Sherwood Neiss is making the rounds to tell Canadians about this “really great idea” just made law in the US and how to get it to work in Canada. There is considerable confusion. And there should be some healthy disillusionment too.
We need to separate the discussion about ‘owning a piece of the action’ in favour of ”making good happen”. Crowdfunding for financial gain is very different than Crowdfunding for business growth or for social good.
The imaginary gold rush promise of Crowdfunding as an investing tool is déjà vu all over again! Grossly unfulfilled dreams of an easy bet. The big win for Neiss, and the acceptance in the US to crowdfunding for investors in the JOBS initiative as a way to own a piece of a business just simply would never work in Canada. The US passes a law and then lets the litigators work out the details. In Canada, we are a people who legislate for security, and securities—for the greater good.
The US fixation is about the ability to treat contributors as investors…and it is driven by the big gamble on financial reward. Instead of start ups chasing investors, we need to recalibrate the measures of success and use the platform to engage customers early in product development. See a great description of how the Crowdfunding platform could work by editor Brian Jackson at ITBusiness.ca Crowdfunding complements ‘lean startup’ approach and reduces risk.
This approach is less distracting from our interest in the social enterprise application of the crowdfunding platform…in which case individuals may contribute funds as a charitable donation or act of good will (good to have charitable status but that is another layer of complexity) without any expected payout in the short term. Make Good Happen. It is in keeping with the fundamental tenet of the medium that the platform operates on…the social platform.
Crowdfunding for social enterprise is an attractive and very acceptable approach already well developed and utilized in Canada. With some great platforms developed by Canadians in Canada. For example, we are implementing a crowdfunding project now using the great platform developed by Ottawa based Paul Dombowsky’s Ideavibes. And if you’re just looking for more info on crowdfunding, the Ideavibes website has some great whitepapers that you can access. Love finding these companies who see themselves as part of the solution.