Crowdfunding is a great way for businesses to raise a small
amount of money from a large group of people to help fund a new
business venture. However, businesses who use crowdfunding to raise
capital by issuing securities in exchange for the money raised need
to make sure they are not violating any securities laws by using a
registration and prospectus exemption available in their
jurisdiction. There are currently two exemptions from prospectus
and registration requirements under securities laws in Canada for
crowdfunding, start-up crowdfunding and equity crowdfunding.
Start-up crowdfunding
The first exemption is for start-up
crowdfunding, available for start-ups and early stage issuers
looking to raise capital. This exemption is currently available in
British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New
Brunswick and Nova Scotia. Start-up crowdfunding allows companies
to raise small amounts of capital by selling securities without
filing a prospectus. A
