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 Commissions Exempt Market Advisory
Committee

Brian can be reached by phone at 416-860-2955, by e-mail at
bkoscak@casselsbrock.com 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, 3
rd
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 19
th
,
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
Carlos.pintolobo@svx.ca
cpintolobo@marsdd.com


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 didnt have much access to this capital
The public markets havent 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?
Its 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 J OBS 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 24
th
, 2014
Si l ver Mapl e Vent ur es
I nc .
Connecting ventures with the broader investor community
Equity Crowd Funding Alliance (Canada) - Conference Toronto

Presented by: Peter-Paul Van Hoeken
26
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
Si l ver Mapl e Vent ur es
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
27
Who is Silver Maple?
Si l ver Mapl e Vent ur es
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


28
Si l ver Mapl e Vent ur es
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.
Si l ver Mapl e Vent ur es
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
30
Si l ver Mapl e Vent ur es
Silver Maples 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
31
Si l ver Mapl e Vent ur es
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
32
Si l ver Mapl e Vent ur es
The Funding Gap
33
Si l ver Mapl e Vent ur es
EARLY STAGE EXPANSION
ACQUISITION/
BUY OUT
$5 Mil. $25K
$20 Mil.
Credit Card,
Friends &
Family
Seed
Capital
Start-up
Capital
Expansion
Capital
3
rd
-4
th
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


34
Si l ver Mapl e Vent ur es

35
Silver Maple Ventures Inc.

Contact: Peter-Paul Van Hoeken
604-787-2345
pvanhoeken@silvermapleventures.ca
Thank You
Si l ver Mapl e Vent ur es
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 $5,000,0
00
Construction Labour Costs $1,500,0
00
Professional Contracts $500,000
Development Fees to
Municipal Govt
$600,000
Servicing Fees to Local Utilities $200,000
Land, Materials, Contingency,
Soft Costs
$2,200,0
00
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