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The Basics of Raising Capital: Exploring Crowdfunding and Impact Investing
“While there is not enough money in foundation and government coffers to meet the defining tests of our time, there is enough money. It’s just locked up in private investments.”
Judith Rodin, President, The Rockefeller Foundation
Summary
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What is the objective of this session?
Crowdfunding
Impact Investing
SVX
Questions
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What is crowdfunding?
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Crowdfunding offers entrepreneurs a new means of raising funds via online communities and social networks to a single request location, providing multiple channels to connect with a vast group of potential funders and/or investors.
Crowdfunding What is crowdfunding?
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Crowdfunding What is the basic process for crowdfunding?
1. Research: Do your research 2. Platform: Select your platform 3. Pitch: Develop your pitch 4. Target: Set your funding target 5. Animate: Animate your campaign
and connect with investors 6. Target: Hit your target 7. Funds: Access your funds (minus
any applicable fee)
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Donations: Straight donation funds for start-up, project or growth financing (Note: Sector agnostic)
Pre-sales: Pre-sell products or product licenses
Private investment: Debt and equity offerings for accredited investors
Retail crowdfunding: Already possible in the UK, and in the US (January 2013), but not in Canada
Crowdfunding What are different crowdfunding models?
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Crowdfunding Why does crowdfunding matter to you?
Crowdfunding provides a tremendous opportunity for entrepreneurs to: expand your investor base beyond friends
and family explore alternative forms of financing for
start-up or growth promote your business and expand your
supporter/customer base
Crowdsourcing.org predicts that the amount of money raised by crowdfunding platforms during 2012 will reach $2.8 billion, up 91% since 2011.
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What is
impact investing?
Impact Investing
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What is impact investing?
Profit
Planet People
Impact investing (or social finance) is an investment approach to solve social or environmental challenges while generating financial returns. This includes investments that range from producing a return of principal capital to offering market-rate or even market-beating financial returns.
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Impact + Return
Poverty reduction
Carbon reduction
Jobs for marginalized populations
Social housing units
Energy efficiency
1% p.a. over three years
Prime + 2%
8%
Poverty
Climate change
Energy demand
Public & private sector transition
We are faced with seemingly intractable social and environmental problems at a global and local level.
Canadian marketplace estimated at ~$2-4
billion in assets, projected to grow to $30
billion over next 10 years
Global marketplace is estimated at $100
billion, projected to grow to $400 billion over
next 10 years
History: Canada has a long history of social
finance activity
Key sectors: Clean technology, sustainable
agriculture, and affordable housing
Strong interest amongst governments and
institutional investors, with pioneering
efforts from leading foundations and
individual investors
Impact Investing What are the characteristics of the social finance marketplace?
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Impact Investing Why does impact investing matter to you?
You can make money and do good: There are a growing number of entrepreneurs that are building successful business models that tackle our most pressing problems.
Follow the money: A large and growing number of investors are looking for opportunities to invest for impact.
Solve the pipeline problem: The greatest challenge for investors is finding opportunities to invest for impact.
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What is the SVX?
SVX is a new impact investing platform connecting impact ventures, funds, accredited investors, and service providers to catalyze debt and equity investments that generate social and/or environmental impact alongside the potential for financial return.
Ventures Access to capital Transaction cost Capital raising expertise Investors Identifying viable
opportunities Cost of due diligence
SVX What key problem is the SVX trying to solve?
SVX What are the key functions of the SVX platform?
