Online Funding / Investing Portals | National Crowdfunding & Fintech Association of Canada

September 10, 2014 Fundraising, Investing, Trading, Online Funding / Investing Portals No comments

Crowdfunding for Charities. Do you Giveffect?

Betakit | By Elena Yunusov | Sep 5, 2014

Toronto startup Giveffect just launched a custom, white-label crowdfunding solution for charities, a much needed initiative in the space dominated by Kickstarter and Indiegogo.

Charities have always been active fundraisers, but popular crowdfunding platforms that often focus on the latest gadgets, products and personal projects lacked features most charities require, such as automated tax receipts and integration into existing CRM.

“We’ve completely bootstrapped Giveffect up until now, and now we’re able to expand and launch a crowdfunding enterprise software. We give nonprofits and charities their own Indiegogo built into their website. Non-profit crowdfunding is here to stay. It’s simply not a trend anymore, and we’re here responding to the shifts in fundraising demand nonprofits are seeing,” Anisa Mirza, co-founder and CEO of Giveffect told BetaKit.

View: What civic crowdfunding means for non-profits

It’s been two busy years at Giveffect. In its first year, the team focused on building up its own platform, serving charities in Canada, UK, and the US. In its second year, Giveffect moved to a new office space at George Brown Digital Media and Gaming incubator, doubled its headcount, reached profitability, and launched a much anticipated white-label crowdfunding enterprise software.

Charities that sign up with Giveffect to run crowdfunding campaigns often never experienced this type of fundraising before, but that’s changing quickly.

“We had a very positive experience with Giveffect. The actual product itself was easy to use, allowed for our donors to write us messages, upload photos.Our charity focuses on raising funds to supply computers for youth, so this was a great fit. We’ve raised double our goal, and 90 per cent of our donors were new. We didn’t think that was going happen! It changed our perspective on fundraising in general, and was a great learning experience,” says Justine Katz, Development Officer at Sky’s the Limit.

Given the success, it isn’t surprising Sky’s the Limit jumped on the chance to become one of the first clients for the new white-label product, and launched a fundraising campaign on their home site, powered by Giveffect.

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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 | About Crowdfunding or contact us at casano@ncfacanada.org.

September 10, 2014 Fundraising, Investing, Trading, Online Funding / Investing Campaigns, Online Funding / Investing Portals No comments

High-tech bike is Kickstarter Canada’s most funded project to date

The Globe and Mail | Brenda Bouw | Sep 10, 2014

An interactive bicycle, a magnetic pen and the soon-to-be released Corner Gas movie are some of the hundreds of projects funded via Kickstarter during its first year in Canada.

Kickstarter, a crowdfunding venue for creative projects, is celebrating its first anniversary in Canada this week, boasting more than $24-million in funding for about 3,700 projects.

“This is a new source of funding and support for the arts, culture and innovation” in Canada, Kickstarter spokesperson Justin Kazmark said in providing the statistics.

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“A community of hundreds of thousands of people from all over the globe has emerged to bring some of the most imaginative ideas to life from Canada’s most creative minds. In just under a year they’ve directed tens of millions of dollars to creative projects that might not have otherwise had a chance to exist.

As of late Tuesday, Kickstarter says there were a total of 303,675 pledges totalling $24.4-million. The money helped to launch 3,650 projects, including more than 400 live projects.

The most funded project in Canada to date is the Vanhawks Valour, a connected bike that tracks performance and safety as you ride, including Bluetooth to connect to your smartphone for directions. The Toronto-based engineers who invented the bike set out to raise $100,000, but received more than $820,000 from 802 backers.

A close second was the Polar magnetic pen. Andrew Gardner, the Waterloo-based inventor of the multipurpose writing tool, set out to raise $14,000, but instead received about $817,000 from 14,253 backers.

Castle Story, a computer strategy game designed by Sauropod studio in Montreal, received the most backers at just over 27,060, who collectively pledged $702,516.

“Diverse funding sources are great for creativity and culture – the greater the diversity of funding sources, the greater likelihood that creators will create,” said Mr. Kazmark Another popular project was Corner Gas. The Movie, which set out to raise $100,000, but instead received almost triple that amount – or $285,840 from 2,526 backers. People who pledged during the 30-day campaign received everything from their name in the credits for $25, T-shirts for $50 and one-backer paid more than $8,000 for a private screening of the film, which is expected to be released later this year.

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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 | About Crowdfunding or contact us at casano@ncfacanada.org.

September 5, 2014 Fintech International, Fundraising, Investing, Trading, Innovation and Resources, Online Funding / Investing Portals No comments

Wix founders invest in crowdfunding site give2gether

Times of Israel | By David Shamah | September 5, 2014

The two Israeli start-ups are joining forces to help non-profits raise more money from donation campaigns

Coming off a hugely successful IPO last year, the founders of Israel-based website builder tool provider Wix.com are giving back to the community — in the form of an investment in give2gether, the crowdfunding platform for non-profit organizations. Wix did not say how much it was putting into the fund, but the investment is said to be “significant.”

Give2gether CEO Arnon Shafir welcomed the Wix investors to the platform. “The Wix co-founders believe that give2gether is outsmarting the crowdfunding heavyweights,” said Shafir. “Give2gether powers a new generation of smart crowdfunding campaigns to go beyond being just social or cool — but effective.” The Wix co-founders, Giora Kaplan, Avishai Abrahami and Nadav Abrahami, will not be taking on any official role in give2gether and will not be involved in the day to day operation of the company.

Give2gether was developed by Shafir to battle what he calls “donor fatigue” — where donors, tired of being tapped for endless causes, close their wallets. “We advise organizations to use non-intuitive methods to appeal to donors, based on extensive research our team has done on what makes people give to causes.

Much of our methodology is based on game theory, as applied to social network-based fundraising campaigns,” said Shafir. The system is somewhat similar to the product crowdfunding techniques used by sites like Kickstarter, but the 10,000 hours of research that has gone into give2gether’s methods, said Shafir, “makes us like Kickstarter on steroids.”

Some of those non-intuitive methods could include limiting the amount of money donors can give to a cause, said Shafir. According to research by give2gether — and proven, Shafir said, by numerous case studies — capping donations at a certain amount paradoxically increases the overall pool of money raised. When individual donations are limited, more donors feel they have a stake in the success of the project, because their money appears needed – and they’re more likely to urge others to get involved as well.

View: Check out the Canadian Crowdfunding Directory

“Every dollar does not necessarily count,” said Shafir. “What’s more important, and more beneficial for non-profits, is widening the circle of donors. In the end, organizations will raise more money when the crowd is bigger, and everyone feels they have a stake in their success.”

There’s a long record of success to give2gether’s off the beaten track approach. The average give2gether crowdfunding campaign is five weeks and raises $38,000. One give2gether campaign raised $60,000 in less than 24 hours. A campaign called “Save a Child’s Heart to Climb Mount Kilimanjaro” raised over $700,000 through give2gether. Investor Nathan Low’s “Bike for Chai Life Line” individual fundraising page raised more than $155,000 using the platform. Give2gether won the Best Start-Up award from the Israeli military Unit 8200.

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August 29, 2014 Equity Crowdfunding, Alternative Funding, Fintech International, Fundraising, Investing, Trading, Online Funding / Investing Portals, Venture Funding and Building, Voices No comments

Top 5 Things You Should Know About Equity Crowdfunding Platforms

Forbes | Goncalo de Vasconcelos | Aug 8, 2014

“What should I look out for when choosing an equity crowdfunding platform?” If you think the platforms are all the same you could find yourself out of luck and out of pocket a few years down the line.

[Disclaimer: I’m a co-founder of SyndicateRoom, one of the equity crowdfunding platforms covered in this article. Throughout the article care has been taken to separate my opinion from facts related to each platform. It was assumed an average investment of £2,500, roughly the average that each online investor commits per investment.]

While less savvy investors, and the media, are picking up on the fact that investing in companies through crowdfunding poses a risk which is inherent to investing in any young company, less notice has been taken of the underlying danger posed by the platforms through which the transactions are made and the deals are arranged.

The three largest equity crowdfunding platforms in the UK are Seedrs (minimum investment of £10 into very early-stage startups), Crowdcube (minimum investment of £10 into startups), and SyndicateRoom (minimum investment of £1,000 into early-stage and more established companies).

Here then, are the top 5 things an investor should look for when selecting an equity crowdfunding platform to invest through.

1) Is the platform entrepreneur-led or investor-led?

Entrepreneur-led platforms are those where entrepreneurs set the investment terms including share price and the amount of equity given away. Investor-led platforms are the ones where a lead investor negotiates more beneficial terms for investors, invest their own money and then the crowd can invest under the same terms. If you think of Dragons Den, entrepreneur-led platforms allow you to invest at the bottom of the stairs, before any negotiation. Investor-led platforms allow you to invest with the Dragons at the end of a pitch and for the amount of equity as they have negotiated for themselves.

Facts: Crowdcube and Seedrs are entrepreneur-led platforms. SyndicateRoom is an investor-led platform.

2) Can I get diluted out?

If the shares on offer come with pre-emption rights, this means that investors have the right to ‘follow’ their money in subsequent funding rounds, protecting them from future dilution. For those of you that have watched the movie ‘The Social Network’ and wondered how Facebook managed to dilute the shareholding of Eduardo Saverin, one of the business’ founders of Facebook, from 30% to just 0.5%, this is how. Any investor without pre-emption rights could invest in the next Facebook but not see any returns. You will instead be supporting someone else to get rich whilst running the risk of being pushed aside when it really matters. All in an entirely legal process. This is how it works:

A company has 100 shares. Say that your investment bought you one share out of the 100. You own 1% of the company. Now imagine that you invested in the next Facebook and it is going to be sold for £100m next week. You get your calculator out and find out that you will get £1m, which is pretty cool. So you treat yourself to a Ferrari and a nice yacht, which you’ll pay for next week when the company gets sold and you get paid your £1m. Except that you won’t. In an entirely legal process, the entrepreneur could issue 1,000,000,000 shares the day before the company gets sold and buy them all for £1. If you don’t have pre-emption rights you cannot buy any of these shares. Now suddenly, instead of owing 1% of the company, you own 0.0000001% and will be paid £0.10 back.

Video: Supercharged Equity Crowdfunding, Interview with CEO/Founder, Matt McGrath of Optimize Capital Markets

So instead of being paid £1m, you are paid £0.10. All because the Crowdfunding Platform you invested through didn’t give you pre-emption rights.

When super-angel Jonathan Milner was asked whether he would ever invest in a good business opportunity without pre-emption rights, he categorically said no. So did business angel Graeme Porteous and a number of others. No business angel would ever accept investing without pre-emption rights, so why should the crowd get any less just because the amounts they invest are smaller?

Facts: Seedrs and SyndicateRoom both offer pre-emption and voting rights to their investors. Crowdcube doesn’t. Read more about this in an excellent article by Investors Chronicle here.

3) What is the due diligence like?

Due diligence (see Inline Reference Check, for Background Checks and Screenings) is a detailed investigation of a company by a potential investor, for the purpose of evaluating that company as an investment opportunity. This is an extraordinarily important part of the investment process. However, due to financial regulations and none of the platforms wanting to attract potential liabilities, the due diligence carried out tends to be hidden away and not shared with investors.

Facts: There are no facts to state for this one. Your best chance here is to look at the investment opportunities on each platform and consider their quality. Do the companies appear to have undergone an extensive process and review before being taken live?

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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 | About Crowdfunding or contact us at casano@ncfacanada.org.

August 25, 2014 Entrepreneurs, Start-ups, Small Businesses, Fundraising, Investing, Trading, Innovation and Resources, Online Funding / Investing Portals, P2P, Lending, Digital Bonds, BNPL, Private Credit No comments

InvestNextDoor Crowdlending Marketplace Drives Community-direct loans

InvestNextDoor | Tabitha Creighton | August 25, 2014

Seattle, WA, August 21, 2014 – In 6 weeks of operations InvestNextDoor has more than 50 new listing applications in progress from small businesses looking for a better way to borrow. InvestNextDoor is part of the growing Crowdlending industry, where businesses borrow directly from investors, bypassing banks and financial intermediaries. “It’s like crowdfunding but supporters make money instead of getting rewards,” says Tabitha Creighton, CEO of InvestNextDoor.

Unlike early market entrants, InvestNextDoor’s marketplace enables investors to directly invest in businesses, creating a true direct Crowdlending marketplace. Tabitha Creighton, CEO of InvestNextDoor went on to say: “This kind of progress demonstrates why we hit the reset button on borrowing and investing. It’s no secret that small businesses succeed because they’re loved by their communities –so who better to lend to them?

InvestNextDoor has created a community‐engaged Crowdlending marketplace. It creates a new source of reasonably priced capital for small businesses, and better returns for Main Street investors.”

Small businesses create listings including how much they want to borrow and investors bid auction‐style on the rate and amount they’re willing to invest. This keeps costs low, maintains fairness and creates autonomy in the marketplace. InvestNextDoor has transferred the services banks, direct lenders and VC’s use for underwriting and due diligence, directly to the hands of borrowers and investors.

Lisa Ohman, COO and technical co‐founder noted: “True crowd‐based lending enhances traditional financial risk profiles with the impact of knowing the people you’re borrowing from, and them knowing you."

View: NCFA hosts Crowdlending panel discussion with InvestNextDoor and GroupLend

Having investors be able to walk into the shop or refer customers to help support the business they’ve invested in, is a model that could create a much stronger connection that amplifies the impact of the actual dollars invested. You're not just investing in that business, you're investing in their community as well - and getting market rates of return. It is complete disruption of traditional lending models.”

Transparency matters; and small businesses can find out how much it could cost to borrow right on the home page with InvestNextDoor’s Instant Summary tool.

With bank and credit union approval rates between 18 and 51% for small business loans and only 50% of private capital raises meeting their goals, small business needs more money to grow. Small business drives 50% of GDP and 50% of employment and a lack of capital means a slower economic recovery. Clearly, borrowing and saving cycles are broken and out of sync with what’s really needed. InvestNextDoor is creating a win - win for both investors and borrowers as expressed by Leanne, a recent customer of InvestNextDoor: “InvestNextDoor is a concept LONG overdue. Small businesses can borrow at rates better than at the bank and investors can earn more interest than at the bank. It’s definitely a win‐win for both parties.” – Leanne, Small Business Owner

About InvestNextDoor

InvestNextDoor (www.investnextdoor.com) is a Crowdlending marketplace where individual investors lend money to small businesses in their community. It creates a new source of reasonably priced capital for small businesses, better returns for Main Street investors and longevity for community-based financial services. Focusing on communities first amplifies the economic effects of consumer investment in small businesses by keeping more of the benefits lifecycle within a given community. InvestNextDoor is hitting the reset button on borrowing and investing for Main Street.

Source: InvestNextDoor Press Release

Media Contact

Contact: Tabitha Creighton
Telephone: 1‐206‐453‐0048; Cell 604‐353‐8454
Email : founders@investnextdoor.com
For more info visit: https://www.investnextdoor.com/

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.

July 24, 2014 Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, Fintech Interviews and Podcasts, Fundraising, Investing, Trading, Online Funding / Investing Portals, Voices No comments

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 : 65861

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.

July 22, 2014 Equity Crowdfunding, Alternative Funding, Fintech International, Fundraising, Investing, Trading, Online Funding / Investing Portals, Stories No comments

£1.2m raised in 16 minutes? That’ll be a world record

The Telegraph | By Rebecca Burn-Callander | July 22, 2014

Crowdcube, the equity-based crowdfunding platform, has broken the world record for the fastest fundraising after taking just 16 minutes to hit its target.

In a world first, Crowdcube, which raises funds from armchair investors in exchange for equity, today closed a £1.2m round within just 16 minutes.

This was 12 times faster than the previous record for the fastest crowdfunded pitch and set a world record for the fastest equity crowdfunding raise of all time.

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The previous record for the fastest equity crowdfund was Crowdfunder, a Cornwall-based crowdfunding platform focusing on rewards, which raised £500,000 in three hours.

Darren Westlake, Crowdcube CEO and co-founder said: “This is the first time that any sizeable fundraise has meshed traditional and alternative finance methods and we expect to see more of this in the future.

141 investors backed Crowdcube’s latest round of crowdfunding, which will be used to expand the company's operations both in the UK and internationally.

The average amount invested topped £8,500.

This latest round follows a £3.8m cash injection from venture capital firm Balderton Capital last week.

The company, which now has a presence in seven countries, including Brazil, Sweden, Dubai, Poland, Italy, Spain and New Zealand, is hoping to build a truly global crowdfunding platform.