t be wrong, exactly - but it’s not that simple. For example, 20% of your donors might be donating because they care about hawks, while another 30% might like foxes, but not care as much about birds. Identifying these donor segments and marketing to them effectively will help you speak to them in a way that will resonate and optimize your revenue potential.

By showing your audience personalized content according to segmentation (showing your bird lovers hawks), you can make sure their impression of your charity is a memorable one.

Ephemeral Content Will Continue to Rise

In social fundraising, ephemeral content means two things: content that only exists for a short time (like Instagram Stories) or content we only pay attention to for a short time (an Instagram post). Clearly, ephemeral content is tailor-made for social media. This type of content lets you reach a wider audience, engage with them, and elicit an emotional reaction - all without too much labour-intensive content production.

Think of ephemeral content as a greeting card for your organization. It’s sent out to many people (Instagram’s hundreds of millions of users), is fun and simple (a nicely designed graphic, not an original video), and it shares a feeling by sharing the work you do. These personal, emotional stories will get the word out about your mission and plant the seed of donation in your audience’s minds. Make a plan to share content like this at least once a day.

Social Activism Will Keep Growing - And You Need to Keep Up 

People are more attentive to social causes than ever, and that’s a wonderful thing. Look at the climate justice movement Greta Thunberg is leading - people all over the world are getting involved, and a large part of it is on social media! Whatever your nonprofit’s mission adopting social fundraising tools and techniques will only get more important. In 2020, if your cause doesn’t have an online community cheering it on, it might as well not exist in the real world.

The statistics around online activism are staggering. Roughly half of United States citizens have been civically active on social media in the past year. If you’re wondering what that looks like, some examples are changing your profile picture to support a cause, posting about voting in an election, looking up information on protests or rallies, and using political or social hashtags.

See:  Crowdfunding campaign raises $3 million to protect Princess Louisa Inlet property

Many people believe we are living in a watershed moment for social change. People are dissatisfied with the current state of society, and are beginning to create a vision of what else is possible. As charities, if we offer actionable steps towards change, real progress is possible. If you share the impact each donation makes, it inspires people to give more often. It’s an exciting time for nonprofits, but we need to stay up to date with today’s world to take advantage of it.

Revenue Diversification Will be Even More Important

There are still many charities who rely on a single source of income. Whether it’s grants, major donors, or large fundraising events like galas, this is a risky proposition. With economic turmoil happening globally and older fundraising techniques dying out, it’s more important than ever to diversify to ensure cause longevity and survival.

It’s time for all nonprofits to push their comfort zones. It’s critical to try out new ways of revenue generation like crowdfunding. Establishing multiple streams of income will allow you to set up a sustainable charitable model that mitigates all inevitable risks.

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The Donor Journey’s End Will be Just as Important as its Beginning

We all know that a compelling, convincing story is important. Introducing potential donors to your cause, crafting a strong ask, and guiding people to the donate page are all essential parts of the donor journey. However, many nonprofits forget about optimizing the end of the journey - the actual donation page!

Unfortunately, we see many nonprofit websites with broken donate buttons or donation pages that aren’t optimized for mobile. When donors finally click ‘donate’ they’re at the peak of their emotional engagement with, and excitement for your cause.  The donation page, and the actual act of donating, should carry on this experience - not kill it.

It should be a priority to make sure their donation page is mobile-optimized. Social sharing must be enabled and the page should have a short story reminding donors why they decided to give. If you’re working with FundRazr, use our one-page donation template. It includes all the necessary elements the make sure donation is just like the rest of their experience - positive and inspiring!

Change might be scary, and social fundraising world has seen a lot of change over the past year. But even though 2020 will be bringing more change, it’s a great and exciting time to be a nonprofit - as long as you’re willing to adapt.

Happy Holidays and hope your 2020 will be exciting and positive.

 


NCFA Jan 2018 resize - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Fintech Canada Directory Category: Capital Markets | DeFi | Crowdfinance

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NCFA Jan 2018 resize - Fintech Canada Directory Category: Capital Markets | DeFi | Crowdfinance The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Crowdfunding campaign raises $3 million to protect Princess Louisa Inlet property

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CBC News | Sep 3, 2019

Andrew day BC parks foundation - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public MarketsThe fundraising campaign to buy a swath of remote coastal wilderness on the Sunshine Coast has been a success.

The B.C. Parks Foundation, an independent charity that works with B.C. Parks, was able to raise $3 million to buy 800 hectares in Princess Louisa Inlet from a private seller. The inlet is about 100 kilometres northwest of Vancouver.

The last amount of the money needed came in at the last minute, right on Tuesday's deadline.

B.C. Parks Foundation CEO Andrew Day says this will be one of the first crowdfunded protected parks in the country.

"It's just an amazing, amazing thing that people have done," he said.  "It was so many people who gave us $10 or $15 and said, 'This is all I can do, but this is a wonderful thing that you're doing.'"

The sale will not be final until Sept. 3, but Day says he does not expect anything to stand in the way.

"We knew that there had been a couple offers from forestry companies to buy that property and that's why we got involved in the first place," he said.

Day has previously said the B.C. Parks Foundation wants to keep the land from being logged and developed.

"It's really a huge portion of the inlet and we'll do our best to make sure that that area stays protected forever," Day said.

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NCFA Jan 2018 resize - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Regulation Crowdfunding Surpasses $250,000,000 in Commitments The Model is Working but its Potential is Much Greater

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Crowdfund Capital Advisors | Sherwood 'Woodie' Neiss | Aug 7 ,2019

RegCF - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public MarketsIt has been just over 3 years since Regulation Crowdfunding (Reg CF) went into effect and most recently the industry surpassed a quarter of a billion dollars in commitments. Since inception over 1,800 companies in cities all across the United States have filed to raise money under Regulation Crowdfunding. Over 271,000 investors, most of which are friends, followers or customers of these businesses have made commitments to start, scale or expand operations.

The average raise stands around $237,000 which firmly addresses the Valley of Death[1] issue. Most of the successful companies are raising funds in less than 90 days which is far faster than other forms of financing like Venture Capital or Bank Loans. There’s been no fraud or Wild West as opponents had claimed.

“Essentially we built a financing mechanism which is doing exactly what we said it would,” said Sherwood Neiss Principal at Crowdfund Capital Advisors (CCA) “We’re funding local businesses with a vested group of local investors that is creating local jobs and powering local economies.”

Regulation Crowdfunding began on May 16, 2016. It allows any startup or small business to raise up to $1,070,000 online from family, friends and followers (accredited or not) provided issuers use an online investment platform that is registered with the Securities and Exchange Commission (SEC) and disclose information about their company and financial wellbeing.

See:  The SEC Publishes Report on Reg CF: “The number of crowdfunding offerings as well as the total amount of funding during the considered period was relatively modest”

Since the industry began, Crowdfund Capital Advisors has been collecting information on every offering in its CCLEAR Database. CCLEAR is the leading Regulation Crowdfunding database that collects, cleans, aggregates and reports on all companies seeking funds via Regulation Crowdfunding as well as those doing parallel 506(c) offerings[2]. This information includes financial performance, security offering, valuation, industry, daily commitments and number of investors. The information is summarized and published on a daily basis on the CCLEAR Regulation Crowdfunding dashboard.

Here are some key data trends:

  • Capital commitments – From FY17[3] to FY18 capital commitments increased 178% from $45.7M to $81.1M. The second full FY of Reg CF saw capital commitments increase 139% to $113M. Total capital commitments to date is over $250M.
  • Issuers – During the same period the number of companies seeking to raise funds increased 187% from 317 to 592 and 137% to 810 in FY19. Total issuers to date is over 1,800.
  • Investors – The number of individual investors grew from 44.5k in FY17 to 92.6K in FY18 to 117.8K in FY19. Total investors to date is over 270,000.

“No matter how you look at it, there’s been an impressive growth of at least 250% in 2 years,” says Neiss. “If we extrapolate out over the next 2 years, we estimate that over 3,400 companies across the United States will receive half a billion dollars by over half a million investors.”

CCLEAR captures a maximum of 56 different industries from Advertising and Marketing, to Healthcare and Utilities. During the first fiscal year there were 44 industries represented. That number increased to 47 last fiscal year. While application software, alcoholic beverages, business services, consumer packaged goods, entertainment, personal services and restaurants were the most common industries seeking funds, financial services, business services, employment services and retail saw the greatest increase in offerings between the first and third fiscal years.

“The wide representation of so many industries speaks to the broad appeal of regulation crowdfunding to both companies seeking and investors looking to deploy capital,” says Neiss. “No matter what industry you are in, if you have an engaged group of customers that could be investors, Regulation Crowdfunding is something you should explore.”

Companies in 48 of the 50 States have registered to raise funds via Reg CF.

See:  OurCrowd Double IPO Success Provides Crowdfunding Validation

From an employment perspective, the data shows that Reg CF continues to sustain and support local jobs. In the first fiscal year over 1,482 jobs were supported. This grew by another 3,150 in the second fiscal year and another 4,448 in the third.

“Collectively almost 10,000 jobs have been supported around the United States since the launch of Regulation Crowdfunding,” says Neiss.

“We expect this number to grow by another 10,000 in the next 2 years. 20,000 jobs means 20,000 people employed by local businesses and reinvesting their income back into these communities through mortgage payments, groceries, dining out, education and more. This is how we support local economies. And we are doing it despite the current $1M cap on company raises. Imagine what we could do if we increased these caps from $1M to $5M, $10M or $20M? It is easy to see how we could increase this from 20,000 to 200,000 jobs.”

While not all Regulation Crowdfunding companies are revenue generating those that are had over $400M of Revenue in their most recent fiscal year.

“Given that the majority of these firms are growing and reinvesting their earnings, you can only imagine the multiplier effect that this has on local economies,” says Neiss. “Businesses are reinvesting into their local economies by purchasing goods and services to support them and hiring employees. And employees are using their paychecks to support themselves. Together we estimate they are pouring close to a billion dollars into local economies.”

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NCFA Jan 2018 resize - How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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