Investment Solutions

As Canada’s nascent equity crowdfunding market struggles along, the European market continues apace. There have been many more successful fundraisings on the other side of the Atlantic Ocean – Europe (and particularly the United Kingdom) accounts for a very large part of the approximately US$2 billion equity crowdfunding market, according to Cambridge University.

 

Over a dozen successful crowdfunders, representatives from the leading European platforms, and a number of other experts at the forefront of the equity crowdfunding revolution. There were contributions and case studies from the United Kingdom, France, the Netherlands, Germany, Sweden, Finland, and Estonia. Here is a sample of some of the key takeaways, and insights that Canadians can learn from their European cousins.

 

Equity crowdfunding works best when a strong relationship already exists with your crowd. To get journalists interested, you need to be doing something unique or special – just doing a crowdfunding campaign won’t interest media anymore. A lot of work needs to go into outreach, even before your campaign starts. If you want to run an equity crowdfunding campaign in the future, begin warming up your community NOW.

 

 

Having a ‘lead investor’ before your public campaign kicks off will hugely improve your chances. It means your campaign will start with momentum, and investors will have more confidence if you have a ‘smart money’ backer. Equity crowdfunding can have transformational positive benefits. Some campaigns even believe the exposure was even more valuable than the money they raised.

 

In 2016, we saw more countries embrace the opportunities that equity crowdfunding allows – including in the United States where Title III crowdfunding came into force in May. And in Europe, there is a strong push for additional equity financing for companies and innovative projects, aided by supportive regulators.

 

When different equity crowdfunding markets learn from each other, each of them will become stronger. Despite regulatory differences, running a campaign has much in common between countries, so taking note of what is working elsewhere in the world will have strong applicability for Canadian campaigns too.