Invest CrowdFunding (ICF) - Technicity What is Invest CrowdFunding? Crowdfunding is the solicitation

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Transcript of Invest CrowdFunding (ICF) - Technicity What is Invest CrowdFunding? Crowdfunding is the solicitation

  • 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 million funded so far…

    £100,000 largest single investment

    >25,000 members

    Deals successfully funded

    31 £1 million

    biggest deal

    Business model

    £1,800 av. 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