From cafes to comic books, Canadian businesses turn to crowdfunding

MONTREAL – It hasn’t been an easy ride for April Defalco and Stacey Bebbington since opening their kid-friendly cafe in 2010.

Six months after launching, La Tasse Gamine suffered flooding damage from a broken water main in front of their shop. They were forced to close for six weeks of repairs.

Then, last summer, after the business above their own was the target of an arson attack, the cafe was once again forced to shut its doors. The renovations — and some insurance wrangling —took eight months.

Now, like a growing number of Canadian entrepreneurs, Defalco and Bebbington are hoping an online fundraising campaign will allow them to keep their business running.

Banks weren’t interested in offering up a loan to a business that had closed several times over the past three years, so they decided to turn directly to their customers, Bebbington said.

La Tasse Gamine is trying to raise $15,000 on the site Gofundme to help pay the rent and staff. So far, it has raised about $3,000.

“Initially we were just going to close, and then we thought our customers would pretty be mad,” said Bebbington, who, like Defalco, holds down another job and has two children of her own.

“So we decided to reach out and give it one last try.”

Crowdfunding has gotten attention as a way for entrepreneurs to get a quick influx of cash. In return, investors often get first dibs on a product or other perks.

Last month’s Canadian debut of Kickstarter, the world’s largest crowdfunding platform, has brought even more attention to crowdfunding. The New York-based site has raised over $816 million US for more than 49,000 projects since it launched in 2009.

It joins other sites, such as Indiegogo, that already have a strong presence in Canada.

Thousands are seeking funding for a wide range of projects, from the quirky to the technologically groundbreaking.

Inventors from Saskatchewan, for instance, raised over half-a-million dollars to make affordable 3D printers, far exceeding their original goal. They got $50,000 in the first 24 hours on Kickstarter.

But it isn’t just tech startups and inventors using the model.

More traditional businesses, ones that may have difficulty getting financing from banks or government grants, are also experimenting with crowdfunding.

Earlier this year, customers of a popular Montreal flower shop, not far from Defalco and Bebbington’s cafe, banded together to help the owner recover from a devastating fire.

Dragon Flowers, located in the city’s trendy Mile End neighbourhood, got $15,000 to help with repairs.

Of course, crowdfunding isn’t the answer to all small businesses woes.

Dan Kelly, head of the Canadian Federation of Independent Business, said the vast majority will likely still require funding from traditional sources, such as banks.

“I suspect it will continue to grow but it will a remain a very marginal source of financing for smaller businesses,” Kelly said.

“If you are doing something that is very unique where it is of great appeal to consumers, or something that’s quite original, then I can see it being an option for you.”

One of the early darlings on Canada’s Kickstarter fits that description — it’s a campaign to revive a comic book character from the 1940s.

Rachel Richey and Hope Nicholson of Toronto want to create a 300-page, softcover collection of Nelvana of the Northern Lights, the comic book character remembered as “Canada’s first superheroine.”

Nelvana has a cult following and many, apparently, want to see their favourite character back in print, even though publishers showed little interest.

“They could have put out this brilliant piece of history and they didn’t. The comics just collected dust,” Richey said.

Crowdfunding, Richey said, has allowed for niche ventures, like out-of-print comic books, to get off the ground. And this way, they have complete control over the editorial process.

At La Tasse Gamine, Bebbington is hoping her customers see the value in their small, community oriented business. They hold classes and workshops in their large basement space.

Most of the cafe’s customers are moms on maternity leave, Bebbington said, and don’t have much disposable income. Clients are being asked to donate upwards of $20.

“We’re going to try to work with whatever we have,” she said.