Beyond bootstrapping raising capital is critical to launch or grow most ventures. Here's a lean overview of common funding options. Here's to your future success!

1. Equity & Funding
Introduction
Date: January 8, 2018
Prepared for: Founders Institute Toronto
Prepared by: Craig Asano, NCFA Canada

2. 2Fintech & Funding Association
Massive Fintech
Network
Partners
Advisors
Members
90+ Platforms
20+ Providers
45 Portals
2018
2017
2016
2015
Oct 2012
Programs Services Global Network
P1
P2

3. 3Are you ready to raise capital?

4. 4Are you ready to raise capital?
Set your valuation appropriately
• Look for comparable businesses
• Geographic and investor group dependent
• Discounted cash flow. Make your projections realistic.
would you be willing to take your compensation as a % of
forecast?
• Ultimately a negotiation between investors and the business
• Expect 10% - 30% dilution per round
• Use preferred shares, convertible notes, SAFE / SAFT if
uncertain or to avoid significant dilution
How much time can you devote to funding?
• Do not do this half ass. If after a defined period (ie 1 year) you’ve been
unsuccessful then face facts (markets are highly efficient)
• Understand potential impact to ego / brand equity and team motivation
• Leverage templates. Be resourceful. Seek expertise.

5. 5Are you ready to raise capital?
How much money should we raise?
• Determine key milestones that impact business’ value
• IP strategy, Prototype
• Sales and Revenue (ie repeat customers/month
• Product/market fit or key development milestones
• Human resources and team building (growth)
• Raise what you need to get you to the next milestone
(iterate and prove)
Bootstrapping: advance your situation using existing resources
Lean start-up: get to market and revenue positive as quickly as
possible
What non-dilutive sources of capital are
available at each step?

6. 6Are you ready to raise capital?
Understand your initial capital structure (and dilution)
• Founders (80-90%), Leadership team (10-15%), Advisors (1-3%)
• Skin in the game
• Put in writing and use vested agreements
• Source cap table excel sheets online

7. 7
Where can I find Investors?
• Identify potential investors and sources of funding (keep doors open):
• Government grants / funds
• Corporate sponsorships and grant programs
• Friends and family, Loans and credit
• Crowdfunding (Equity, debt/lending, reward, ICOs/tokens,
Royalty)
• Angel investors
• Venture capital
• Dealer-brokers, agents, intermediaries
• Private equity interested in side-car investments
• Ask for introductions
• Global markets
Sources of Private Capital

8. 8
Be strategic with your approach
• Make a list of contacts that can realistically help (assign probability
and amount you are seeking from them)
• Seek to develop long term relationships and understand what you
can offer them and vice versa.
• Learning loop: Listen – learn – track and improve (alignment,
probability)
• Start building your funding networks yesterday
• Online – personal & company profiles
• Offline - Events, conferences, pitch forums, investor networks
• Understand the timing of your ask relative to the ‘funding window’
and type of investor
• Stay on top of funding research and news to find similar companies
to learn from / with.
• Ask for introductions
• Turn advocates into loyal customers and investors
Get in Funding Mode

9. 9
What are investors looking for?
• A product/services that addresses a large market need (not a nice to
have)
• Team that can execute who has a solid understanding of business
and challenges
• Validation/proof (de-risk)
• Some are seeking social impact or to balance impact with profits
The Investment Process
• Pitch deck is bare essential
• Meet and greet is only the first step
• All investment basics must be met
• Due diligence review
• Terms negotiated
• Close (in person)
What are investors looking for?

10. 10
Deal Breakers and Tips
• Avoid one man team, no skin in the game, unrealistic valuations,
serious character flaws
• Raise equity capital with no clear purpose, to replace debt, pay big
salaries, to develop an idea and not a business
• Face to face meetings (3-5x more capital $ than email or call)
• Securing initial key/lead investor will make raising $ significantly
easier
• Only invest if they know you, know the business and like the
investment opportunity
What you Need to get Started

11. 11Basic Crowdfunding Models
< $10K $10 - $250K < $100 - $350K+ < $250K - $3M+
Social Material Investment Benefits

12. 12Raising Capital Online in Canada

13. 13
• Wide distribution over the internet
• Low cost, efficient, transparent capital
• The `great equalizer`
• Media/PR, awareness
• Increase customer engagement and
• Evangelize backers into investors
(customer acquisition)
• Reduce risk by getting feedback on
new launches (product or ventures)
• Market research
Access to Capital
Marketing Platform
Validation
• Raising funds via crowdfunding markets is a
very public and transparent
• Protect your IP and speak to a lawyer
• Crowdfunding takes a lot of effort and
commitment
• The majority of Ideas fail to reach their
funding goal
• How will this affect your companies
brand?
Expose your Idea
Resourcing
Failure
Crowdfunding Pros/Cons
Benefits Risks
For Companies

14. 14Examples
Source: Kickstarter Campaign page
Innovation – Social – Incentives – Economic Growth
Quidni Estate Winery (NCFA Director)
• Just completed $100K equity raise (for 3%
equity ownership)
• Took over a winery. Went digital (including
online wine sales). Converted virtual wine
tasters into investors
Impak Finance (Equity Offering)
• Raised $1.2 million (goal was $500K for 6%)
from 1450 shareholders to create first
socially responsible Canadian bank
• $500,000 in the first 24 hours!
• Inclusive & accessible: $100 shares for
$100

15. 15NCFA Canadian Online Funding Directory
Reward/Donation:
Equity-based via Dealer:
• Steady growth in portals
• Equity, Debt & Royalties all emerging
• Fintech is all the rage
• Real estate and entertainment,
film/media crowdfunding emerging
Consumer and
Small Business Loans:

16. 16
Crowdfunding Framework
Planning & Strategy
• The greater your planning efforts, the
greater your chance of achieving your
funding goal
• Do not launch a crowdfunding
campaign if you are not ready.
(3 months)
(40 days – 90 days)
(Ongoing)
Post-campaign
• Your campaign is done but now you have to
deliver on your promise
• Fulfillment
• Ongoing customer engagement
Campaign Execution
• Daily execution of tasks outlined in the
campaign plan
• Control, monitor and adapt
Feedback
Loop

17. 17
Success Factors
SUCCESS
2. Network Strength
• Sizeable online network and
social media presence?
• Will media/PR and influential
bloggers cover your story?
1. Quality Idea & Pitch
• Unique, enterprising and clear value proposition
(conveyed online in a simple manner)
• Get others excited about your story?
• Clear funding target and specific goals?
4. Key Docs
and Content
• Compliant and
necessary for investor
review
3. Strong Committed Team
• Is your team credible, committed and
willing to deploy the resources and
time to execute effectively?
• Time management
HARD WORK!
5. Marketing
Campaign &
Incentives
• Planning and strategy
with ability to execute
through launch to post
campaign

18. Common Mistakes
• We underestimated the time commitment involved
• We didn’t test our campaign sufficiently
• We launched before we were ready
• We didn’t develop an accurate budget
• We didn’t consult legal counsel or professional providers
• We didn’t account for taxes
• We tried to do everything on a shoestring
• We didn’t realize how important the video was
• We didn’t understand liability exposure (eg.
misrepresentation) and intellectual property
• We had little to no traction so we gave up
• We blamed it on the portal

20. Join Us
Education & Research
Market Access
Crowdfunding Infrastructure
Capital Raising Prep Services
Support and Leadership
Advocacy
GET IT IN
TOUCH
Fintech & Funding Association
ncfacanada.org
crowdfundingsummit.ca