B6 G T H E G LO B E A N D M A I L • T H U R S DAY , O C T O B E R 1 9 , 2 0 1 7• REPORT ON BUSINESS

SMALL BUSINESS WEEK

By the time David Woodwardshipped the finished products

to more than 600 financial backersaround the world, some had al-ready forgotten about the self-wa-tering planters they had supportedfour years ago through Kickstarter’sonline crowdfunding platform.

“But they were happy to hearthat they were finally going to getthe product,” says Mr. Woodward,president of Vancouver-based PatchPlanters Ltd., which he took overlast year after a chance meetingwith the creator of the originalproduct.

“Of course, there were also a lotof very upset people, includingsome who thought the whole thingwas a scam, so we made sure theyunderstood that we really do havethe product and that we weresending it to them,” he said.

Until this year, Patch Planterswas among the thousands ofcrowdfunding campaigns that meetor exceed their funding goals butfail to deliver the rewards prom-ised to their backers. While thereare no aggregate statistics for thecrowdfunding industry, a 2013study by a professor at the Whar-ton School of the University ofPennsylvania found that close to 10per cent of Kickstarter projects didnot fulfill their obligations to back-ers.

In many cases, failure to deliverwithin the timeline set out duringthe campaign may simply mean adelay in manufacturing or ship-ping. But in other instances, theabsence of a finished productmeans the project – and the com-pany behind it – is dead, dead,dead.

“Most crowdfunding creators aregood people who want to providethe best product and experience totheir backers,” says Leigh Lepore,chief executive officer and founderof Crowdfunding Strategy and In-formation, a crowdfunding market-ing and consulting firm in Denver,Colo. “But sometimes they run intoissues with technology and design,and some even end up having togo back and re-create their prod-uct’s design.”

Poor planning and lack of knowl-edge about manufacturing andorder fulfillment are among thecommon causes of project delaysor failure, says Julio Terra, directorof technology and design at NewYork-based Kickstarter PBC.

“Creators have amazing inten-tions but don’t always necessarilyknow yet how to design for manu-facturing, or how to properly oraccurately estimate how muchtheir product will actually cost tomake,” he says. “The world ofmanufacturing is so complex thatthey might not know how to

engage a factory, and to determineimportant details like what is theminimum number of units theyneed to produce to break even.”

So where does this leave backersand their money? Nowhere, for themost part. Unless the campaigncreator decides to refund theirmoney – which happens onlyabout 15 per cent of the time,according to the Wharton Schoolstudy – most backers are left withnothing and have little or norecourse for getting a refund.

Media reports have highlighted afew product-launch failures thatwere either investigated by legalauthorities or that faced lawsuitsby backers. But these occurrencesaren’t common, says Mr. Terra.

In recent years, a number ofcrowdfunding platforms have putin place measures designed to pro-tect backers. For example, bothKickstarter and San Francisco-basedIndiegogo Inc. have “trust and safe-ty” teams that monitor campaignsfor fraudulent activities or behav-iours that violate service agree-ments.

Within the past year, Indiegogointroduced two policies to helpkeep campaign creators accounta-

ble to their backers. The first is arequirement that creators updatetheir backers every 30 days on theprogress of their project. The sec-ond gives Indiegogo the right tobring in a third-party collectionagency to reclaim funding fromcampaign creators who violate theplatform’s service agreement.

“Ultimately, this is all about Indi-egogo ensuring that everyone onthe platform has a rewarding andhigh-quality experience,” says Indi-egogo CEO David Mandelbrot. “Thisis why we work so hard to strikethat important balance betweenhelping entrepreneurs and protec-ting backers.”

Another crowdfunding platform,GoFundMe, which specializes incharitable fundraising, now pro-vides donors with a money-backguarantee of up to $1,000 (U.S.)per campaign in seven countries –including Canada and the UnitedStates – in cases where the fundswere not delivered to the benefici-aries named in the campaign, orwhere a campaign is intentionallymisleading or misrepresented.

Kickstarter and Indiegogo havealso added resources to improvecreators’ chances of delivering their

products. Both offer programs thatconnect creators to experts in areassuch as product development,manufacturing, logistics and mar-keting. Both sites also have reposi-tories of articles, Q&As and othereducational materials useful toentrepreneurs.

But even with all this support,many campaign creators will strug-gle – and fail. Ms. Lepore says it’simportant to have a communica-tion strategy throughout the cam-paign life cycle, and to keep talkingto backers even when things gowrong.

“You need to be candid andtransparent, and if there is a prob-lem, you need to acknowledge it,”she says. “Even when there isn’tany new information to sharebecause you’re still looking for asolution, it’s important to let yourbackers know that you are lookinginto the problem and that you willget back to them shortly with anupdate.”

But what if there’s no viablesolution in sight and the creatorsdecide to abandon the project?

“It might help ease backers’ frus-tration if you write out specificallyhow their funds were used,” sug-

gests Ms. Lepore. “People will knowyou did try – you had a plan andyou implemented what you set outto do, but you ran into insur-mountable challenges.”

Mr. Woodward says creators needto be realistic with their plans inthe first place. Entrepreneurs areoften too optimistic and, conse-quently, some will set out unreal-istic timelines for their project. “Asa business owner, you should con-sider that not everything will go asplanned,” he says. “Build in a bitmore time into your timeline.”

Mr. Terra at Kickstarter suggestsadding two or three months to acampaign’s delivery schedule. “Ifall goes well you’ll end up deliver-ing the product early,” he says.

For creators who fail to deliveron one project, Ms. Lepore offersone additional piece of advice:Don’t let this be the end.

“Failing in one campaign doesn’tmean you can’t do another one inthe future,” she says. “And if youtreated your backers respectfullyand communicated with themopenly, they might even supportyou in your next campaign.”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special to The Globe and Mail

When crowdfunding dreams dieEach year, thousands of campaigns meet their funding goals but fail to deliver the goods. What happens next?

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MARJO JOHNE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David Woodward is president of Patch Planters Ltd., which recently made good on its four-year-old Kickstarter campaign. DARRYL DYCK/THE GLOBE AND MAIL

It was exciting for John Oldman tostart his own business while in

his 20s; selling it nearly seven yearslater proved a bit more complicat-ed.

“Over all, I would characterizeselling it as a positive experience,but my calculations were all off asto how I thought it would go,” saysMr. Oldman, 36. Now a Toronto resi-dent, he founded and ran a Whitby,Ont., water treatment companycalled AquaLibrium Water Technol-ogies Ltd. from 2007 to 2014.

“When I started it, I was finishingmy MBA and working for someoneelse. I wanted to do somethingentrepreneurial. I went to my for-mer boss and we reached a dealwhere he took 10-per-cent equity inthe new company and also becamea supplier,” explains Mr. Oldman.

AquaLibrium grew to a companywith several million dollars inannual revenue and some 30employees. Toward the end of sixyears, Mr. Oldman decided it wastime for a change.

“I got tired of having a minoritypartner. I approached my partnerabout taking sole ownership, but itbecame obvious he would neversell and actually wanted to buy meout, so I sold my 90 per cent of thecompany to him,” he says.

That’s where Mr. Oldman’s busi-ness transition took a few twistsand turns.

The first complications arosewhen he and his soon-to-be ex-part-ner sat down to hammer out a val-uation for AquaLibrium.

Often, when a private business issold, the seller hires a broker, whocomes up with a value and repre-sents the vendor in the negotia-tions. “I didn’t have a broker – most

of the negotiating was between thebuyer and me,” Mr. Oldman says.

In the negotiations, the chief ex-ecutive officer for the purchaserbrought in people to valuate Mr.Oldman’s company and he didn’tagree with their assessment. “Theywere disruptive. Our talks brokedown a number of times,” he says.

Eric Gilboord, who is a business

transition broker and advisor,laughs sympathetically when hehears Mr. Oldman’s observation.

“I tell businesses that I work withthat it’s really important for themto find the right buyer,” says Mr.Gilboord, who has his own market-ing services company called WarrenBusiness Development Center Inc.and has released a new book on

transitions called Moving Forward:Get the Triple Effect.

In Mr. Oldman’s case, once thetwo partners were able to agree ona price, the sale did eventually pro-ceed. The company is now run by alarger water treatment company,which was the original 10-per-centpartner.

Yet while the new firm turned outto have the expertise and resourcesto bring the Whitby company underits wing with success, the transitionstill proved difficult for Mr. Oldmanat times.

He agreed to a “workout” – hewould stay for three years after thesale to help smooth the transitionfor AquaLibrium’s employees andcustomers. “I felt that I owed thema legacy – at least I thought so atthe time,” he says.

One of the problems was thatwhile he agreed to stay, some ofAquaLibrium’s employees decidedto leave. Mr. Oldman had to remainloyal under the terms of his three-year agreement.

He also found it difficult to movefrom a position of leadership tosimply being a member of the newcompany’s management team, withless authority.

“I had a hard time adjusting tothat. The new parent company hada lot of changes they wanted tomake, and it was tough not havingmy voice heard all the time. It wasespecially hard in board meetingswhere I was no longer the leader,”Mr. Oldman says.

“My advice is that if you have atransition, don’t make it threeyears.”

Mr. Gilboord adds: “That’s thetoughest thing, when you’re downthe hall and you feel they don’twant to listen to you. Some of myclients describe the experience oftheir first year working for newowners as Year One of a three-yearsentence.”

It isn’t always that way, though,he adds: “Some companies go outof their way to make it enjoyablefor the owner to stay on.”

Perhaps one of the most remark-able, yet little known, business tran-sition stories is that of ColonelHarland Sanders, the founder andcreator of Kentucky Fried Chicken,now called KFC.

As KFC grew in the 1960s, Col.Sanders sold the company, thoughhe retained the Canadian opera-tions – he even bought a house inMississauga, Ont. Yet he remainedas spokesman forever, even beyondhis death in 1980 by continuing as acartoon version of himself that thecompany created.

Mr. Oldman had no aspirations ofstaying on as a cartoon for AquaLi-brium.

After the second year of his three-year workout, he renegotiated tocontinue to the end of his term oncontract as an advisor, and theninvested in a new business, studenthousing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special to The Globe and Mail

Sale of water-treatment company not all smooth sailingOwner found it difficult to negotiate the sale and then stay on for an agreed-upon period in a lesser role

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DAVID ISRAELSON. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John Oldman experienced some bumps in the road when he sold hisOntario-based water treatment company. MICHELLE SIU/THE GLOBE AND MAIL

The new parent company

had a lot of changes they

wanted to make, and it was

tough not having my voice

heard all the time.

John OldmanFormer owner of AquaLibriumWater Technologies Ltd., Whitby,Ont.

#1inMarketing.WorldwideMarketing Applications2016Market Share by IDC

Source: IDC Worldwide Semiannual Software Tracker, April 2017. Please note that Marketing Applications refersto an IDC-defined functional market within the broader CRM Applications market.

9.9%

9.8%

8.0%

2015 20162014

#1 inService.

Source: IDC Worldwide Semiannual Software Tracker, April 2017. Please note that Customer Service Applications refersto an IDC-defined functional market within the broader CRM Applications market.

Worldwide Customer Service Applications2016Market Share by IDC

33.7%

13.4%

10.4%

2014 2015 2016

The world’s #1 is also Canada’s #1. According to IDC, Salesforce was also ranked #1 in Canada for CRM Applications,according to 2016 Worldwide Semiannual Software Tracker. See why thousands of Canada’s leading companies are usingSalesforce to connect to their customers in a whole newway. And learn how far we can take you, too. Visit salesforce.ca/1CRM.

Learn more at salesforce.ca/1CRM©2017 salesforce.com, inc. All rights reserved. Salesforce.com is a registered trademark of salesforce.com, inc., as are other names andmarks.

#1inSales.

Source: IDC Worldwide Semiannual Software Tracker, April 2017. Please note that Sales Applications refers to IDC-definedfunctional markets within the broader CRM Applications market.

Worldwide Sales Applications2016Market Share by IDC

34.2%

15.3%14.5%

2012 2013 2014 2015 2016

Grow yourbusinessfaster withSalesforce.Ranked #1in CRM.

T H E G LO B E A N D M A I L • T H U R S DAY , O C T O B E R 1 9 , 2 0 1 7 G B7REPORT ON BUSINESS •

SMALL BUSINESS WEEK

It’s hard to sell a dream, the realestate saying goes. Before shovels

hit the ground and framers starthammering, developers have to per-suade potential buyers to sink hun-dreds of thousands or millions ofdollars into their vision.

But imagine if would-be buyerscould move through a condo thathasn’t yet been built, peer out thewindows at the future view, andchange the countertops and faucetswith the click of a button or thewave of a hand. That’s the dreamMontreal-based Edge Dimension Inc.is trying to sell to builders.

Started five years ago by twofriends in their early 20s, EdgeDimension blends video gamedesign and cutting-edge virtual real-ity technology to create lifelike realestate tours. All that’s needed is aVR headset.

“We’re literally going to removethe need to build a demo house,”said president and chief executiveofficer Guillaume Renaud, who leftuniversity, where he was studying3-D art and video game develop-ment, to start the company.

Traditionally, real estate firmshave relied on artist renderings anddemonstration units to woo custom-ers. It can be hard, though, to con-vey a sense of scale withtwo-dimensional images, and demounits are expensive to build andlimited in the range of colours,flooring types and furnishings theycan display.

Edge Dimension is offering the“ultimate immersive experience”instead, said Mr. Renaud. Users cannavigate a virtual apartment with ajoystick, or even hand gestures,clicking from maple to oak to pinefloors. They can see the home indaylight or at night.

All Edge Dimension needs from adeveloper is the blueprint for thehouse or condo unit and photo-graphs for style references.

When Edge Dimension started, itfocused mainly on 3-D illustration,the static, photorealistic imagescommonly seen on real estate web-sites and in sales offices. Since then,however, the company has staked a

claim in the emerging field of virtualreality marketing.

Jeff Tremblay, head of virtual reali-ty and augmented reality for theFrench digital marketing giant Val-tech, has worked with Edge Dimen-sion on a number of projects.

“There are a few players in Quebecwho have been doing 3-D modellingfor a while,” he said. “But they didn’tjump on the VR/AR bandwagon asfast as Edge did. And that givesEdge, well, an edge.”

Virtual-reality marketing is still in

its infancy, Mr. Tremblay said. But ithas the capacity to shake the mar-keting world to its core, and not justfor real estate.

Why would a car dealership needa 50,000-square-foot showroomwhen it could be just as effective ina 2,000-square-foot “experiencecentre”? “Think about cost savings,think about options. All the optionsyou can use to customize yourhome or your car, they can now besynthesized into a 1,000-square-footroom,” he said.

Edge Dimension has worked withCanadian Tire Corp. Ltd. to build in-teractive apps and Dorel IndustriesInc. to render 3-D images of furni-ture.

From the start, though, the com-pany knew its bread and butterwould be real estate, Mr. Renaudsaid.

“Real estate promoters told us

very early how hard it could be tosell a unit based only on the floorplans.”

Étienne Beaudry, vice-president ofsales for Montreal-based Alda Déve-loppement, worked with EdgeDimension on a virtual tour of itsnewest condo project.

“It differentiates us from the com-petition, and real estate is highlycompetitive, especially in Montrealwhere the market is booming,” saidMr. Beaudry.

“We’re dealing with high-end cli-entele, and right from the start[with the virtual tour] they knowthey’re dealing with a business thatinvests in the experience.”

Edge, which is run by Mr. Renaud,28, and vice-president and co-foun-der Maxime Vignola, 26, is verymuch a product of today’s intercon-nected and flexible digital economy.Of the company’s 25-odd employees,only half are based in Montreal; theothers are scattered around theworld in South America, Europe andthe United States.

“We’re not in the same time zone,so I can work all day and then shipthe files over, and they will workwhile I’m sleeping. So we’re prettymuch like a 24/7 company,” said Mr.Renaud.

Edge’s Montreal-based staff canmeet at its offices there to collabo-rate and socialize. But most of thework happens from home. “We’rebasically the new generation ofentrepreneurs, we’re digitalnomads,” said Mr. Renaud. “All weneed to run the business is a lap-top.”

While Edge Dimension is not theonly Canadian company movingaggressively into VR marketing inreal estate, its focus on blending 3-Dand VR sets it apart.

“While other virtual-reality com-panies would do video shootingwith cameras, if they need to addspecial effects and stuff, they cannotdo it,” said Mr. Renaud.

“Meanwhile, if you call us and youneed a shooting on Mars with acastle and unicorns, we can do that,”he says. “The possibilities are end-less.”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special to The Globe and Mail

Duo’s technology makes users feel right at homeVirtual-reality marketing is still in its infancy, but Edge Dimension’s product has given real estate developers a powerful selling tool

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MARK RENDELL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Edge Dimension users can navigate a virtual home with a joystick or hand gestures, and change the furnishingswith a click. The Montreal-based company is run by Guillaume Renaud, left, and Maxime Vignola.

B8 G T H E G LO B E A N D M A I L • T H U R S DAY , O C T O B E R 1 9 , 2 0 1 7• REPORT ON BUSINESS

REPORT ON SMALL BUSINESS FINANCIAL SNAPSHOT

When their two young nephewsmoved overseas, siblings Josie

Elfassy-Isakow and Ronny Elfassywanted to make sure the boys wouldremember them.

The pair decided to make a per-sonalized book to ship to the boys,one that would help them recognizenot only names but also the faces oftheir far-off family members whenthey flipped through its pages atbedtime. So the brother and sisterprinted their pictures on magnetsdesigned to be used as characters ina story they co-wrote; their proto-type book featured magnetizedpages with designated spaces.

“They loved it,” Josie said of hernephews. “They read it every night.”

Josie and Ronny had a hunch thebook might get traction among oth-er families spread across vast geog-raphies. And the market forpersonalized children’s books wasstarting to boom; their photo-mag-net concept, which allowed buyersto personalize their magnetsthrough a website, was novel. For-merly business partners in a photo-booth venture that produced mag-nets, the pair decided to go intobusiness together once more.

They launched their Toronto-based venture, MagneTree Books, inthe spring of 2015 with the help of aKickstarter campaign for presales oftheir inaugural book.

Neither Josie, who was at the endof a maternity leave, nor Ronny,who worked for a humanitarian aidorganization, had much savings tofund their startup or the first run ofbooks, which together rang in atmore than $65,000. A bank loanwasn’t an option; neither entrepre-neur was in a position to cover thedebt if something went awry.

Their first year was rough: TheKickstarter campaign demandedmore attention than either hadplanned, and creating a website andfinding suppliers ate up time andcash.

The biggest speed bump camewhen their first shipment of booksarrived: all 1,000 were defective(their spines split when opened).The supplier agreed to ship a newround.

Meanwhile, the pair began attend-ing trade shows. While both endedup quitting their jobs to focus onMagneTree full time, both havesince had to take new jobs to makeends meet, including driving forUber.

Online sales have been slow – just15 per cent of their books are sold onthe web. But corporate gifting andwholesaling has proven fertile. Still,the company has yet to break even.Profit on a run of books rings up atabout $7,000.

They are determined to build theirbusiness, but they are concernedabout its viability and taking theright next steps. The partners have,for now, narrowed their focus towholesale and retail sales (onlineadvertising did not translate intosales gains).

Having had promising meetingswith a large national bookseller, thepair is prepping to order a new runof books and launch a new storythat will expand their offering. Their

goal is to have a broad lineup of per-sonalized, magnetized readers thatwill help build their company name.

But they have a big problem: nocash to fund the second book’s pro-

duction and marketing. Neither sib-ling is able to personally lend thecompany money, and they havebegun crowdfunding once more.

We asked Andrew Zakharia, achartered accountant and founderof Toronto-based AZ AccountingFirm, about MagneTree’s path for-ward.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Expert advice

Mr. Zakharia notes that the amountof money the siblings need to fundtheir second book is relatively smallat between $7,000 and $10,000. Still,their inability to make a personalloan or secure a bank loan will makethem unattractive to traditional len-ders. “Banks are going to be veryconservative,” Mr. Zakharia said.

One option the pair might consid-er is Lending Loop, a peer-to-peerlending marketplace that might betheir fastest route to raising cash.“Because it’s such a small amount, Ithink it would be pretty easy toraise,” he said.

Even better, he said, would be totake on an investor. “They needsomeone to help them who hasbusiness knowledge, capital and cantalk strategy with them, maybemake some introductions and helpthem move things along muchquicker than them doing it them-selves,” Mr. Zakharia said.

Most small businesses he dealswith are posting profits by theirthird year. “The same timelineapplies to almost every business Iwork with. Within five years they arewell off with well over $1-million insales,” he said. Three years in, Josieand Ronny “should be further aheadthan they are.”

Partnering with an investor wouldmean giving up ownership shares ofthe company. But “the investor is

going to add advice, strategy andcontacts. Sure, the investor is goingto want something.”

Say an investor asks for 20 percent of the company. “It’s better toown 80 per cent of a million-dollarpie than it is to own 100 per cent ofthe small pie they’re working withright now.”

To get the bigger pie, though, Mag-neTree has to pick up the pace, Mr.Zakharia said. Finding the rightinvestor – one who will be contentwith smallish profits for now –would help solve their slow growthand fill gaps in the brother and sis-ter’s professional expertise.

Doing it could safeguard thefuture of their company, which isbuilt on a product with lots ofpotential but is arriving in the mar-ket much too slowly. It is in dangerof being cannibalized by a better-po-sitioned competitor. “Someone elseis going to come along and do thesame thing, or something similar,and they’ll move much quicker,” Mr.Zakharia said. “Then they’ll reallyhave no opportunity.”

In the meantime, MagneTreeshould incorporate, Mr. Zakhariasaid. The fee is relatively small($200 in Ontario), and doing so willhelp the company start to build apublic track record that will be notonly useful but will also be neces-sary to secure future loans and cred-it.

Each founding partner, Mr. Zakha-ria said, should also think aboutputting aside six months’ worth ofpersonal savings to live on. In theevent the duo does get the big orderthey’re dreaming of from a largeretailer, one or both partners mayneed to devote their full-time atten-tion to filling it.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special to The Globe and Mail

When Kickstarter isn’t enoughBrother and sister entrepreneurs launched their customizable children’s books to help far-off family members keep in touch. But acash shortage has left them struggling. Taking on an outside investor would bring needed money and expertise, an expert advises

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JESSICA LEEDER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ronny Elfassy and his sister Josie Elfassy-Isakow started their business after creating a personalized book for their nephews. J.P. MOCZULSKI/THE GLOBE AND MAIL

The banana may be the most in-expensive fruit in the produce

section, but it shouldn’t be, says Jen-nie Coleman.

“It comes from far away, it’sextremely sensitive, and if the tem-perature goes up or down, it damag-es the fruit very quickly,” says Ms.Coleman, who is president of Equi-fruit Inc., an importer based in Mon-treal. “And yet, it’s such a cheapfruit.”

According to Statistics Canada, theaverage cost of bananas is about$1.55 per kilogram, or 70 cents apound. That’s cheaper than apples,oranges, carrots and potatoes.

But those rock-bottom prices canmean the workers who grow themare exploited, says Ms. Coleman.Over the past two decades, docu-mentaries and exposés by HumanRights Watch and other groups haverevealed child labour, poor workconditions and union-busting on ba-nana plantations.

That’s why Ms. Coleman’s com-pany imports only bananas that car-ry the Fairtrade logo, which helpsguarantee farmers a fair price anddecent working conditions. So far,Equifruit sells to retailers in Quebecand Ontario.

The company’s socially consciousfruits look the same as other banan-as, but they are about 50 per centmore expensive, Ms. Coleman says.“So you have to build a consumerbase that is educated about why

they should spend a little bit moremoney on their banana.”

Ms. Coleman bought the businessin 2013 from its founders. She wasdrawn to the venture because shehas a background in both businessand social activism. “Equifruit waslike a callback to my social-justiceroots from when I was a youngerperson, but with the pragmatism ofa career in business,” she says.

Equifruit works with co-operativesof small producers in Peru, Ecuadorand Mexico which have been certi-fied Fairtrade. For bananas to carrythe Fairtrade mark, producers mustbe small farmer organizations orplantations that meet social, eco-nomic and environmental standardsand protect workers’ rights and the

environment. Importers must paythe Fairtrade minimum price as wellas an additional premium for theproducer to invest in business orcommunity projects.

“Health and safety is really at theforefront,” says Ms. Coleman. “Areworkers suitably protected in theirjobs? Fair wages must be paid, notjust to the small producer that weare transacting with, but the work-ers who are working for him.”

Her company finds producers on aFairtrade database but also visitsproducers regularly to ensure quali-ty control. “Above all, this has to bea solid commercial relationship,”she says. “You can have all the‘warm and fuzzies’ that you want,but if a container of bad fruit

arrives, you can’t sell that.”Although the Fairtrade organic ba-

nana is, as Ms. Coleman puts it, the“top banana” at Equifruit and con-stitutes nearly 100 per cent of whatthey import, they also bring in Fair-trade conventional bananas and areexploring the possibility of growingthat market, too. (Fairtrade conven-tional bananas can be grown using arestricted list of pesticides to pre-vent disease and pests, while Fair-trade organic bananas are grownwithout chemical pesticides or her-bicides.)

“Even though our first choice is or-ganic, we are also conscious that thebulk of Canadians buy conventionalbananas, and we would love to con-vince a grocery store to switch overtheir conventional bananas to Fair-trade,” says Ms. Coleman. “The vol-ume is much greater, and withvolume comes impact.”

Though many of their customersare independent grocers and health-food stores, Equifruit has been mak-ing headway with chains, too. FarmBoy, an Ontario chain, carries Equi-fruit’s Fairtrade organic bananas,and Sobeys Quebec recentlyswitched to Equifruit – every organicbanana sold there is now an Equi-fruit Fairtrade organic banana.

Francis Bérubé, manager of mer-chandising for Sobeys Quebec, saysthe chain wanted to make a state-ment. “Our customers really like it.It’s an important positioning for us,”he says.

The deal with Sobeys Quebec has

sparked interest from other largeCanadian retailers, says Kim Chack-al, Equifruit sales manager. “We’vehad several meetings with all of themajor companies.”

Ms. Chackal says Equifruit offersretailers “a partnership” in market-ing and communication throughsocial media or by hosting events instores. “Without education, peoplewon’t accept the product and theywon’t go out looking for it.”

The vast majority of the bananasconsumed in Canada are conven-tionally produced; Fairtrade banan-as constitute less than 1 per cent ofthose bought by consumers, saysMs. Coleman.

But the market is ripe for disrup-tion, as consumers are increasinglyseeking to make ethical choices withtheir wallets, she says. “People arewanting to work with companiesthat have good values.”

Though Equifruit is primarily a ba-nana importer, Ms. Coleman says italso has been working on bringingother Fairtrade products into Cana-da.

“We have lots of ideas. For exam-ple, we’ve seen Fairtrade passionfruit. But moving 20 tonnes of Fair-trade passion fruit could be tricky,”she laughs.

Add Ms. Chackal: “We really seethe banana as what’s going to openthe door for change in the producesection, because it’s that fruit thatyou buy every week.”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special to The Globe and Mail

Importer of Fairtrade bananas finds sure footing in CanadaLarge grocery chains have shown interest, though more consumer education will be needed to grow a more substantial market

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SHELLEY WHITE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jennie Coleman imports bananas that carry the Fairtrade logo, which helpsguarantee farmers a fair price and decent working conditions. With her isKim Chackal, Equifruit’s sales manager. CHRISTINNE MUSCHI/THE GLOBE AND MAIL

The duo behind MagneTree need money to move their business forward and helpthem prepare for their next big order.

ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash. . . . . . . . . . . . . . . . . . . . . . . . .

$3,000

Equipment $2,000

Supplies $300

Inventory $23,308

Total assets $28,608

LIABILITIES

Loan from Futurpreneur Canada $12,165

REVENUE (MONTHLY)

Online book sales $342

Wholesale book sales $1,913

Total revenue $2,255

EXPENSES (MONTHLY)

Parts and materials $322

Office supplies/postage/freight $330

Drawings $377

Computer/technology $58

Bank service charges $49

Dues, subscriptions, professional fees $133

Meals, entertainment, travel $297

Advertising and promotion $141

Miscellaneous $131

Total expenses $1,838

CASH SHORTAGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

This content was produced byThe Globe and Mail’s Globe Edge

Content Studio, in consultation withan advertiser. The Globe’s editorial

department was not involvedin its creation.

SPONSOR CONTENT

THURSDAY , OCTOBER 19 , 2017 • THE GLOBE AND MAIL

Building a house would be a rareassignment for any high-schoolstudent, but proved to be a

life-changing experience for at leastone from the Fishing Lake First Nationin Saskatchewan, about 200 kilome-tres east of Saskatoon.Over four weeks this past spring,

a dozen students from the school inFishing Lake were tasked with build-ing a three-bedroom home in theircommunity, in partnership with FirstNation home builder Your ChoiceHomes Inc.“Land-based learning” and experi-

ential projects like this are encouragedand supported by Treaty 4 EducationAlliance Inc. (T4EA), a federally fund-ed educational organization createdin 2009 to serve 12 participating FirstNations within the Treaty 4 Territory.

Lori Whiteman, T4EA s executivedirector and a member of the Stand-ing Buffalo Dakota First Nation, saysone student in particular credits thehome building project for keeping himin school and for his current job in theconstruction trade.

“Had it not been for that project, hewould never have realized the possi-bilities of life outside of his reserve,”Whiteman says. “He was very close todropping out of school. He didn’t seethe value in school. By participating inthat project, he connected with peo-ple in his own community in ways hewould never have [otherwise]. It reallyinspired him and motivated him.”

It’s just one of many success storiesthat have come out of T4EA schools,an innovative program with a mis-sion to improve the education of FirstNations children by focusing on fourareas: student literacy, numeracy, re-tention and community engagement.The program’s key goal is to sup-

port each student to become a “Treaty4 Nation Builder,” where schools offeran education that prioritizes Indige-nous history and culture, balancedwith learning about life outside oftheir community. It’s what Whitemancalls “walking in both worlds.”“This is an exciting and historical

time for First Nations on reserve ed-ucation,” says Whiteman. “It’s muchbigger than just getting students tojump through the hoops of Westerneducation. It’s about creating an edu-cational system that responds to thelongstanding inequities and the ex-periences that First Peoples’ have hadthrough colonization, the residentialschools – all of the issues that have af-fected us over a long period of time.”Whiteman says the program is

about “deinstitutionalizing ‘school’and ‘education’ as structures,” whichshe says were not created for First Na-tions people.“We are re-imagining lifelong learn-

ing through a First Nations lens, andsupporting schools to be creative andcourageous as they plan for studentsuccess,” she says. “We have to be-lieve in ourselves and the incrediblewisdom and sophistication of our an-cestors, who understood deeply whatlearning success was.”The T4EA board of directors in-

cludes representation from each of theparticipating 12 First Nations, whichWhiteman says “inspired and guidedour vision from the start.”

“T4EA was designed so that each

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‘Walking in both worlds’Innovative program helps First Nations students see the value of staying in school

Treaty 4 Education Alliance Inc. is “re-imagining lifelong learning through a First Nations lens,” says program director Lori Whiteman.

First Nation, through their school,could really look at how that schoolcame to be in that nation, what theimportance of it is, and situate thatschool as part of the Treaty and inher-ent rights to education each nationhas,” Whiteman says. “Otherwise weare simply replicating a provincial orwestern model of education.”Setting the context for treaty and

inherent rights to education is at the

centre of what T4EA calls the “Hum-mingbird Literacy Project,” whichWhiteman says reminds staff to thinkcritically and through a lens that en-hances Indigenous knowledge.An example of a Hummingbird-in-

spired project is the ongoing “WhoWe Are, Where We Come From” bookseries, where each First Nation in thealliance worked with renowned Creeartist Michael Lonechild, along with

their teachers, local elders and staff towrite and illustrate a book about thehistory of their First Nation.“When children are reflected in pos-

itive ways in their learning resourcesand environment, they are more like-ly to be engaged and use the pridethey have in their identity as a sourceof strength along their learning path-ways,” says Whiteman.T4EA has also been part of the

“Confident Learners” early literacyprogram, designed in consultationwith a national First Nations advisorypanel to support the successful devel-opment of literacy skills of children inFirst Nations communities.Overall, there are about 180 teach-

ers and more than 1,400 studentsfrom kindergarten to Grade 12 enrolledin T4EA schools this year. More than280 students have graduated fromhigh school since the T4EA programbegan, some of who have gone onto study at trades and post-secondaryschools in other parts of the country.

“A lot of these young people wantto participate in and support their com-munity and help it grow,” Whitemansays.“Even though we are a small orga-

nization with limited funding and ca-pacity, we have remained focused ondeveloping a program that will carryus into the future, which are relevantto communities and to kids, and thatwill give them a solid footing in theirfuture,” Whiteman says.

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