Crowdfunding Cultivates ‘Fail Fast’ Culture, Helps Women Raise Startup Capital
by Donal Power on Jun 5, 2015 | News, Technology
“Fortune Favours the Bold” was a recurring message at Enterprise Toronto’s third annual Money Forum earlier this week, which drew a diverse crowd of entrepreneurs and startup founders to City Hall to explore aspects of financing new ventures.
Forum panelists repeatedly cited having a high risk tolerance and confidence in one’s vision as prerequisites for succeeding as an entrepreneur. Equally important was knowing when to reach out for support and advice. Non-profits Futurpreneur Canada and the National Crowdfunding Association of Canada were on hand to both embolden new business leaders and to provide that much-needed advice.
Craig Asano, Executive Director of the National Crowdfunding Association of Canada (NCFA), outlined a dizzying array of opportunities available to startups through the fast-changing world of crowdfunding. The better-known crowdfunding platforms like Kickstarter focus on fundraising through donations and rewards, while he explained debt-based crowdfunding and equity crowdfunding lie on the more complex end of the spectrum, often involving securities law and jurisdictional issues.
“Crowdfunding has been a tremendous source of capital for not just for innovative companies, but for non-profits, individual projects, even public companies are interested,” he said of an online funding medium that is growing exponentially each year. Raises through global crowdfunding grew from $1.5 billion in 2012 to $16.2 billion in 2014, with a further increase to $34.4 billion forecast for 2015.
With half of NCFA’s 1,100 members comprised of small businesses, Asano says crowdfunding offers startups several major advantages over traditional approaches. The most obvious crowdfunding benefits are the ability to quickly raise capital and the enhanced marketing profile generated via the fundraising campaign. But almost as important is how crowdfunding allows startups to pursue fast and relatively affordable market validation for their products.
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