Crowdfunding Toronto restaurant expansion for Fonda Lola


Hopefully they have better luck than this wonderful restaurant. That was at least the second failed Kickstarter they’ve run: I suspect that crowdfunding local business is heavily dependent on the internet penetration in the city, which in Tucson is very, very low. For instance, probably less than a third of rental properties in this town are advertised online, which I found astounding and appalling when I first moved here.

I don’t know if the indiegogo page was updated after being launched (though I would bee a little shocked if indiegogo had allowed the page to launch with the language quoted), but they aren’t issuing shares, as I’m pretty sure it would be illegal to do so (even though the US has made noises about relaxing securities laws to allow for this kind of crowdfunding that would give backers an interest in profits): they’re issuing memberships that carry your typical kickstarter-type benefits.


It’s inaccurate to say they’re selling “shares” - what they are actually selling is gift cards that come with perks, which they call memberships. Shares implies an investment with a return - a fractional ownership of the business, a share of the profits.

Edit: @bwv812 beat me to it. And is right in saying that it isn’t legal to sell shares through these kind of crowdfunding platforms under US law yet, though it could be soon. It will be interesting to see what kind of stuff happens on indiegogo and similar services when that happens - I suspect contributors will realize they’ve been [ripped off] by these “donation” schemes for the last few years and will start really looking at the valuation and return on investment.

Edit of the edit; corrected attribution


Not me, @bwv812

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Slur aside, I think that if “backers” start to approach kickstarter-style schemes with an eye to valuation and profit, then this will be an argument for a return to traditional securities laws (and disclosures) with regards to crowdfunded ventures.

Good point about the slur. Removed.

I don’t think we need the full level of regulation that current securities have to conform to - I think there is room for something more nimble, more accessible by small investors. But I do think there needs to be some level of disclosure and financials provided - it needs to be transparent and limited I. Terms of how much one person can invest, and also provide for some serious penalties for malfeasance.

Unless you’re an accredited investor ($200K income per person or $300K per couple, or $1M in net worth).
More all-encompassingly, JOBS Act title III regulatory rulings are scheduled for October 2015.

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