Invest Crowdfund Québec

Pour l'adoption d'Invest Crowdfunding au Québec | For the adoption of Invest Crowdfunding in Quebec


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Technicity Event: Ontario Runner-Up for Equity Crowdfunding. Is Quebec Next?


Screen Shot 2012-12-03 at 7.35.35 AMOntario may well be the next adopter of Invest Crowdfunding ahead of the U.S. 

Thursday morning, the Hon. Brad Duguid, Minister of Economic Development and Innovation was the honorary guest at Technicity, the first Equity Crowdfund Conference in Ontario. Min. Duguid spoke about the potential benefits that equity-based crowdfunding provides for entrepreneurs and said once the Ontario Securities Commission completes a review, the provincial government would look at ways to move forward with changes.

Great panel, crowd and organization and more importantly the outcome that I will highlight further. It was also a rare opportunity to meet up with the other shakers of  Invest CrowdFund Canada :  Dr. Cindy Gordon, national Chair of ICC and CEO of Helix Commerce Intl, Fawn Annan VP for Ontario and CEO of IT World Canada, Andrew Weir VP national communications, Debra Chander VP National marketing, and Barry Gander, i-Canada co-Founder. I also had a serendipitous moment, meeting Craig Asano, Executive Director of the National Crowdfunding Association of Canada, with whom I’ve been exchanging emails with for the past weeks and had yet to meet.

A Room Full of Believers in Equity Crowdfunding

The entire Canadian ecosystem was present and the excitement palpable. When Darren Westlake, co-founder of CrowdCube, UK’s Equity crowdfunding platform, took the stand, we had high expectations and were not disappointed. Darren walked us through the process of an equity crowdfunded business, provided key success metrics and gave us a view of what lies ahead for equity CF sites. I tweeted as I listened (see end of post). All provinces needed to catch a glimpse of the lessons learned and the opportunities, and more importantly realize that we all share the same concerns: the need for democratizing investment to close the financial gap and stir innovation.

The keynote was followed by a panel discussion including top influencers from the technology, regulatory, banking and VC sectors: CEO of ING Canada, Peter Aceto ; founder of Stratus Capital and a board director at the Toronto Angel Group, Dr. Richard Reiner; creator of Social Venture Exchange, Adam Spence and Dr. Cindy Gordon, who moderated the event. There was great talk on Ontarian initiatives to boost innovation and Canadian-specific requirements, i.e. tax incentives for equity crowdfunded businesses.

The third highlight of this matinee was the group table dialogue moderated by Chairman of the Exempt Market Dealers Association, Brian Koscak. In short, each table was asked to discuss three questions that were later shared in plenary. Our set of questions: Should issuers be subject to an annual limit on how much they can raise? Should issuers be subject to a minimum and maximum offering threshold? Should securities be limited to equity only or debt and equity?

This session gave way to much discussion and differing opinions. It’s all good. This is how change starts to take place. The value lies not in the “right” answers but in addressing the right questions, having such a large number of interested and engaged professionals.

What is the main motivator for Equity crowdfund investors?

One crucial teaching that I take with me is that equity crowdfund does not belong to one select group but to all. And to confine it to the financial or regulatory sphere is a mistake. Yes, equity CF addresses financial and regulatory concerns, i.e. how much does one invest? How much can one raise?, and for good reason. Yet it also addresses regional/municipal economic growth and innovation rate, i.e. investing in a company for reasons other than financial. Darren nailed it when he said

Financial return is not the main motivator, supporting SMEs is.

Because you may not see a return in VC terms (<5 years) but you will be contributing locally to the long term growth of businesses and job creation. And as Darren mentioned, these SMEs eventually scale and their value increases thus interesting other categories of investors. It’s a win-win.

Why accelerate the adoption of Equity Crowdfunding in Quebec?

First and foremost, start-ups are leaving Quebec for better (financial) conditions. Love money and bootstrapping are NOT accessible to every entrepreneur. Some keep their day jobs and work nights to make their great idea actionable but with a lot of collateral damage. Those that do succeed with some help of their close circles need more funding to scale and acquire new clients. Yet VCs and Angels can only fund so many start-ups in early or later stage. This leaves quite a large crowd of entrepreneurs who more often than not, call it quits (50% of SMEs have a lifespan of 5 years).

Then I ask you. How can Invest/Equity Crowdfunding not be part of the public agenda? As Ontario, this should become a concern for all: the Prime Minister, the Ministry of development and innovation, the Ministry of small business, corporations, SMEs, start-ups, VCs, angels, business associations, exempt market dealers, regulatory agencies, strategists, social media experts, IT experts, securities lawyers, academia, individual investors, Julie, John, Mr and Mrs Smith, and the generations to come.

Why wait-n-see, especially when the market is clearly sending out signals that Equity CF works? Naysayers may respond “sure, it works in Australia or UK, but it isn’t going to work here.”, “It’s going to kill our VCs” or “No one knows what Invest CF is,  let’s wait it out”. I am a partisan of dialogue among stakeholders and I believe that in lieu of making assumptions amongst ourselves, we should create an open public arena. Our blog is one those places and we welcome your questions, concerns, suggestions. Last Monday’s short talk at Crowdfund Night was yet another opportunity and people came up to me with more questions. Yes, the interest is there and we must cultivate it.

Seemingly, Ontario is next up to adopt Invest Crowdfunding, and other provinces will follow suit. We do not want to see our country divided, hence running the risk of losing our Quebec entrepreneurs to other regions, where more diversified financing mechanisms will be in place sooner than later.

If you would like to accelerate the adoption of crowdfund Investing, we welcome the addition of your strengths to our cause. Contact us. Many thanks.

 

Twitter Feed @Technicity:

29 Nov ‏@Yazziness #technicity Government should propose tax incentive to #Crowdfundinvestors as in UK. Agreed.
29 Nov@Yazziness #technicity Banks will see invest #crowdfunding as a wonderful opportunity, to meet entrepreneurs early on in their life cycle – Peter Aceto
29 NovBrian Jackson ‏@brianjjackson Darren saw a supply/demand problem in the UK of too many businesses looking for capital, not enough angels. Sounds familiar#technicity Retweeted by Diana
29 Nov@Yazziness @TechnicityTO how banks can get involved in invest #crowdfundingPeter Aceto @ingdirect speaking
29 Nov ‏@Yazziness #technicity shares b for crowd, shares a for accredited.@Crowdcube
29 Nov ‏@Yazziness #technicity Little due diligence. ID checks and money-laundering checks done for every business @crowdcheck29
29 Nov ‏@Yazziness#technicity @Crowdcube crowd funded their business. 300k pounds raised. 160 investors
29 Nov@Yazziness#technicity average investment 1800 pounds. 31 successful deals in 18 months. Total funds raised 4.2 m pounds #crowdcube
29 Nov‏@Yazziness #technicity Investor survey: financial return is not the main motivator for invest #crowdfunding. Supporting SMEs is. – Crowdcube CEO
29 Nov@Yazzines#technicity Strong vetting process @crowdcube – 25% acceptance rate invest #crowdfunding

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Crowdfund Night Recap

I attended Crowdfund Night yesterday at the Notman House and saw familiar faces. The Plebs and Make a Champ crowdfunding platform founders, to name a few. There is clearly a growing trend in Quebec to bypass the current financing structures. For many reasons. One, not everyone gains access to financial programs and two, it can take months until you do receive funding if you are selected. Hence, viable and right-on-target projects often see their days counted and end up in the sewer. Plebes and Make a Champ address those needs. They select their projects carefully, assessing their worth (past, present, future) prior to engaging with them.

This said, the “other” model – Equity crowdfunding or Invest crowdfunding – is more complex as it involves securities regulation. Buying private equity online through a web platform is a formidable way of helping businesses scale yet there are potential pitfalls along the way. Last night, I gave a talk on Invest Crowdfunding, the “Localvesting” model:  how it could create sustainability, how mom and pop investors should have the opportunity to invest in a business they believe in, how fraud is kept to a minimum in invest crowdfunded nations, and social medias’role. In short, how this model fits well within the Quebec ecosystem. We also discussed what it takes to make it legal in Quebec and the rest of Canada.

Since our last presentation, I got the distinct impression that awareness around this model is growing. Questions from the crowd were more acute. “Which sectors will benefit from this model?”, “Are there support structures in place to help businesses crowdfund?”, “How does share valuation work?”. It’s safe to say that grassroot initiatives like ours are beginning to unfold. Public speaking is one facet of our movement. Content generating/curation, all-around networking, engaging within our communities, think tanks and our own professional endeavours are also part of the equation.

At Invest Crowdfund Quebec, our objective remains to inform, educate, and create awareness. At our next team meeting, we’ll be mapping out 2013 action plan. We invite our readers to show their support by attending events, asking more questions on this blog, recommending articles and generating content. These questions and thoughts will contribute to the framework we are building in collaboration with the other provinces. Such a framework is a gateway to convincing our authorities to put  Invest Crowdfunding on the public agenda.

Special Thanks to the organizers Heri Rakotomalala and Bruno Rakotozafy who did an awesome job!


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Remettre le Québec sur la carte numérique: on en parle

A l’occasion d’une rencontre de presse pour l’adoption d’un Plan numérique pour le Québec, une poignée d’influenceurs du Web – les treize étonnés – ont laissé savoir leur étonnement face au ralentissement du Québec dans les technologies et l’innovation. Leut rapport d’étonnement illustre le rôle que pourrait revêtir le numérique dans le développement de notre société, et je cite:

  • Soutien à la gouvernance : le numérique permettant à la fois une production et une diffusion des informations gouvernementales.
  • Soutien à l’économie : le numérique permettant une plus grande présence québécoise sur le Web.
  • Soutien aux citoyens : le numérique permettant une meilleure participation à la société.
  • Soutien aux infrastructures : le numérique permettant de développer une multi plateforme de nouvelle génération permettant de réduire la fracture numérique.

En bref, une invitation au dialogue avec les instances gouvernementales pour remettre le numérique sur l’agenda.

Ces constats viennent renforcer notre position à Invest Crowdfund Quebec, qu’il faille adopter le modèle de “Invest Crowdfunding” (financement participatif pour investisseurs) prouvé efficace ailleurs dans le monde (voir mon billet Démocratisons le financement ensemble) pour déclencher un nouveau cycle de croissance, encourager les entreprises à demeurer au Québec et attirer les investisseurs étrangers comme le souhaite la Première Ministre Mme Marois. Le Invest Crowdfunding en bref, consiste à offrir une plateforme web qui inviterait les investisseurs individuels à acheter des parts dans une entreprise locale dont le produit ou service répond au besoin du marché.

Nous nous sommes assis avec l’Autorité des Marchés Financiers en septembre pour leur expliquer d’une part l’état d’urgence (l’écart de financement, l’exode des entreprises talentueuses) et d’autre part leur proposer de travailler ensemble afin de créer un “framework” qui puisse à la fois assurer la protection des investisseurs et stimuler le développement de nos entreprises. D’autres provinces comme le Nouveau-Brunswick ont embrayé le pas. En effet, la Commission des valeurs mobilières du Nouveau-Brunswick organisera une plénière autour du Invest Crowdfunding le 27 novembre car “nous voulons prendre une longueur d’avance sur le reste du Canada“.  Je vous dirai que là n’est pas la question car au bout du compte, toutes les provinces devront signer un accord de Invest Crowdfund pour que ce soit adopté au niveau national.

La première étape pour nous, ici au Québec, et je m’en aperçois au fil des rencontres et des présentations, est d’informer et d’éduquer avec des exemples concrets à l’appui car beaucoup ne connaissent pas ce modèle parfois confondu avec le modèle kickstarter ou indiegogo. La comparaison des modèles fera l’objet d’un autre billet mais vous pouvez déjà consulter l’excellente étude publiée par le FMC au mois d’août.

Ainsi nous lançons un appel à tous ceux qui ont un avis sur le modèle de Invest Crowdfunding, de vous prononcer en commençant par une Déclaration comme l’ont fait Chris Arsenault, Michelle Blanc, Michel Chioni (voir les commentaires), car ensemble nous réussirons à le placer à l’ordre du jour. Merci.

 


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Les Montréalais sont-ils “pour” le Invest Crowdfunding?

Les Montréalais sont-ils “pour” le Invest Crowdfunding?

VC TV leur a demandé…

C’est à l’occasion de l’édition spéciale “Invest Crowdfunding” organisée par Montreal New Tech au mois d’octobre, qui a permis à 3 start-ups engagés dans ce domaine de pitcher à une audience d’environ 200 personnes de tous horizons: les entreprises en démarrage, les investisseurs, les organismes règlementaires, les plateformes de crowdfunding, les grandes entreprises, les stratèges, les relations publiques, les médias…

Diana Yazidjian de Invest Crowdfund Québec a fait un tour d’horizon du financement participatif pour investisseurs pratiqué ailleurs dans le monde, donné quelques chiffres sur l’écart de financement au Québec et invité tous un chacun à signer la pétition électronique pour son adoption.


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Are Montrealers “for” the Adoption of Invest Crowfunding?

Are Montrealers “for” the Adoption of Invest Crowfunding? 

Check it out…

Montreal New Tech organized a special Invest Crowdfunding edition this past October, featuring start-ups engaged in that area. The event gathered nearly 200 people. Start-ups, VCs, policy-makers, crowdfunding platform providers, large corporations, strategists, PR, media, …

Diana Yazidjian of Invest Crowdfund Quebec presented the landscape of Invest Crowdfunding practiced in other parts of the world, the financial gap in Quebec and concluded with a call-to-action to sign the petition


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Démocratisons le financement ensemble

Invest Crowdfund Québec: une mise à jour

Quoi de neuf à Invest Crowdfund Québec ? En bref, l’équipe s’est agrandie, les données enrichies, les parties prenantes se sont montrées intéressées, notamment l’Autorité des marchés financiers (AMF) et nous avons tenu notre premier événement à Montreal New Tech aux côtés de Noah Redler, Start-up Canada. Voici un aperçu.

Actualité et Faits saillants

Notre groupe a démarré au mois de juin dernier. Il nous a fallu deux bons mois pour défricher le terrain :

–       colliger les bonnes pratiques de financement participatif pour investisseurs (FPI) la où il se pratique en toute légalité soit en Australie, en Angleterre et au Pays-Bas pour ne nommer que ceux-ci.

–        Obtenir des retours d’expérience des fondateurs de plateformes de FPI (ASSOB, Crowdcube, etc..) qui connaissent une croissance importante et leur poser les questions dures autour de la responsabilité corporative, de la diligence raisonnable et la prévention des pratiques frauduleuses

Le Québec se doit de regarder ce nouveau modèle d’autant plus aujourd’hui que l’indice d’innovation est en baisse et que nous observons l’exode de start-up ou d’entrepreneurs  vers des horizons meilleurs.

Nous sommes à l’écoute des signaux du marche et des enjeux soulevés par l’écosystème  La prévention de la fraude en fait partie et pour cause, le FPI n’est pas sans risque. Il nous incombe donc d’obtenir une compréhension complète,  à savoir comment ce modèle pourrait être mis en œuvre dans notre économie compte tenu de la juridiction.

L’expérience dicte que les pays pratiquant le FPI depuis plusieurs années, les investisseurs seraient moins exposes aux pratiques frauduleuses par rapport a d’autres mode de financement. Nous estimons que la quantité, la qualité et l’accessibilité de l’information véhiculée sur les réseaux sociaux contribueront a plus de transparence et veilleront davantage sur la protection des investisseurs.  En effet, les fondateurs de plateformes FPI avec qui nous nous sommes entretenus exigent de leurs “clients” (les entreprises à la recherche d’investisseurs) qu’elles produisent des états financiers, des prévisions et autres documents vérifiant leur viabilité, qu’ils interagissent avec les investisseurs potentiels (fils de discussion, chat). Ayant consulte certaines de ces interactions, j’avancerai que les entreprises, toutes tailles et secteurs confondus, qui s’inscrivent sur ces plateformes savent qu’elles devront répondre aux questions pointilleuses des investisseurs potentiels (voir capture d’écran). Le pitch ne s’arrête donc pas à la vidéo de présentation.

Ceci dit, dans cet exemple, Optimum Technologies, une entreprise en biotechnologie, répond aux questions d’investisseurs aguerris de toute évidence.

Ces investisseurs “experts” sont libres de s’enquérir sur tous les aspects de l’entreprise, les brevets déposés, la structure organisationnelle, etc.… tel qu’illustre ci-contre.

Le FPI pourrait tout aussi bien se prêter aux autres industries, e.i. le commerce ou les services.  Prenons Maggie and Rose. Cette entreprise bâtie de toute main, qui offre des services complets au famille de type “club” est en activité depuis 5 ans, affiche un revenu exponentiel a opte pour le FPI pour accroitre sa présence et ouvrir de nouveaux points de vente. Elle a recrute 14 investisseurs a ce jour. Le cas inspirant de Maggie nous renvoie l’ascenseur. Pourquoi ne ferions-nous pas autant ici au Québec où les PME (<100 employés)  représentent 95% des entreprises ?

L’équipe ICC-Q s’agrandît

 L’équipe ICC-Quebec regroupe des professionnel chevronnés, reconnus de leurs pairs, et investis d’une mission commune: promouvoir le FPI et engager la communauté. Ainsi depuis deux mois, nous allons à la rencontre des membres de l’écosystème local et international – investisseurs institutionnels, entreprises en démarrage, PME, corporations, consultants, chercheurs académiques, associations – pour recueillir les avis, évangéliser, provoquer le changement dans les plus hautes sphères.

Nous bénéficions également du support continu de Dr. Cindy Gordon,, Leader national d’Invest Crowdfund Canada, Me Andrea Johnson pour ses conseils avisés du point de vue légal,  Sherwood Neiss, le parrain du JOBS Act, pour sa vision stratégique, et enfin Victoria Lennox, fondateur de StartupCanada qui vient de conclure  avec succès une tournée nationale de promotion des PME.

ICC-Q rencontre l’AMF: des débuts prometteurs

 L’Autorité des marchés financiers (AMF) est l’organisme mandaté par le gouvernement du Québec pour encadrer les marchés financiers québécois. Nous avons eu l’occasion de leur présenter notre mission, notre gouvernance et nos objectifs. L’équipe dédiée FPI de l’AMF s’y intéresse de près, compte tenu des réalités de notre marche: les limites des modes de financement, la proportion d’entreprises publiques en baisse. Nous espérons poursuivre cette réflexion avec l’AMF, ouvrir la règlementation actuelle et nous orienter vers une exemption pour les entreprises optant pour le FPI.

En somme, nous estimons que tout individu devrait avoir l’opportunité d’investir dans une entreprise qu’il juge prometteuse, que les entreprises, en mal de financement traditionnel, devraient avoir le choix de recruter des investisseurs en ligne. Nous vous demandons de montrer votre support en signant la pétition http://icanada.nu/crowdfunding/petition/petition-fr


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Democratizing Investment: Join Us!

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, AustraliaUK 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 JohnsonSherwood 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!