The Ontario Securities Commission ("OSC") is actively
taking steps to make capital raising easier for start-ups. In late
2012, the OSC published Staff Consultation Paper 45-710, seeking
feedback on proposed new prospectus exemptions in Ontario. In a
recent announcement, the OSC has extended the deadline for
submitting comments to March 8, 2013.
The Consultation Paper seeks feedback from stakeholders on four
concept ideas:
- Crowdfunding
- Offering Memorandum prospectus exemption in Ontario
- Exemption based on investment knowledge
- Exemption based on registrant advice
If adopted, start-ups will particularly benefit from the equity
crowdfunding concept. Equity crowdfunding allows early stage
companies to raise funds from investors in return for an equity
stake in the company. Think "Kickstarter" with shares instead of
rewards. Subject to certain investor protection measures, issuers
would be able to make prospectus exempt securities offerings over
the
