Investment Crowdfund Quebec: Work in Progress
What have we been up to at Invest Crowdfund Quebec? Keeping busy in many ways: putting together nuggets of business intelligence, building our team, engaging our stakeholders, notably the Montreal Securities Commission, the Autorité des marchés financiers (AMF) and speaking Invest Crowdfunding. Our latest event: Montreal New Tech tomorrow, October 2, along side Noah Redler, Start-up Canada. Here’s a preview.
Our Findings and Assumptions
– August and September were a learning curve for us. Collecting best practices from across the globe, Australia, UK and the Netherlands to name a few, where Invest Crowdfunding platforms (ASSOB, Crowdcube, etc..) have been growing at a frenetic pace. Engaging with their respective CEOs and asking them hard questions regarding due diligence, corporate responsibility and fraud prevention
Quebec needs to look at this new model even more so today as our innovation index is falling steadily and businesses are fleeing to outside markets where investment opportunities are more diversified.
We are paying attention to market signals and stakeholders’ issues. Fraud prevention is at the top of the list. Because Invest Crowdfunding (ICF) is not immune to risk and we, as advocates, need to get a comprehensive view of how ICF can work for us in our ecosystem within our legislative jurisdiction.
Experience shows that in other countries where ICF has been operating for years , crowdfunding may be less susceptible to fraud than other investment channels. We believe that the quantity, quality and accessibility of information through social networks will enhance transparency and protection for the investors. In fact, the ICF platforms we’ve engaged with expect from investment-seeking businesses that they provide company statements, forecasts and the like, and that they engage with potential investors through Q&A and chats. Having read some of their material, it’s safe to say that these businesses enter the ICF model prepared for all the tough questions from potential investors (see screen shots).
This said, in this example, Optimum Technologies, a biotechnology company, potential investors asking questions seem well informed, not to say experts.
These “specialized” investors may inquire on patents pending, the governance structure, etc…as seen below.
We envision ICF also designed for “softer” industries, i.e. retail and service. My top pick is Maggie and Rose, a Family Members Club based in Kensington (London) in business for the last 5 years, showing a great track record and who has recruited 14 investors so far. These stories are truly inspirational and I see this as a new haven for SMEs (<100 employees) which represent 95% of the Quebec business landscape.
Building the Team to Lead ICF in Quebec
New developments have seen the day thanks to hard work from the Quebec team and the other provinces. To name one, Tony Arias, VP ICC for British Columbia has launched the Healthy Crowfunder portal and is educating on Equity Crowdfunding in different ways through media and blogging.
Our Quebec team has been actively engaging with the community – start-ups, legal, policymakers, VCs, strategists, Crowdfunding platforms – and meeting with experts across the world. If there’s one thing I’ve learnt through the course of my professional life, it’s the collaborative force of many that drives progress and triggers change.
Our team has expanded and is made up talented, go-getter individuals with the ongoing support of National Chair of Invest Crowdfund Canada, Cindy Gordon, National Legal Advisory, Andrea Johnson, Sherwood Neiss, the instigator of the JOBS Act, for his strategic vision, and Victoria Lennox, founder of StartupCanada who’s been doing a fabulous job on promoting the startup ecosystem across the country.
We believe that every change affecting the economy can only succceed with cohesion. Stakeholder engagement in the conversation is key.
Meeting with our Securities Commission: A step in the right direction
The Autorité des marchés financiers (AMF) is the body mandated by the government of Québec to regulate the province’s financial markets. They met with us to know more about our advocacy group. The AMF team is showing great interest in ICF as they recognize the financing gap widening in Quebec and companies going public on the decline. We are hoping to go further, open the current regulation and move toward an invest crowdfunding exemption.
Putting equity into crowdfunding is from an abstract viewpoint an extraordinary idea, a “why didnt we think of this before?’ idea. But then comes the part where you need to sit down, and think, think hard of the implications, the ins and outs, the “what-if” scenarios and there are plenty. And I must say that meeting with the securities commission was the right trigger. Our prep work made us realize that, albeit the many unknowns, we are missing out on an opportunity for economic growth if we do not pursue this effort.
Bottom line, we believe that every individual should have the opportunity to access capital. Please show your support by e-signing the petition http://icanada.nu/crowdfunding/petition/ . The more signatures we gather for the legalization of Invest Crowdfunding, the more Government will …pay…attention!