You might have heard the British Columbia Securities Commission and other regulators from certain jurisdictions have adopted start-up crowdfunding exemptions.
Crowdfunding has been a popular way to raise money for some time. The model you are most likely familiar with is crowdfunding by way of donation or pre-sale, in which you donate money via the Internet to a project like a film, cultural event, or product pre-order. In return, you may get your name in the credits, a copy of the film, or the manufactured product.
Under this model, which co-exists with the new start-up crowdfunding exemptions, businesses are not offering securities (such as shares or bonds), so they do not fall under Canadian provincial or territorial securities laws.
The new start-up crowdfunding exemptions allow companies to raise money by offering investors securities. Canadian Securities regulators refer to this as the securities crowdfunding model – it’s also referred to as equity crowdfunding. In this type of crowdfunding, a start-up or early-stage business solicits funds from investors through a website, known as an online funding portal, in exchange for its securities.
Before you invest in a securities crowdfunding campaign, you should do your research. These investments are high risk and you could lose your entire investment.
There are a number of new and updated resources available to investors interested in learning more about crowdfunding. They are:
a new guide with information on how crowdfunding investments work
an updated Private Placement Market webpage with information about the new start-up crowdfunding exemptions
If you have any questions about the new start-up crowdfunding exemptions, please call BCSC Inquiries at 604-899-6854 or 1-800-373-6393, or email us at [email protected]
The Globe and Mail’s Rob Carrick recently wrote about how unhappy many boomers are today about their lacklustre portfolios, just at a time when they are seriously considering retiring or have already made that decision. A recent comment on our Facebook page reflects this concern as well. For years, myself included, we counted on our […]
Last month, we ran a four-part blog series to raise awareness around the financial abuse of elders. Even though June 15 is officially World Elder Abuse Awareness Day, we want to reach out to let people know there is information available to them year-round. One great example is the City of Surrey’s Seniors Advisory and […]