Invest CrowdFunding (ICF) - Technicity · What is Invest CrowdFunding? Crowdfunding is the...
Transcript of Invest CrowdFunding (ICF) - Technicity · What is Invest CrowdFunding? Crowdfunding is the...
Invest CrowdFunding (ICF)
“Should ICF be legalized
in Ontario?”
Moderator: Dr. Cindy Gordon
National Chair Invest CrowdFund Canada;
CEO, Helix Commerce International and
Co–Founder, SalesChoice
Founder, CrowdfundChoice.ca
Co-Founder, Angel Fund
Why we are here?
• Innovation & Economic Growth Opportunity
• Learn about Invest Crowdfunding (ICF) trends
• Hear expert points of view & experiences
• Engage in table discovery on legalizing ICF
• Summarize forum results in a Technicity Brief
Agenda
7:30 – 8:30 Registration and Networking Breakfast
8:30 – 8:45 Welcome and Opening Remarks
8:45 – 9:00 State of the Nation
9:00 – 9:30 The Success of Equity Crowdfunding in the UK
9:30 – 10:30 Panel Discussion: "Why Should Crowdfunding be
Legalized in Ontario?”
10:30 – 10:45 Refreshment Break
10:45 - 11:45 Group Table Dialogue: “What are the Issues in
Legalizing Equity CrowdFunding?”
11:45 – 12:00 Program Closes
Welcome Remarks
Michael H. Williams
General Manager, Economic Development & Culture Division
City of Toronto
The Hon. Brad Duguid
Minister of Economic Development & Innovation
Province of Ontario
State of the Nation
Fawn Annan
President, & Group Publisher, IT World Canada
Co-Chair, Invest CrowdFund Canada, Ontario
Technicity Sponsors
Crowfunding a new way to raise
capital in Canada?
http://portal.sliderocket.com/BOPIX/Crowdfund-Investing
What is Invest CrowdFunding?
Crowdfunding is the
solicitation of small equity
investment from non-
accredited investors. Simply
put, it is to raise funding
from the “crowd.”
New online technologies are showing
that public investment for new
companies can be sought safely given
the right platform, precautions and
regulations.
NOT LEGALIZED IN CANADIAN
SECURITIES LAWS
Donation: individuals making a financial contribution to
a project without any expectation of a financial return
on that contribution.
Other CrowdFunding Models
Pre-Order Product:
going on line to help an
entrepreneur to
develop new products
or a service.
• June: Two University of Waterloo alumni come up with
an idea to make a modern wallet
Alex Kennberg, Co-Founder is also here with us
• July-Aug: Sketching, 3D printing, prototyping
• Sept: Launched on Kickstarter
• Oct: Raised $51,000 capital in pre-orders
• Nov-Dec: Manufacturing &
shipping the final product
Source: Crowdsourcing.org
Global Market is growing at 300%+
Research from May 2012 indicates that a combined total
of $1.2 B in equity and non-equity crowdfunding was
raised in 2011 globally.
Equity-based
crowdfunding is
happening most in
Australia and the UK
US Jobs Act in Progress ….
The USA passed the Jump-Start Our Business Startups
Act, making equity-based crowdfunding legal.
a business can raise up to $1M per 12 month period
from both accredited investors over the internet or
through F&F.
Awaiting SEC regulations
The Australian Small Scale Offerings Board (ASSOB):
� 176 Pitches Funded
� Funds Raised A$125M
� 46 businesses for an average A$350K each (2011)
Australia a ICF Market Leader
Compelling Reasons for Change
• Business Plans are rejected 98% of the time
by VCs
• Less than 1% of overall VC capital goes to
women
• 65% of net new jobs driven by start –ups!
We can learn from other countries simply doing it!
““““The Success of Equity
Crowdfunding in the UK””””
Darren Westlake,
CEO, Crowdcube, UK
Darren Westlake
Technicity 2012
• UK (and Canada!) has lots of great ideas
• Need to cultivate ideas into the next
Google/Twitter/GroupOn
• Often stifled by access to
The Status Quo
A wealth of entrepreneurial talent
Money
• Venture capital difficult to find for smaller
requirements
• Debt finance hard to come by
• Business angels – limited investments
• Typically a syndicate each investing £10k - £100k
• What if there was a way to have say 5000 angels
each investing £10?
• What if anyone could become a business angel?
The Status Quo
The Status Quo
Crowdcube and Crowdfunding
• Crowdcube provides a web-based central hub for entrepreneurs to meet
micro-investors. It uses the power of Crowdfunding to provide a unique
service to two types of people:
• for entrepreneurs to source funding more accessibly than
conventional routes
• for smaller investors to have the opportunity to invest in exciting high-
potential businesses
What is Crowdcube?
“$100 invested in Microsoft at their IPO would now be worth approximately $35k.”
Crowdfunding
Crowdfunding
• Crowdfunding is an approach to raising the capital required for a new
project or enterprise by appealing to large numbers of ordinary people for
small donations
• Social Media
• Crowdfunding examples
• Kiva.org - $325m funding raised, >777,000 lenders, ~800,000
entrepreneurs
• Kickstarter.com – >24,000 projects funded, > $250m pledged to-date,
2m people have pledged
Crowdfunding
How it works
How it works
How it works
Benefits
Benefits
Success so far…
£4.2 millionfunded so far…
£100,000largest single investment
>25,000members
Deals successfully funded
31£1 million
biggest deal
Business model
£1,800av. investment
European Crowdfunding Landscape
• Prospectus Rule (European Directive)
• Financial promotions
• Public company limitations – offer of shares to the
public
European Regulatory Challenges
European Regulatory Challenges
• Anyone can invest with relatively low barriers
• Mixture of HNW & crowd
• Low investment level
• Allow wide promotion via online or offline
• Low/no imposed minimum document standards
• Convenient, secure payment method
• Authorisation required for crowdfunding platforms
Lessons learned
Ideal environment for crowdfunding success
www.crowdcube.com
Thanks
““““Should ICF be legalized
in Ontario?””””
… A few remarks….
Moderator: Dr. Cindy Gordon
National Chair Invest CrowdFund Canada;
CEO, Helix Commerce International and
Co–Founder, SalesChoice
Founder, CrowdfundChoice.ca
Co-Founder, Angel Fund
Economic Challenges• World Economic Forum Report – Canada drops 2
more innovation rankings (2012)
• Fund size compression risks increasing
• Fund managers investing> $1M declining sharply
• Capital gap (e.g. US) continues to widen
• Limited VC Funding (capital sources down by nearly
60% since 2001)
• Relocations increasing
Panel Tickler
NA Start-Ups find it difficult to raise money during the
initial stage of their business, where only accredited
investors or institutional investors, represent 1% of the
NA population.
What might be possible if more of the
crowd had the option to participate?
““““Should Invest Crowdfunding be
legalized in Ontario?””””
Adam Spence
Social Impact
Investing
Darren
Westlake
UK Experience
Brain Koscak
Securities &
Legal
Dr. Richard
Reiner
Entrepreneur
& Angel
Peter Aceto
Social Banking
Group Table Dialogue:
”What are the issues in legalizing
equity crowdfunding?”
Brian Koscak
Chair of the Market Exemption Dealers Association,
Partner, Cassels Brock & Blackwell LLP
Table Discussion Process
• Facilitator/Recorder at each table
• 5 min - 1 sentence Introductions
• 3 Questions /Table as per instructions at tables
• 20 min Table Round Up Dialogue
• 5 min Summary Remarks – Brian Koscak
• Facilitator/Recorder email notes to
Our FacilitatorsHadi Aladdin Co-founder & President, CoursePeer ,Inc
Marwan Aladdin Co-founder & Executive Vice-President, CoursePeer, Inc
Asier Ania, Co-founder HiveWire
Rob Berry, Manager Sector & Strategic Relationships, City of Toronto
Heather Campbell, Founder, BasicallyIT
Debra Chandra Managing Director, Launch120
Christopher Charlesworth, Co-founder HiveWire
Karen Dubeau, Vice President, Newmarket Chamber of Commerce
Gerry Gabon Founder & President, Revenue Confidence
Dennis Hitchmough Regional Project Manager, ICTC
Arik Kalininsky Vice President Information Technology, Willson International Limited
Our FacilitatorsAlex Kennberg, Founder, COBRA Wallet
Layan Kutob Student, University of Toronto
Jim Love CIO, IT World Canada
David Ma Partner, Blaney McMurtry
Ian MacNair Principal, CFO Centre
Mary-Ann Massad CEO and Managing Partner, Knowsys Group of Companies
Joe Mazzei, Senior Advisor, ICT Sector Development,City of Toronto
Joseph Orozco Adjunct Professor/Hatchery Director, University of Toronto
Lauren Schneider, Media Relations Officer, Ryerson University
Norman Schutz Co-Founder, Practical Resolutions Inc
Hereve Seguin Chief Financial Officer, Seawell Networks Inc.
Andrew Weir, Manager, Helix Commerce International Inc.
Nicole Whittle VP Strategic Planning & Marketing Communications, HHI Healthcare Solutions
Allan Wilson President, Allan Wilson and Associates
Closing Remarks
SMEs are Toronto’’’’s Growth Engine
• Ranked #1 Growth Area in Ontario
• 50 % GDP and 55 % of jobs
• Sustains the economic dev of many regions
Yet, 25 % of SMEs stop their activities within
2 years; 50% within 5 years of being founded.
More capital is required in order for startups to build scale
and grow revenues significantly.
Going Forward – Our Reality
• Securities are regulated at the provincial
and territorial level.
•Canada’s 13 regulators co-ordinate their
efforts through the Canadian Securities
Administrators.
• Efforts to legalize equity crowdfunding will have
to happen at the provincial level.
Top Attractors to ICF
1.) Access to Capital
2.) Entrepreneurship
3.) Innovation
4.) Jobs
5.) Access to Investment Opportunities
Source: CfPA, 2011 Report
Top Worries to ICF
1.) Fraud
2.) Business Failure(on inability to execute)
3.) Info overload from portals + platforms
4.) Poor Investor Education
5.) Poor Entrepreneur Education
Source: CfPA, 2011 Report
How you can stay in touch?
National Association: CfPA – Invest CrowdFund Canada
Site: www.icanada.nu
Learning Aids: http://icanada.nu/crowdfunding/learning-center/
Get Involved: http://icanada.nu/crowdfunding/get-involved/
National Petition: http://icanada.nu/crowdfunding/petition/
Twitter: @iCANCrowdfund
CfPA/ICC Research
CfPA- Invest Crowdfund Canada Leadership TeamVolunteers Needed
VC LiaisonMichael Turner
National ChairDr Cindy Gordon
British ColumbiaMike Volkier, VP
Joy Van Hove, VP
AlbertaSandi Gilbert, VPJR Richardson, VP
QuebecDiana Yazidjian, VP
OntarioFawn Annan, VP
Randee Pavalow, VP
LegalAndrea Johnson, VP
Brian Monrad, VP
Crowdfunding Industry LeadKerry Liu, VP
PMO LiaisonRuss Roberts, VP
The INVEST CROWDFUND CANADA (ICC): brings key
stakeholders together across the country
to legalize & educate the value of equity
crowdfunding on behalf of i-Canada
(CATA) & CfPA.
Mission
Communication/Media/PRAndrew Weir, VP
US Jobs Act - AdvisorSherwood Neiss, VP
MarketingDebra Chanda, VP
Metrics/FrameworksMichi Kimori, VP
New BrunswickGary Stairs, VP
Impact InvestingPrerna Chandak, VP
Adam Spence, VP
Australia, ASSOB - AdvisorPaul Niederer, VP
National Leadership Provincial Leadership
Industry Leadership
PRMaricel Dicion, VP
CATA - AdvisorBarry Gander
CATA - AdvisorJohn Reid
Start-up AdvocacyMichael Cayley
Chamber of Commerce /
Board of Trade Liaison
Jordan Dedier
Angel LiaisonBrad Ross
Advisors
Note: Each Province has a team
mobilized to work their regional activities.
Corporate SecretaryJessica Rose
Board of Trade Liaison
Eva Majernikova
SaskatchewanLarry Hiles, VPTyler Taylor, VP
UK- AdvisorDarren Westlake
Upcoming Crowdfunding Events
February CfPA/ICC - Crowdfunding Solution Provider Jam I
April CfPA/ICC - Crowdfunding Solution Provider Jam II
June 19th The National Crowdfunding Conference– An Overall Look at the Current Crowdfunding Marketplace
– Current Market Dynamics: Deal Structures & Funding Portals
– Identify and Mitigate Fraud using Data and Analysis
– Political Campaigns & Non-profit Ventures
– Marketing Your Pitch: Techniques for Communicating with the Crowd
– A Discussion of Equity-based Securities, Debt Instruments, Profit and
Revenue Sharing, Donations and Pledges
– Intellectual Property: Understanding Copyrights and Patents
– Laws Based on Global Jurisdiction: Onshore vs. Offshore Transactions
– Concerns Relating to Unaccredited Investors
Sept CfPA/ICC Conference: Sept,17th & 18th
Interested In volunteering, let us know.
Technicity Sponsors
Thank You for Your Participation