Candice So
@candice_so
Media coverage from ITBusiness.ca~~~~~~
You may have only crowdfunded your first burrito this year, but Bret Conkin’s interest in crowdfunding stretches back to before Kickstarter ever allowed you to fund a potato salad.
In 2008, Conkin founded one of Canada’s first crowdfunding portals, a year before Kickstarter hit the scene. His portal, FundFindr, was not geared towards consumers funding frivolous food projects – instead, it’s a more serious endeavour, aimed at helping entrepreneurs make pitches to investors. However, when his legal counsel told him crowdfunding startups based on shares and equity wasn’t allowed under Canada’s investment regulations, he decided to close the project down. Soon after, he joined FundRazr, a Vancouver-based crowdfunding platform, and became its chief marketing officer – and that’s where he’s been for almost two years.
Now, however, the time is ripe for not just equity-based crowdfunding, but also for all kinds of other ways to raise money from the crowd – and to do so seriously, without really involving any foodstuffs. In July, Conkin launched CrowdfundSuite, a consultancy business which helps businesses, investors, and financial services professionals choose the right kinds of crowdfunding platforms.
“We were just a little early at the time,” says Conkin, referring to FundFindr. And while he stayed on with FundRazr for the last couple of years, he adds he wanted to get back to working with businesses and investors, and to help them navigate the intricacies of equity-based crowdfunding exemptions in Canadian investment law.
“There’s a lot of confusion and noise in the marketplace. You have literally hundreds of different platforms that have started up, and people talking about crowdfunding, equity crowdfunding, crowdlending, shared business lending – there’s just so much confusion,” he says. “And I’ve talked to a lot of entrepreneurs who aren’t sure about what their best option was.”
To help them figure it out, CrowdfundSuite offers access to three Canadian crowdfunding platforms – FundRazr, SeedUps Canada, and InvestNextDoor. Each platform operates on a different model, with a different way of charging transaction fees, and caters to a different way of running a crowdfunding campaign.
For example, FundRazr may be more handy for project-based campaigns, like raising money for a specific product and offering rewards, like a preorder of that product, when the funding stage wraps up. SeedUpsCanada is specifically geared towards equity-based crowdfunding, while InvestNextDoor is a crowdlending platform that helps entrepreneurs set up listings and ask different investors to help them grow their businesses.
Knowing the differences between these platforms gives CrowdfundSuite the ability to steer startups from one method of crowdfunding to another, based on their needs, Conkin says.
“At different stages of the growth of a company, we’re helping them access the solution that best fits their needs. For instance, equity crowdfunding is not a great solution at an early, early stage, because it can be really expensive in the long term, when you have a low valuation … So we would help an entrepreneur understand, well, let’s look at debt-based crowdfunding,” he says.
The strategy here is to help entrepreneurs make more educated choices, Conkin adds. While he doesn’t have any plans to work with the big crowdfunding platforms like Kickstarter and Indiegogo as of yet, he says he’s “keeping the doors open.” However, he says those platforms are more based on giving funders rewards for backing a campaign, which may not suit startups that don’t create physical gadgets or products.
In Conkin’s mind, these are still early days for the crowdfunding space – and that means there’s a lot of room to grow, especially on the business side.
“There’s just a lack of capital and funding gap for small businesses, and it’s really magnified in the U.S., where the financial meltdown of 2008 left a lot of businesses unable to access bank financing,” he says, adding social media has also been an immense help in promoting crowdfunding platforms.
Even bigger is the shift in how investment regulations have changed, opening the way for equity crowdfunding, with Conkin calling them the “most dramatic” since the Great Depression.
“Everybody’s going to think about, what does it mean to them, how can they navigate this space, and profit? … We are in the early stages, we have the expertise, and we’re here to help them,” he says.
Going forward, Conkin plans to add real estate crowdfunding to CrowdfundSuite’s consultancy offerings, as well as to expand into helping U.S. businesses with their equity-based crowdfunding.
