Download - ECFA Toronto Conference Portal Presentation
The Portals - What is Happening In Canada
2014 ANNUAL CANADIAN EQUITY CROWDFUNDING CONFERENCE Toronto, Ontario
April 24, 2014
The Portals - What is Happening In Canada
Moderator: ● Brian Koscak
● Partner at the law firm of Cassels Brock & Blackwell LLP located in Toronto, Ontario and practices in the area of corporate and securities law.
● Co-Chair, Equity Crowdfunding Alliance of Canada ● Chairman of the Private Capital Markets Association of Canada (formerly the
Exempt Market Dealers Association of Canada ● Member of the Ontario Securities Commission’s Exempt Market Advisory
Committee Brian can be reached by phone at 416-860-2955, by e-mail at [email protected] or on twitter @briankoscak. Brian also regularly writes about Canadian securities law matters on his personal blog at www.briankoscak.com.
The Portals - What is Happening In Canada Four Presentations & Panel Discussion Equity Crowdfunding Portals – How do they work? I A Restricted Dealer (Social impact issuer focus)
● Carlos Pinto Lobo, CCO, MaRS SVX II A Portal Working with an Exempt Market Dealer
● Sandi Gilbert, CEO, SeedUps Canada III Portal - Exempt Market Dealer (Pending)
● Tim McKillican, CEO, OpenAvenue (Real estate focus) ● Peter-Paul Van Hoeken, CEO, Silver Maple Ventures
IV Panel Discussion
Equity Crowdfunding Portals – How do they work? I A Restricted Dealer (Social impact issuer focus)
● Carlos Pinto Lobo, CCO, MaRS SVX
Moderator: ◦ Mark Skapinker
Speakers
What are the roles of Angels and VC in equity
crowdfunding
Welcom
SVX is registered as a restricted dealer with the OSC and AMF
Access: We are a single point of access to a diverse range of impact investment opportunities
Cost effective: Our services are
available at very low or no cost; thereby reducing transaction and operation costs.
An independent, values driven, non-profit organization: SVX is committed to supporting and enabling the growth of impact investing to benefit social, environmental and economic development.
Our Partners
Lack of Deal Flow: Given limited resources, impact investors cannot easily identify quality impact investments in order to make an appropriate investment.
Lack of Expertise: Impact investors do not always have the ability to prepare and conduct due diligence.
There is a tremendous opportunity in the growing marketplace: Currently the total Canadian impact investment market is $5.3 billion and is expected to grow to $30 billion in 10 years. The SVX provides a single access point to connect investors to ventures with robust information.
Governance & Management
• Ontario incorporated • Strong governance structure • Evidence of relevant expertise within
management and/or directors • Disclosure of any current or past legal actions
against management and/or directors
Impact
• Ontario-focused impact • Five (5) Key Performance Indicators (IRIS-
based if possible) • GIIRS, 3rd party rating (or B Corp), for social
purpose businesses • Impact narrative
Financials
• Revenue-generating ($50k - $25M annually) • Audited or reviewed financial statements • Pro-forma projections • Adequate current assets, fixed assets, or cash
reserves • Ownership information, including past and
current sources of capital
Other
• Complete business plan • External, professional references • Auditor/reviewer & legal counsel contact
information • Debt &/or equity capital need ($25k-10M for
ventures, $2-50M+ for funds) • IP & R&D information (if necessary should
venture not meet revenue requirements)
Ratings: For-profit organizations are required to complete either a Global Impact Investing Ratings and attain a score of 100,or be a B Corp.
Metrics: Each issuer is required to submit 5 key metrics.
Narrative: All issuers must have an impact narrative, which explains the impact they are hoping to achieve.
Outreach and Pipeline Building. We are continuing to build our pipeline of ventures, funds, investors and service providers.
Public Launch. We launched the SVX at the TMX on September 19th, and since then 12 ventures have placed their offering on the SVX with more in the background
Franchising. We are pursuing opportunities to franchise the platform in Canada, US, and around the world, and exploring leveraging the platform for other formats, including crowdfunding.
Carlos Pinto Lobo Chief Compliance Officer, SVX [email protected] [email protected]
Equity Crowdfunding Portals – How do they work? II A Portal Working with an Exempt Market Dealer
● Sandi Gilbert, CEO, SeedUps Canada
2014 Canadian Equity Crowdfunding Conference
Portals & the Exempt Market
Sandi Gilbert Founder SeedUps Canada
COO - The Exempt Capital Network Board Member – National Angel
Capital Association Co-Founder – Equity Crowdfunding
Alliance of Canada
Templates
• The private capital markets have been active – $142 Billion raised in 2011 – But … small business didn’t have much access to this capital
• The public markets haven’t been responsive to small business – No appetite for young, growing companies
• The ‘road show’ approach is tough for small business
How did we get here? It’s tough to raise capital … things had to change
Templates
• Like a dog to a bone … – I invested the last 24 months figuring it out – Met with regulators, small companies, venture capitalists, broker
dealers and peers across the globe
• How could we help small business gain access to the ‘ordinary’ investor – Investors wanted to be empowered
• How could we make it compliant?
The JOBS Act It got my attention
Templates
ECN • A collaborative platform for the Exempt
Market
Templates
ECN • A collaborative platform for the Exempt
Market
Templates
ECN • A collaborative platform for the Exempt
Market
Templates
ECN • A collaborative platform for the Exempt
Market
Equity Crowdfunding Portals – How do they work? III Portal - Exempt Market Dealer (Pending)
● Peter-Paul Van Hoeken, CEO, Silver Maple Ventures
April 24th, 2014
Silver Maple Ventures Inc.
Connecting ventures with the broader investor community
Equity Crowd Funding Alliance (Canada) - Conference Toronto
Presented by: Peter-Paul Van Hoeken
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Silver Maple Ventures Inc., Founder & CEO
Equity Crowd Funding Alliance (Canada), Co-Founder and Member Executive Council
Over 15 years experience in finance, investment management and business consultancy
International positions in banking Consumer Banking, Corporate & Investment Banking, Corporate Development
Management Consultant, The Netherlands
Masters’ degree Business Economics & Finance, Erasmus University Rotterdam, The Netherlands
Peter-Paul Van Hoeken
Silver Maple Ventures
• Connecting Companies with Investors (accredited and non-accredited)
• Realizing Funding from Pitch to Securities Purchase
• Building an online platform to connect companies with the broader investor community
• To be operated as registered Exempt Market Dealer
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Who is Silver Maple? Silver Maple Ventures
• Lack of access to early stage & venture capital
• Immature Market Place for early stage and venture capital
• Canadian venture capital is relatively small, immature and risk averse
The Problem for Companies
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Silver Maple Ventures
The Solution – The CROWD Even a small fraction of a percentage would make billions of
dollars available for venture investment (debt+equity)
Household Net Worth
CANADA U.S.
$6.4 trillion $64.8 trillion
$13 bn $130 bn
$32 bn $325 bn
$64 bn $648 bn
0.2%
0.5%
1.0%
Shift to investment
crowd funding
29 Sources: Bank of Canada, US Federal Reserve, Venture Capital & Private Equity Association (CVCA)
Venture Capital investments in Canada in 2013: $2bn….
Silver Maple Ventures
The Opportunity Creating a NEW ASSET CLASS accessible
for the crowds
Disruptive Technology Solutions, Social and Democratic financial eco-system
Driving Innovation and Canadian Businesses
Creating Jobs and Economic Growth
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Silver Maple Ventures
Silver Maple’s Solution Investments Only (debt and equity)
Investment Platform in support of
dealer activities
Transaction-Based Offering investment transactions through secured electronic payment environment
Standardized Investment Products
Standardized products Customization Investment Documentation Optional
EMD Obligations Know-Your-Product, Know-Your-Client and Suitability Obligation
Investor Services Online Investor portfolio and account services in partnership with Specialized Services Providers
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Silver Maple Ventures
Curation & Due Diligence
Highly Selective Criteria (Objective and Subjective). Internal Due Diligence, Optional third party assessment
Leveraging Angel/Venture Capital Expertise
Angel/Venture Capital
Investors Retail Investors + =
More money raised More companies
funded
Investment opportunities on platform subject to opinion and due diligence of lead investors
Supporting retail investors (less experienced) investors community in their decision-making
Real time tracking of subscription statistics (e.g. average, peak , distribution) during campaign
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Silver Maple Ventures
The Funding Gap
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Silver Maple Ventures
EARLY STAGE EXPANSION ACQUISITION/ BUY OUT
$5 Mil. $25K $20 Mil.
Credit Card, Friends &
Family
Seed Capital
Start-up Capital
Expansion Capital
3rd-4th Rounds/ Mezzanine
Close Business
Associates
Angel/Venture Capital, Junior
Public Companies
Private Equity & Public Financing
$500K
Focus Silver Maple
Funding Great Companies
• Silver Maple will soon operate in multiple Canadian cities
• On-the-ground vetting of companies and connecting with experienced angel & venture investors
• Silver Maple helps Startups and Small Medium Enterprises
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Silver Maple Ventures
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Silver Maple Ventures Inc. Contact: Peter-Paul Van Hoeken
604-787-2345
Thank You Silver Maple Ventures
peter-paul@frontfundr
Equity Crowdfunding Portals – How do they work? III Portal - Exempt Market Dealer (Pending)
● Tim McKillican, CEO, Open Avenue (Real estate focus)
Crowdfunding has the potential to transform real
estate investment Tim McKillican
President, Open Avenue April 24, 2014
Tim McKillican is the Founder and President of Open Avenue, an Ontario-based real estate crowdfunding platform (http://www.openavenue.com). Tim has a number of successful start-ups under his name, including Level Social Inc., a social media company. Tim is a University of Waterloo graduate in Computer Engineering and has been investing in real estate with Revel Development Corporation since its inception. Tim has a passion for disruptive technologies and is excited to bring new real estate investment opportunities to the mass market.
Crowdfunding brings investment opportunities to the masses
Do-it-Yourself-ers • Large capital
requirement • Knowledge • Time • Retail prices
Institutional (pension funds, REITs)
• Highly competitive • Lower yields
$100-500k $20M+
Bridge the Gap
Individuals pool together on attractive
investments with an experienced manager
Crowdfund investors provide equity investment
Project Value $5,000,000 Equity (Crowdfunding Investment)
$1,500,000
Debt (Mortgage) $3,500,000
Real estate investment has similar elements to traditional enterprise
Annual Revenue (Rental Income)
$400,000
Operating Expenses $120,000 Net Operating Income (NOI) $280,000 Mortgage Interest (Year 1) $138,000 Mortgage Principal (Year 1) $83,000 Annual Cashflow $59,000 Cash-on-Cash Return 3.9% Total Return (Year 1) 9.5%
Cash flow real estate investment does NOT rely on speculation or appreciation to provide reliable returns to investors.
Investors Have Protection Limited Partnership
Structure Investors own title to the
asset
Physical asset with legal recourse rights General Partner can be
removed
Audit
Limited Partnership
Investor Investor Investor
General Partner
Service Agreements
Crowdfunding technology provides transparent access to investments
Crowdfunding empowers the investor to build their community
Many local jobs and contracts for SMEs are created through a single project
Project Value $5,000,000
Construction Labour Costs $1,500,000
Professional Contracts $500,000 Development Fees to Municipal Gov’t
$600,000
Servicing Fees to Local Utilities $200,000 Land, Materials, Contingency, Soft Costs
$2,200,000 A single crowdfunded real estate project can create 30+ local jobs at $60,000
annually, plus contribute $800,000 to the local municipality.
Open Avenue: A platform to connect investors with real estate investment opportunities
Crowdfunding has the potential to transform real estate investment
www.openavenue.com
Equity Crowdfunding Portals – Panel Discussion
Questions for the Portals 1. What is the greatest challenge for portals under the
proposed equity crowdfunding rules? 2. What investor education initiatives are you
contemplating? 3. What will be the greatest challenge in ‘on-boarding’
issuers and what action will you be taking to address them?
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The Portals - What is Happening In Canada
THANK YOU