Canada Revenue Agency To Treat Funds Obtained Through “crowdfunding” Activities As Business Income

Crowdfunding catches on in Singapore

The contributors would not receive any form of equity in the project. In effect, the CRA was dealing with a reward-based crowdfunding model. The CRA took the position that funds received by a taxpayer from such crowdfunding activities would generally be included as income from carrying on a business. In addition, the CRA was of the view that related expenses in respect of such crowdfunding activities (along with the cost to a business to provide donor gifts) would generally be deductible by the taxpayer as expenses incurred for the purpose of gaining or producing income. 2013 APFF Conference Federal Round Table More recently, the CRA addressed a similar factual situation at the 2013 APFF Conference Federal Round Table . In that case, for each $25 donation, the corporation would offer the contributor a gift (i.e., a reward) with a value of $10 (a copy of an album with a cost of $6 per unit to the corporation).

Much of crowdfunding’s appeal is the freedom it gives to run the business independent of guys in suits. But having hundreds or thousands of investors can be just as restrictive as a single investor. Engagement doesn’t end when the target goal is reached. It’s just begun. Communicating with all of them is a labor-intensive and important process. Crowds are volatile. Faceless crowds can giveth and taketh.

A Reality Check on Crowdfunding

If people like the campaign, they can pledge money to make it happen. Pirate3D, having raised US$1.44 million for its 3-D printer The Buccaneer, is Singapore’s top crowdfunded campaign on a global platform. It is also the only Singapore-based company that earned a spot (No. 20) on Entrepreneur Magazine’s 2013 list of Top 100 Crowdfunded Companies. “Apart from Pirate3D, I don’t think there has been any other high-profile product or service that got funded,” said Mr Julian Low, entrepreneur-in-residence at Red Dot Ventures. Said Mr Alok Mishra, co-founder of B2B mobile advertising app Notiphi: “I don’t think crowdfunding has really even taken off in Singapore. Even within the start-up community and early adopters, the buzz is somehow missing.” Mr Low said: “I think the problem lies in the fact that (No. 1 platform) Kickstarter is a lot larger than the next biggest platform. And Kickstarter requires you to have a US or Canadian presence, so it’s disadvantageous to non-Western tech companies, many of which are innovative and competent in their own right.” To address this gap, more crowdfunding platforms have been staking their presence here to attract local campaigners.

Crowdfunding Expert Kendall Almerico: Creating a Social Media Plan of Attack For A Crowdfunding Campaign

“It is designed specifically to allow fans to invest in individual projects rather than in the club as a whole. “As well as giving them an opportunity improve facilities and their own match experience, it also gives them a say in how their club is run and other tangible benefits including tickets, hospitality and signed kit.” Fans can invest in one or more of the three individual development projects. The shop will cost 25,000 to build, a further 50,000 is needed for a new cafe bar and 100,000 will result in all three facilities completed. Two lower league clubs south of the border, Darlington and Kettering Town, have used crowdfunding to stave off bankruptcy but Squareknot says this is a different model designed to “help financially stable clubs to improve facilities and attract new fans”.

East Fife football club asks crowd for funds

David Muir goal

Flaunt Yourself on Facebook.”There are lots of social media platforms out there, but Facebook is the undisputed leader of the pack,” Almerico says. How can your crowdfunding campaign benefit from it? “Set up a Facebook page for the crowdfunding project, link it to your funding portal profile, and ask for Likes and comments from core supporters and their networks.” As the crowdfunding project progresses, use the Facebook page to post updates as they happen, and be sure to respond to and interact with each and every person who comments or sends you a message. 2. Let the Little Birdy go Tweet Tweet Tweet. Twitter offers an awesome way to generate awareness and excitement about your project, so be sure to enthusiastically share every milestone with your followers. “You can also reach potential donors with a Twitter search using terms that match your niche and then send a tweet with a link to your project page to prospects,” Almerico suggests.


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