Crowdfunding in Canada: How to Get Funding Online
Crowdfunding has become a powerful tool for entrepreneurs, startups, and non-profits in Canada looking to raise funds online. Whether you’re launching a new product, starting a business, or funding a social cause, crowdfunding platforms provide access to a large pool of potential backers. However, success in crowdfunding requires strategic planning, a compelling campaign, and the right platform.
In this guide, we’ll explore how to get funding online through crowdfunding in Canada, including popular platforms, best practices, and key legal considerations.
What is Crowdfunding?
Crowdfunding is a method of raising money from a large number of people, typically via the internet. Instead of relying on traditional loans or investors, individuals or businesses can pitch their ideas to the public, who then contribute funds in exchange for rewards, equity, or simply to support a cause.
Types of Crowdfunding
There are four main types of crowdfunding in Canada:
- Reward-Based Crowdfunding – Backers contribute money in exchange for a product, service, or experience (e.g., Kickstarter, Indiegogo).
- Equity Crowdfunding – Investors receive a share of ownership in the company (e.g., FrontFundr, Equivesto).
- Donation-Based Crowdfunding – Supporters give money without expecting anything in return, often for charitable causes (e.g., GoFundMe, CanadaHelps).
- Debt-Based Crowdfunding (Peer-to-Peer Lending) – Businesses or individuals borrow money from multiple lenders and repay with interest (e.g., Lending Loop).
Best Crowdfunding Platforms in Canada
1. Kickstarter
✅ Best for: Creative projects, technology, and product launches.
✅ Model: All-or-nothing (You only get the funds if you reach your goal).
✅ Fees: 5% platform fee + payment processing fees.
2. Indiegogo
✅ Best for: Startups, entrepreneurs, and innovative products.
✅ Model: Flexible funding (Keep funds even if the goal isn’t met) or Fixed funding (All-or-nothing).
✅ Fees: 5% platform fee + transaction fees.
3. GoFundMe
✅ Best for: Personal, charitable, and community projects.
✅ Model: Keep what you raise (No funding target required).
✅ Fees: 0% platform fee + payment processing fees.
4. FrontFundr
✅ Best for: Startups and businesses looking for investors.
✅ Model: Equity crowdfunding (Investors get a share in the company).
✅ Fees: Varies based on campaign and legal requirements.
5. Lending Loop
✅ Best for: Small businesses needing loans.
✅ Model: Debt-based crowdfunding (Businesses borrow money from multiple lenders).
✅ Fees: Interest rates vary based on credit assessment.
How to Launch a Successful Crowdfunding Campaign in Canada
1. Define Your Funding Goal
Set a realistic financial target based on production costs, marketing expenses, and platform fees. Be transparent about how the funds will be used.
2. Choose the Right Crowdfunding Platform
Select a platform that aligns with your project type. For example:
- Creative projects? → Kickstarter or Indiegogo
- Charity or personal causes? → GoFundMe
- Startup funding? → FrontFundr (equity) or Lending Loop (debt)
3. Create a Compelling Campaign Page
Your campaign page should include:
✅ A catchy title and engaging visuals.
✅ A clear and emotional story explaining your project.
✅ A video pitch (campaigns with videos raise 105% more on average).
✅ Detailed funding breakdown to show transparency.
4. Offer Attractive Rewards (If Applicable)
If using reward-based crowdfunding, provide appealing incentives such as:
- Exclusive discounts for early backers.
- Limited-edition products or experiences.
- Personalized thank-you messages.
5. Promote Your Campaign
Crowdfunding success depends on marketing. Strategies include:
📢 Social Media Marketing – Share updates on Facebook, Twitter, LinkedIn, and Instagram.
📩 Email Outreach – Engage your network through newsletters and personalized emails.
🎥 Live Videos & Webinars – Build trust and excitement through interactive content.
📰 Press & Influencer Partnerships – Reach a wider audience by getting featured in blogs or media.
6. Engage with Your Backers
✅ Respond to comments and questions quickly.
✅ Provide regular updates on campaign progress.
✅ Show appreciation to donors through personalized messages.
7. Plan for Post-Campaign Fulfillment
If offering rewards, ensure timely delivery. If equity crowdfunding, communicate with investors on business progress and returns.
Legal Considerations for Crowdfunding in Canada
📌 Regulatory Compliance – Equity crowdfunding is regulated by the Canadian Securities Administrators (CSA). Startups raising investments must follow securities laws.
📌 Taxation – Funds raised through crowdfunding may be taxable depending on the type of campaign. Consult a tax professional for guidance.
📌 Intellectual Property (IP) Protection – If launching a product, consider patenting or trademarking your idea before sharing it publicly.
Success Stories: Canadian Crowdfunding Examples
🚀 Pebble Smartwatch – A Waterloo-based startup raised $10.3 million on Kickstarter, becoming one of the platform’s most successful campaigns.
🍁 Ceres Chill – A Canadian entrepreneur raised over $1 million for an innovative breastmilk chiller on Indiegogo.
💡 Chipolo – A smart Bluetooth tracker project that successfully funded on Kickstarter and grew into a global brand.
Final Thoughts: Is Crowdfunding Right for You?
Crowdfunding is a powerful way to raise money, validate ideas, and build a community around your project. However, it requires strategic planning, marketing efforts, and engagement with backers.
If you’re in Canada and looking to launch a crowdfunding campaign, take time to research the best platform, craft a compelling pitch, and actively promote your campaign. With the right approach, you can successfully secure the funding needed to bring your idea to life.
📞 Need help with funding research or crowdfunding strategy? Contact Axxes Business today! 🚀
