Amid Equity Crowdfunding Uncertainty, Organizers Initiate Second CrowdFund Night in Montreal

Crowdfund Night is returning to Montreal on Thursday evening, as a promising line up of speakers seek to educate a crowd of entrepreneurs, artists and curious guests.

Thursday’s talk marks the second in a series of events meant to promote crowdfunding in Canada, and helps educate those interested in using this tool as a means to fund unique projects. Seeding Factory, a Montreal-based crowdfunding consultancy business run by Heri Rakotomalala and Bruno Rakotozafy, is organizing the events.

“I really think every talk is going to be interesting,” said Rakotomalala. “Crowdfunding can be used by anyone and everyone to kickstart a project, and that’s what we want to communicate with this event.”

A successful Montreal crowdfunding initiative happened in October when the OSMO Foundation succeeded in raising over $100,000 to renovate Notman House, a co-working space that houses the FounderFuel accelerator program among other startups and freelancers.

But not every campaign is immediately successful. Following Startup Canada’s ambitious entry into the Canadian entrepreneurial landscape, they launched a crowdfunding effort intending to raise $100,000. They only raised $36, 731 in an initiative that was as much ill timed as it was too lengthy. Nevertheless it resulted in funding that helped the organization, it just wasn’t as much as they wanted.

With $1.1 billion in total crowdfunding transactions in 2011 and an estimated $3 billion after 2012, the space is heating up every year. In fact, some estimates place future crowdfunding totals at $500 billion annually. Perhaps in future years such initiatives as Startup Canada’s will achieve success more easily with more awareness of crowdfunding’s unique potential.

Accordingly some of the speakers on Thursday aim to educate on how successful crowdfunding campaigns can be leveraged in 2013. iNovia Capital’s Chris Arsenault will deliver a foreword on the opportunities and challenges in crowdfunding and how it can be a valuable tool. Meanwhile IndieGogo’s John Vaskis will talk about a boom in the Quebec and Canadian crowdfunding landscape. Rakotomalala will educate participants on how to make a successful crowdfunding video while Clone Magna’s Dan Kim will talk about how he surpassed his crowdfunding initiative by 700 per cent.

Meanwhile Rakotozafy will discuss equity crowdfunding and its likelihood in Canada, no doubt a hot topic. While still illegal in Canada, equity crowdfuding is when broad groups of investors fund startup companies and small businesses in return for equity. However in the United States and Canada it is generally forbidden to solicit investments from the greater public. With President Obama signing the JOBS act in April 2012 the US Securities and Exchange Commission (SEC) has until 2014 to set out specific rules of equity crowdfunding.

In Canada meanwhile, it is currently up for debate. Rakotomalala mentioned that the Autorité des marchés financiers (AMF), Quebec’s financial regulatory body, will hold a public consultation on Wednesday on the future legality of equity crowdfunding. “Many entrepreneurs like me have been vocal about legalizing this for the past years and it’s taken a lot of work to have that public consultation finally,” said Rakotomalala.  

For entrepreneurs curious about how they may go about initializing a crowdfunding campaign, Seeding Factory will be offering free 15-minute consultations during networking time, following the event’s speakers. They’ve advised those interested to sign up on their website before Thursday night.