1. Crowdfunding Basics
2. Who benefits from it today
3. Crowdfunding sites and examples
4. Types of business fundraising
5. Tax implications
6. What works, and what doesn’t
7. Homework: Let’s crowdsource ideas!
Sounds great. What is it?
“The collective effort of individuals who network
and pool their money to support efforts
initiated by other people or organizations.”
Crowdfunded in 1884!
1. Internet and social media -
networks of networks. Global
2. SME’s can’t access risk capital.
3. Momentum and buzz - It works
and can’t be stopped.
Governments are getting onboard.
How it works
1. A business or individual has an idea that needs
2. Creates and promotes a crowdfunding
campaign online, sets target
3. Backers get a “reward” for contributions
4. Crowdfunding site takes about 10% of proceeds
Who uses crowdfunding?
Causes: Not for profits, education,
fundraisers, disaster relief
Creatives: Indie art, film, books, design...
Product development: Technology products,
food, pet toys...huge range
Business growth financing: Typically SME.
$800,000,000 raised for
50,000 projects from
4.8 million backers.
Focus on creative
projects: Art, books,
Now in Canada.
Kickstarter – Product Development Campaign
Indiegogo: Local success story
Pub Pedals: Turn clipless
pedals into platforms
Canmore’s Jeff Thom
Great publicity and $8000
Rewards = Product
Now shipping to 30
become customers and
Canmore’s Georgetown Inn!
Fundly – Causes
Largest site for causes.
$300M + raised.
Trips: Working on aid
Events: Runs, walks,
Health and Medical
Crowdfunding your Business
Two non-equity models:
2. Rewards and pre-purchase
• Offer rewards based on contribution levels.
• 3 to 5 reward levels recommended, with one
• Tips: Don’t overspend. Be creative. Watch out
for shipping costs.
– Handwritten thank you note or thank you video.
– Merchandise: Branded t-shirt, etc.
– Credit - album liner notes, film credit, packaging.
Business Financing: Crowdfunded Equity
Access to private capital
beyond personal network
Today: US JOBS Act permits
Canada: Lagging behind. ON
and SK developing
Legal only through OM
exemption – complicated.
• No free lunch. If funds are used for a business,
they may be taxable.
• Keep great records. Money received, cost of
rewards and any other costs associated with the
• CRA is watching, or will be soon.
Source – Devry Smith LLP
65%+ of campaigns fail to reach their targets.
Define your project. Be specific.
Tell a story – make a connection.
–Make it personal
–Make a compelling video
Prime the pump: reach out to your personal network first.
Get to 20% of target ASAP.
Get social: A strong social media presence helps to reach
beyond your personal network.
Offer great rewards.
Have and entry-level donation amount. Average is around
This is the most important part of your campaign. Treat
it that way.
Quality counts. Ask for help. Rent or borrow a DSLR.
Be brief. Attention spans are short. Max 3 minutes.
Be clear. After 30 seconds, the viewer should know what
your campaign is about.
It’s not all about you.
Make the ask.
What Doesn’t Work
Set it and forget it.
• You need to be persistent, engage with
your backers and spread the word. Reach
out to media.
No video: Cuts success rate by 70%.
Unrealistic goals: Raise only what you need for
that specific project.
No rewards = no chance. Unless it’s a charity.
Am I ready to work hard for the duration of the
Do I have a story, not just a product pitch?
Is my idea unique or interesting enough that a
stranger would back it? Will people share it?
Can I deliver on my promises to my backers?
Can I handle the risk of rejection?
Calgary & Crowdfunding
Let’s crowdsource some ideas!
Strong creative community