Crowdfunding Professional Association Partners with Invest Crowdfund Canada

Crowdfunding provides Canadian entrepreneurs with new alternatives for financing. Equity or Debt financing in Canada via crowdfunding portals is currently not accessible to Canadians.

With the results from the World Economic Forum Report, Canada’s recent drop of two innovation rankings to 14th place further demonstrates Canada is not taking full advantage of its strong economic fundamentals.

We are integrating our ICC operation with CfPA to further strengthen our national lobbying efforts coast to coast. This also allows us to bring a National Crowdfunding Association to Canadians, and help us develop skills, competencies, best practices, and grow a new innovation cluster for Canadians. Membership for all Canadians to CfPA is free at this time, says Dr. Cindy Gordon, National Chair, ICC, Co-Founder, SalesChoice, Board Director, CATA.

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Silicon Valley Debates the Do’s and Don’ts of Equity Crowdfunding

pile-of-cashYour Facebook friends would love an “Attaboy” from you when they post about their new jobs, or an “Awwww” when they share a puppy picture.

But what will you do when they offer you shares in their startup company?

That expansion of social media is on its way, as soon as securities regulators finish the rules for a new way to float private stock issues—equity crowdfunding.

Congress, by passing the JOBS (Jumpstart Our Business Startups) Act in March, created a number of alternatives to the traditional IPO, or initial public offering, for company financing. One of them will allow entrepreneurs to raise up to a million dollars a year by selling shares in their startups to hundreds or thousands of people they’ll reach through websites and social media networks.

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Survey Shows Many Small Business Are Not Aware Of Crowdfunding

At a time when small businesses cannot find capital, it’s hard to believe that small businesses do not know where to look to raise funds. Credit agency Experian discovered that more than two-third of small businesses surveyed by Experian are unaware of crowdfunding.

Experian surveyed 300 small and medium enterprises (SME) and found that awareness of different types of business finance is very low among SMEs, with most continuing to rely on traditional bank overdrafts or personal sources of cash for additional funding. Alternative sources of finance are yet to have made a significant impact.  ”Of the various forms of business funding options, crowd-funding was the least well-known among respondents, with 69 per cent never having heard of it,” Experian reported. “Meanwhile, angel investment, business cash advances and government grants also scored poorly in terms of awareness.”

When questioned about the first thing they do when thinking about additional financing, the respondents disclosed:

  • 42 per cent of them would go to their personal bank.
  • One in ten said they would try all the major banks first.
  • Seven per cent said they would search the internet for the best deals.
  • Six per cent said they would speak to a broker.

The findings also reveal that 60 per cent of respondents had sought some form of extra funding in the last 12 months and the need to alleviate short-term cash flow problems was by far the biggest reason for applying for extra cash (58 per cent). This outstripped activities for growth, such as expanding their product portfolio (20 per cent) or hiring more staff (12 per cent).

Experian also found that only one in four (27 per cent) SMEs definitely planned to apply for some form of extra funding in the coming year.

Image (c) by Crestock

An Interview with David Drake on the Future of Crowdfunding

Crowdfund Insider: You’ve been involved in crowdfunding for quite a while now and were instrumental in the creation of some extremely influential groups. What brought you in?

David Drake: LDJ Capital invested in a conference series called The Soho Loft early summer 2011 (from the name of the Loft I had entertained to clients and customers in Soho for the first 10 years of the 21st century). We were hoping to invite our family office clients and limited partners. The Private Company Marketplace focus with Facebook transactions, broker dealers and institutional investors did not match well with the focused events family offices and LPs sought. We quickly adjusted and before I knew it 6 sub-congressional witnesses and today friends spoke 1-3 times per month for us on the 6 bills underlying the JOBS Act. Suddenly I am lobbying congress and the bills pass. The entrepreneurial spirit came together as I created the first crowd funding panels during our events and I got to meet all the crowd funding leaders nationwide. There was no other conference bringing together all the crowd fund platforms monthly in 2011. We were it globally.

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SEC Offers Forum on Small Business Capital Formation

Washington, D.C., Sept. 20, 2012 – The Securities and Exchange Commission will hold its annual SEC Government-Business Forum on Small Business Capital Formation on November 15 at its Washington, D.C. headquarters.

This year’s forum will begin with panel discussions on the implementation of the recently enacted Jumpstart Our Business Startups Act, or JOBS Act, and on small business capital formation issues not addressed by the JOBS Act. During the afternoon, participants will work in groups to formulate specific policy recommendations.

The forum begins at 9 a.m. ET with the panel discussions, which will be webcast live on the SEC’s website. The afternoon breakout group sessions will be open to the public and accessible by teleconference, but will not be webcast. Anyone wishing to participate in a breakout group, either in person or by teleconference, must register online by November 12.

The names of panel participants and the full agenda for the forum will be announced at a later date and posted on the SEC’s website. Members of the public are invited to make suggestions for recommendations or topics to be discussed at the forum. These suggestions, and any questions about the forum, should be e-mailed to the SEC’s Office of Small Business Policy at SmallBusiness@sec.gov. For more information, call (202) 551-3460.

Crowdfunding Stifled at Home, Expands Overseas

Crowdfunding Stifled at Home, Expands Overseas image CrowdWatch banner

Crowdfunding, which pools small donations from large amounts of investors, continues to make large, sweeping global inroads. From a donation site supporting the arts to a value-for-value trade to a platform that investors use to find a return on their investment, crowdfunding is becoming a highly sophisticated and radical game-changer. But as it moves towards a business model that attracts more traditional investors, risk also increases.

In the United States, however, there has been some foot dragging when it comes to the specific rules governing certain types of crowdfunding. The Jumpstart Our Business Startups Act of 2012 gives the Securities and Exchange Comission until next year at the earliest (does it really need to take that long?) to establish those rules. Rather than speed up this ridiculous bureaucratic timetable during the most trying economic times since the Great Depression, the SEC has muddied the process by disputing who qualifies as an “accredited investor.”

At the end of August, the North American Securities Administrators Association identified “Crowdfunding and Internet Offers” as a top emerging investor threat.