How to Raise Money for Start-Ups, Early Stage Enterprises, Charities and Non-Profits
Late this summer, a new crowdfunding book was released by serial author Iain Williamson of Learn2succeed.com Incorporated. I have read the book and find it an interesting and easy-to-read book of about 156 pages on crowdfunding for beginners. It is perfect for those who are just wading into the subject and want a simple book that looks at equity and non-equity crowdfunding from a global perspective including the United States, Canada and the United Kingdom.
I have the privilege of asking author Iain Williamson a few questions about his new book which covers the current ‘state of play’ so readers can quickly get a grasp on what’s in it for them.
Q. 1 Why did you write the book?
Actually, I did not just wake up one day and want to write a book about crowdfunding. For over 20 years, I have been writing a whole series of books on small business financing in Canada which I update every year. In certain chapters in different books I found myself writing about crowdfunding, For example, I wrote about debt crowdfunding in my book on bank and debt financing and equity-crowdfunding in my books on raising venture capital and going public. However, I came to realize that my writing was a little superficial. So, I decided to take the bull by the horns and delve into the subject in more detail. Once I did that, I realized that I had enough material for a stand-alone book on crowdfunding.
Q.2 What makes you qualified to write about crowdfunding?
Well, there are no university degrees on crowdfunding; at least not yet! Actually, I worked as a financial analyst in the stockbrokerage business for five years so I guess that’s where I acquired the skills to pick companies apart to see how they tick. In essence, I used the same approach in trying to get a handle on the concept of crowdfunding.
Q.3 Obviously, Learn2succeed.com isn’t your name, so why the pseudonym?
Good question! I had incorporated the business name quite a long time ago, even before the dot com bubble burst. I thought it was a great name for titles dealing with the digital age; a little like the Dummies series of books but more focussed. Also, it gives me a certain amount of anonymity so I can say nasty things about groups of people I don’t like without them spitting in my eye when I walk down the street!
Q.4 In that regard, your book contains some sharp criticism for securities regulators.
You’re darned right! They’re not at the top of my fan list! Basically, they don’t get it! When there was bi-partisan Congressional support for the Jobs Act, everybody was jumping up and down with joy and predicting how many gazillion new jobs could be created when small businesses were able to raise tons of money in a tight credit market dominated by Scrooge bankers. What they forgot to take into account were the boring regulators hiding behind their mountains of red tape and ready to crush any innovative idea that they couldn’t get their heads around!
Q.5 Why such harsh comments?
You have to go back to the horrors of the 1929 Stock Market Crash when most investors lost their shirts, pants, underwear and everything else. In the aftermath, the American Government decided that it was time to protect the people from themselves. So, the Securities and Exchange Commission was born some years later and set up rules and regulations which heavily restricted the average Joe’s ability to invest in new companies unless he or she had enough assets. The same goes for Canada.
Q.5 So what’s wrong with that?
Well, the average Joe was denied, and still is denied, access to the private capital markets which is absurd. Joe can go down to the racetrack and blow his financial brains out on some nag that wasn’t fed enough oats that morning and Joe doesn’t have to declare his net worth to the bookie before he lays his bet. Likewise, he could go to Vegas and blow his brains out. Moreover, the government will always be all to happy to take his money if he buys a ton of lottery tickets as well. Meanwhile, the poor sod who’s got a great business idea can’t raise two cents to get his show on the road.
Q.8 Okay, so where does all this lead?
As my book shows, crowdfunding has definitely taken off for charities and there are also some spectacular success stories involving rewards-based crowdfunding. When it comes to personal loans, crowdfunding is showing great promise and it appears to be gaining some traction for raising business debt. In fact, The Lending Club is in the midst of an IPO! The challenge, however, lies with equity-based crowdfunding where shares are sold to the public. The Brits have come up with a way to do it but, for the most part, the U.S. and certain provinces in Canada are bogged down in a quagmire of regulations.
Q.9 Is there a solution?
Absolutely! We have to put some firecrackers under the seats of the regulators and get them to think outside of the box! Now, that’s a tall order but it can be done and my book suggests some practical ways to get the show on the road. I encourage people to buy a copy of the book, obviously since I wrote it and it pays the bills, and join the debate!
Q.10 So what topics are covered by the book
The titles of the various chapters are set out below so you have an idea of what the book’s about.
Introduction Where Crowdfunding Fits into the Big Picture
Chapter 1 Preparing Yourself for the Equity Crowdfunding Adventure
Chapter 2 Issues You May Encounter When raising Equity-based Crowdfunding
Chapter 3 The U.S. Equity Model for Crowdfunding
Chapter 4 Crowdfunding in Canada
Chapter 5 Crowdfunding in the United Kingdom
Chapter 6 Crowdfunding Down Under
Chapter 7 The Crowdfunding Loan Model
Chapter 8 The Crowdfunding Rewards Model`
Chapter 9 Raising Money for Charities & Non-profits
Chapter 10 The Future of Crowdfunding
Q.11 So how can one order a copy of your book?
That’s easy. The book can be purchased securely online at http://crowdfundingforbeginners.biz/ or from our regular site at www.ProductivePublications.ca. Both sites are set up for purchases in $CAD using VISA, MasterCard or AMEX.
Americans can purchase from our $USD site at www.ProductivePublications.com using VISA or MasterCard in $USD.
Purchases can also be made to our order desk toll-free for US and Canada at 1-(877) 879-2669 FREE.
Info about the Learn2succeed, myself, the author of the book and Productive Publications can be found by clicking the links at the bottom of the intro page at http://crowdfundingforbeginners.biz/
Thanks Iain for your candour and for writing a book for investors, companies and others who want a non-lawyer, non-technical book about crowdfunding.
This blog is not intended to create, and does not create an attorney-client relationship. You should not act or rely on information on this blog post without first seeking the advice of a lawyer. This material is intended for general information purposes only and does not constitute legal advice. For legal issues that arise, the reader should consult legal counsel.
Brian Koscak is a Partner at Cassels Brock & Blackwell LLP located in Toronto, Ontario and Chair of the Private Capital Markets Association of Canada (formerly, the Exempt Market Dealers Association of Canada). Brian is also a member of the Ontario Securities Commission’s Exempt Market Advisory Committee and Co-Chair of the Equity Crowdfunding Alliance of Canada.
Brian can be reached by phone at 416-860-2955, by e-mail at firstname.lastname@example.org or on twitter @briankoscak. Brian also regularly writes about Canadian securities law matters on his personal blog at www.briankoscak.com.