Crowdfunding: An Interesting Source of Financing for Enterprises
Crowdfunding allows promoters to carry out their projects thanks to financial contributions from backers. In exchange, they will receive a benefit, product or service once the goal is reached. In Quebec, one of the leaders in this type of financing is La Ruche, a non-profit organization that was founded in 2013.
La Ruche is present in 9 of the 17 regions of Quebec and plans to serve all regions by 2023. It currently offers two interesting funds for promoters wishing to have a positive impact on young people in their communities: the MILLE et UN Fund for Young People (FM1) and the COVID-19 MILLE et UN Fund for Young People (COVID-19 FM1).
The MILLE et UN Fund for Young People (FM1)
The FM1 includes a budget envelope of more than $10 million over five years to support the projects of young people in Quebec.
A person can submit a project in a personal capacity, as a freelancer and, in the case that interests us, as an enterprise (any form of legally incorporated business). To be eligible for the FM1, the project must meet various criteria, the main ones being as follows:
- Have a goal to achieve (with start and end dates);
- Target mainly young people aged 15 to 29 years and have a significant impact on them;
- Meet at least one objective of the 2030 Québec Youth Policy;
- Have a financial need between $10,000 and $200,000 and present a detailed budget.
As in all crowdfunding campaigns, project promoters will only receive the money if the campaign goal is reached within the specified time frame. Other conditions are involved, such as having a minimum number of backers (determined based on the amount of the campaign) as well as at least one contribution made by an enterprise.
One year of the fund is currently over, there are still four years remaining.
The COVID-19 MILLE et UN Fund for Young People (COVID-19 FM1)
As the name suggests, the COVID-19 FM1 was put in place to meet the needs of organizations that provide services to young people in the context of COVID-19. The Fund includes a budget envelope of $500,000, which comes from the FM1 and makes it possible to finance projects valued between $5,000 and $50,000.
Exceptionally, projects financed by the Fund can keep all the money raised, on condition that at least 50% of the funding goal has been reached. Another difference is that rather than aiming for the development of time-bound projects, the COVID-19 FM1 can make it possible to address a lack of liquidity caused by COVID-19 or to develop a new project to meet a need created by the pandemic. Here are some of the main eligibility requirements for the Fund:
- Develop a project mainly targeting people aged between 15 and 29 years;
- Not having obtained funding through the FM1 for a project with similar objectives and impacts in the past;
- Meet at least one objective of the 2030 Québec Youth Policy.
The COVID-19 FM1 is still active, but the La Ruche team is unable to say exactly for how long it will remain in effect.
Regardless of whether it is for a project eligible for the Fund or for any crowdfunding project, the La Ruche team offers support to project initiators to ensure the maximum success of their campaign. For more information or to verify your project’s eligibility for the Fund, we encourage you to visit its website.
For any economic development project, be it a business start-up or expansion project or a project propelled by the community, the FNQLEDC’s Advisors can assist you in your efforts, in collaboration with the La Ruche team. Do not hesitate to call on our Advisors.