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

andrew@helixcommerce.com

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