A new crowdfunding platform akin to Kickstarter or Indiegogo will launch this week with a focus on social innovation and offering a membership at an entrepreneurial hub.
Toronto’s Centre for Social Innovation (CSI) will be launching Catalyst March 20 and the Web site is online now, featuring five projects that have already begun fundraising activities. Catalyst is a perks-based crowdfunding platform specifically for entrepreneurs developing business models around solving social, cultural, economic, and environmental challenges. Typically these businesses are not only sustainable or profitable, but also have a feel-good benefit that addresses some need in the world.
Like similar sites Indiegogo or Kickstarter, Catalyst will allow businesses to ask for money before its product or service is available. Donators receive a reward based on the amount of money they give to the project, usually earning better rewards for putting in a bigger chunk of change.
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Businesses that tap Catalyst for crowdfunding will also receive a membership at CSI and have access to the physical locations, according to Barnabe Geis, communications lead at CSI. There are three locations in Toronto and soon to be one in New York City.
“The people on this platform will get all the benefits of CSI,” he says. “The working spaces, the mentoring, and the resources… that kind of social capital is an invaluable resource for people to get feedback.”
Those not based near a physical location will still enjoy a community membership and access the CSI’s Web services that are already offered to far-flung members. Services include a profile on CSI’s intranet, a subscription to members-only listservs, and the ability to promote business activities on CSI’s Web sites and e-mail newsletters.
The crowdfunding platform is being built out by resident CSI firm HiveWire Inc. After two years of researching crowdfunding, Asier Ania and Christopher Charlesworth launched HiveWire in the Spring of 2012.
“It exists as an organization to help unlock funding from the crowd,” Ania says. “We work with organizations that have an existing crowd to leverage these new and disruptive tools.”
HiveWire started as a crowdfunding site targeting the cleantech space (Ania has a Master’s degree in renewable energy) but after discussions with Tonya Surman, the CEO of CSI, the idea of a broader focus appealed to the duo.
“We literally ran into her at the coffee pot in the kitchen,” Charlesworth says. “We didn’t even know who she was, and we bonded over the topic of crowdfunding.”
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Two different fundraising options will be offered by Catalyst. An “all or nothing model” that will allow businesses to keep their funds only if they raise enough to meet or surpass the goal they set and charge a five per cent listing fee. The “keep what you make” model will allow firms to keep any funds, even if they fall short of the stated goal, for a higher fee of eight per cent.
Catalyst has already been successfully used by Cultivate Toronto, a non-profit organization seeking to convert an apartment roof into a rooftop garden and share the produce with the property owners. It raised more than its target of $2,600 from 33 donators in a beta test of the site last fall.
Projects on the site at launch include one that wants to provide youth in Ghana with tools to document climate change, a community TV project for Toronto neighbourhood Regent Park, and a bike-powered urban farm that turns urban backyards into bountiful gardens.
“The big difference is the real world aspect of this platform,” Geis says. “We’re offering the social capital and shared services that will help them have the impact they want to have.”
Aspiring musicians and movie makers have Indiegogo. Product and gadget makers have Kickstarter. Now social innovators have Catalyst.