In a gallery space in Toronto’s west end in early November, about 70 people, drinks in hand, listen to Erin Millar speak.
“This is like a crazy mash-up of my life,” she says, noting there are old friends and new colleagues in the room. All of them are potential investors.
On Nov. 7, 2017, Millar, the editor-in-chief and CEO of Discourse Media, a media startup focused on in-depth reporting, launched a campaign to raise $1 million in growth capital to put her company on the path to expansion and profitability.
Since its official launch in 2014, Discourse Media has expanded rapidly, become a beacon of the potential for Canadian journalism startups. The company has expanded to 15 staff and three contractors, done collaborations with numerous media outlets, won awards for its reporting, and attracted international attention from for its innovative business model. In 2017, Discourse is tracking to have just under $1 million in revenue. The company is currently valued at $4.25 million.
That said, Millar told her Toronto audience Discourse isn’t interested in selling influence over communities they serve. So, it’s going the crowdfunding route—with a twist. Instead of using Kickstarter or Patreon models, which offer perks in exchange for financial support, Millar is offering actual investment in her company using FrontFundr, a platform that allows the public to invest in companies. Initial investments start at $250. So far, 91 people have invested just over $200,000. Millar believes Discourse Media is the first Canadian media startup to raise funds in this manner.
The other half of equity capital will be raised through traditional investment. A lead investor has already contributed $250,000 in the form of a convertible note. Millar hopes to raise the remaining $250,000 from angel investors.
With the funds, the plan, according to their FrontFundr page, is to “to build Canada’s largest community of engaged citizens through a membership-based service.” The idea, based on membership based revenue models used at De Correspondent in Holland, is to have members not just getting content to view, but put their dollars towards impactful journalism. A video produced by Discourse explains that the new digital platform will allow the public to collaborate with reporters.
Millar wants to add more staff in the coming years, and increase Discourse’s physical presence with 20 investigative units across Canada. Millar adds that they do not plan to do another financing drive until 2020. By then, they hope to have 30,000 members. (People who invest in this initial round also get a one-year membership and are recognized as founding members).
With a number of media outlets seeing revenue growth from membership and crowdfunding models, Millar believes conditions in this country are “ripe” for new media startups. While much of the narrative has been about the “death spiral” of news media in Canada, Millar told the audience that if there was no money in Canada, there wouldn’t have been the expansion of international outlets like the New York Times, BBC and The Athletic.
The end game for Discourse Media is to become a national investigative journalism outlet. Millar strongly believes Canadians want to be informed. “What we should be asking is: What do people need?”