 | Venture funding for start-ups in Canada has dropped by 80% from the glory days in 2000 according to the Canadian National Crowdfunding Association. As a result, it has become more difficult for SMEs to raise capital. However, for the summer of 2015, Canada can expect crowdinvesting rules to be implemented, making the market more efficient. |
This was stated by the Ontario Securities Commission last week. The new regime is mainly focused on start-ups and SMEs operating in Canada. It seeks to include a greater investor protection, by incorporating small business limits for non-accredited investors (99% of Canadians), by making it mandatory for the issuer to be organized under Canadian law and by obliging all investors to go through a registered portal for online investment. According to the Ontario Securities Commission, this will decrease the risk of fraud. Also, the aim is to raise the knowledge around the risk associated with crowdfunding investments through a certain risk acknowledgement form. Non accredited investors cannot invest more than $2,500 per investment.
This regime will also have benefits for fundraising businesses: in fact, they will have the possibility to raise capital from a larger number of investors, using securities regulated registered online investment platforms, guaranteeing safety in the process. The Ontario Securities Commission is positive for the future of this new source of finance and believes that the new regime will benefit all actors on the market.
References
Hurst, Samantha. February 20 2015. “Canada Can Expects Crowdfunding Rules This Summer”
Crowdfund Insider [http://www.crowdfundinsider.com/2015/02/63087-canadas-equity-crowdfunding-rules-set-may-be-published-this-summer/]
January 15 2015. “Backgrounder on Equity Crowdfunding in Canada”
Cloudfund [http://cloudfund.ca/news/backgrounder-on-equity-crowdfunding-in-canada/]
Camaria, Adrian. February 24 2015. “Ontario Securities Commission Updates Rules on Equity Crowdfunding, Start-up Capital”
Techvibes [http://www.techvibes.com/blog/rules-on-equity-crowdfunding-startup-capital-2015-02-24]
The National Crowdfunding Association Canada [http://ncfacanada.org/equity-crowdfunding/#]
Image credit to: John Ryan http://bit.ly/1MVgPog
This regime will also have benefits for fundraising businesses: in fact, they will have the possibility to raise capital from a larger number of investors, using securities regulated registered online investment platforms, guaranteeing safety in the process. The Ontario Securities Commission is positive for the future of this new source of finance and believes that the new regime will benefit all actors on the market.
References
Hurst, Samantha. February 20 2015. “Canada Can Expects Crowdfunding Rules This Summer”
Crowdfund Insider [http://www.crowdfundinsider.com/2015/02/63087-canadas-equity-crowdfunding-rules-set-may-be-published-this-summer/]
January 15 2015. “Backgrounder on Equity Crowdfunding in Canada”
Cloudfund [http://cloudfund.ca/news/backgrounder-on-equity-crowdfunding-in-canada/]
Camaria, Adrian. February 24 2015. “Ontario Securities Commission Updates Rules on Equity Crowdfunding, Start-up Capital”
Techvibes [http://www.techvibes.com/blog/rules-on-equity-crowdfunding-startup-capital-2015-02-24]
The National Crowdfunding Association Canada [http://ncfacanada.org/equity-crowdfunding/#]
Image credit to: John Ryan http://bit.ly/1MVgPog
 | About the author - Cecilia Lundborg Cecilia Lundborg is graduate student in Business Economics from Lund University, Sweden and has also studied International Business, Economics and Finance at the University of California, Los Angeles. Cecilia has a keen interest in international business and the online investment market. She is a currently working as a Trainee at Crowd Valley, doing research in the online investment market, writing reports to clients and is a writer for the Crowd Valley blog. Cecilia is passionate about the digital investment market and its global development. |
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