Crowdfunding for business capital

Crowdfunding program gets attention from local CFDC manager.

Crowdfunding is making it easier for friends, family – and complete strangers – to donate money to a business, group or project they think is worthwhile, and Community Futures thinks it will be a good way for businesses and groups to raise capital.

The Stuart Nechako Community Futures  (SNCF) has launched InvestLocalBC.ca for local nonprofits, the arts communities and business startups to create online forums to fund, support and evolve their initiatives and projects.

Deb Arnott, local Community Futures manager, says she thinks it’s a great idea and has been looking into it further so she can start a similar program for local businesses. She says she’s just learning about it, herself.

According to her research, she says, if a business was looking at crowdfunding, a client who would like to, perhaps, launch a new product would have a choice. Depending on the business, they might offer some of that new product in return for a donation.

Or the business could say they were accepting pledges for startup capital. Depending on the amount of the pledge, the donor could become a shareholder of the business. If the business was not comfortable with that, they might offer something else in return for the pledge.

The business can be as  creative as they want, say Arnott. And it left her wondering:

“Who could I approach because I’d really really like to try to do one just to see how it would work,” she says. “I think I’m going to have a chat with some of the businesses.

“I’d really like to do a pilot and kind of see how it works and benefits the business and what the process was like for the business and what it was like for those who are pledging – those kind of things.”

She’s put it on her To Do list for the Spring.

“I see an opportunity for our small businesses, I really do,” she says, “and for our non-profits.

The project was initiated by Tom Bulmer, SNCF’s Community Economic Development co-ordinator, for their area. Arnott says that he wants to get local clients up so people can go to the site (www.investlocalbc.ca) and see what’s out there and how it’s going to work.

They don’t have to be a client, she says, but she needs to have dialogue with anyone wanting to get on the site. Such as dialogue about the paperwork that needs to be done before getting onto the site.

The whole idea is also a marketing tool for Community Futures, she says, to raise our profile about how we’re trying to support not only the non-profits but the businesses through this crowd funding.

Once a group or business is on the site, they have up to 90 days to raise their funds.

“I’m quite excited about this project,” says Arnott. “Running a private business and making a living – it’s pretty tough. And that’s why when this crowdfunding came out I was excited because I haven’t seen an initiative like this before to support small businesses.”