An excerpt from: http://www.montrealgazette.com/Business/piper/6717027/story.html
Ottawa Company proves CATA’s point
By Vito Pilieci, The Ottawa Citizen June 1, 2012
Ottawa firm Teknision Inc. has become the latest company to leverage American crowd funding service Kickstarter to raise investment. The Canadian Advanced Technology Alliance (CATA) has been trying to draw attention to the mass exodus of startups to U.S.-based crowd funding sources.
The technology lobby group believes the trend threatens to hollow out the country’s economy of promising young technology talent. To list on Kickstarter, Teknision had to set up a U.S. mailing address as well as U.S. banking accounts.
Teknision makes software that allows Android tablet users to customize their home screen. The company has raised more than $46,000 U.S. from just under 5,000 people by pre-selling its software.
Many Canadian companies have either set up U.S. mailing addresses and bank accounts or moved to the U.S. to take advantage of services like Kickstarter. Vancouver-born and University of Waterloo-educated Eric Migicovsky set up his company, Pebble Technology, as a business in Silicon Valley. The firm is making a watch that can “talk” to a person’s iPhone or Android phone wirelessly and send updates. He was looking to raise $100,000 U.S., but thanks to crowd-funding, Migicovsky ended up attracting $10.3 million U.S. by pre-selling his watches over the service.
The use of social media to raise money for businesses is accelerating. In April, U.S. President Barack Obama signed the Jumpstart Our Business Startups (JOBS) Act that contains new crowd-funding provisions. The changes allow small startups to bypass financial markets and traditional methods of attracting investment and sell up to $1 million worth of equity in their businesses to large pools of individual investors using social media.