Global fintech and funding innovation ecosystem

How Crowdfunding Can Support a Post-Covid World

Bennett Milner Williams Consulting Ltd. | Victoria Bennett | Jan 27, 2022

BMW consulting Crowdfunding can support a post covid world - How Crowdfunding Can Support a Post-Covid World

We are all in the COVID sea, but each of us is on different ships. Companies that rely on face-to-face contact, such as accommodation and food services, have been negatively impacted, whereas online delivery has seen significant growth. The CFIB Small business recovery dashboard shows that as of 19th August 2021, 76% of small businesses are fully open, with 47% fully staffed and 39% at normal sales. The data doesn't show the massive variation within respondents, but it is fair to say, sales for small businesses are, overall, way down.

Women have been disproportionately affected by COVID

McKinsey has been sharing their weekly view on the impact of COVID. Their analysis has shown that although women make up 39% of global employment, they have experienced 54% of overall job losses.  Women have been disproportionately represented in industries that have declined due to COVID. Much of the job creation focus has been in male-dominated industries such as communication and construction.

The National Angel Capital Organisation’s (NACO) 2021 report on Angel Investing highlighted the research in Crunchbase's 2020 report. It found that 20% of global startups were woman-founded, but women were less likely to seek and receive financing than men (32.6% vs. 38%). Businesses owned by men are more likely to receive venture capital, angel funding and other forms of leverage such as trade credit and capital leasing. Concerningly, Crunchbase 2020 data shows that the proportion of dollars to women-only founding teams declined, to 2.3%, compared to 2.8% in 2019. Underrepresented organizations, including Black and Indigenous founders, also receive less capital.


The reduction in investment in women-only businesses is worrying since women have been disproportionately affected by COVID. The negative impact for women in business during this time has been exponential in nature. It is a double whammy.

I recall speaking at the Global Crowdfunding Conference in 2016 on the increased success for women and underrepresented organisations through crowdfunding. The PWC data supported these findings a year later, with 17% of male-led campaigns reaching their finance target, compared with 22% of female-led campaigns. Overall, campaigns led by women were 32% more successful at reaching their funding target than those led by men, data seen across multiple sectors, geographies and cultures. ESMT's data in 2019, again, backed this up.

If you are curious, the drivers for success include the ability to tell stories that engage potential investors and the ability to multi-task, as it is not one tool that leads to an investment. These skills are often seen well expressed in women.

COVID has changed business permanently

COVID has accelerated change. We've had a lifetime of social change in less than two years. COVID-driven change has opened up opportunities, and if I can say the overused phrase, the opportunity to pivot and create businesses that meet people's new needs. 92% of small businesses have pivoted in at least one way, but many have pivoted in multiple ways. Only 8% did not pivot their business at all to adapt to the current environment.

The biggest challenge for small businesses has been the lack of skills for the new approach. Followed by a scarcity of funds to make the changes needed to survive, thrive or grow.

Crowdfunding’s role in raising capital in a post COVID world

Crowdfunding can play a crucial role to address the capital gap for businesses. We need to raise awareness of crowdfunding in companies looking to pivot and capitalise on the new opportunities—investment in new businesses and investment in women-led, black, and indigenous founders.

Just as we discussed the different journeys each of us has had in the COVID sea, we've also seen different financial impacts. Households in Canada have increased their net savings due to government support and reduced spending. At the same time, the comfort in online financial transactions has increased. Crowdfunding breaks the barriers so that all Canadians, not just the wealthiest, can invest in companies. This releases capital to invest in businesses to help them pivot and capitalise on the new opportunities.

See:  Fintech Fridays EP56: How We Raised $426 million Using Rewards Crowdfunding

The capital available for crowdfunding was already pretty buoyant. The transaction value in the Canadian Crowdfunding segment is projected to reach US$23.1m in 2021.

  • Transaction value is expected to show an annual growth rate (CAGR 2021-2025) of 1.61% resulting in a projected total amount of US$24.6m in Canada by 2025.
  • Even though Canada is a relatively large player in the alternative finance space, our Southern neighbour, the US, still leads with a projected $1.2b in total transaction value in 2020. Even with our new harmonised regulations, due in September, Canada's regulations lag behind the US, but that is a separate article.

Our two most recent contracts are with visible minorities, one is a women led and indigenous business. Both are excellent businesses that meet a need in the marketplace. Through crowdfunding they will benefit from growing their awareness and customer base. Crowdfunding has also opened up access to capital for both companies.

Governments have spent a significant amount of money to sustain people and businesses through the COVID crises. But it hasn't been enough to build new businesses and create jobs to replace those lost. The taps will start to be turned off soon. The capital available through crowdfunding can be used to build business and employ the most impacted. I hope the provincial securities commissions and the government will leverage the new harmonised regulations to encourage new companies and new investors.

About the Author

Victoria Bennett - How Crowdfunding Can Support a Post-Covid WorldVictoria Bennett, FCIM, BSc(Hons)

Victoria is an NCFA ambassador and Principal of the crowdfunding agency, Bennett Milner Williams Consulting Ltd. She founded The Crowdfunding Hub to provide broader access and support to organisations raising capital through crowdfunding and is a passionate believer in the democratisation of capital through crowdfunding.


NCFA Fintech Confidential Issue 4 250 - How Crowdfunding Can Support a Post-Covid World

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