Crowdfunding has quickly become a popular method of raising
capital on the Internet, and can lift small and medium-sized
companies off the ground. After a long wait, Kickstarter opened to
projects from Canadian-based project creators in September 2013.
More than $3.2 million CAD was pledged for Canada-based creators in
the first month.
Crowdfunding in Canada remains limited to non-equity
funding. For example, in Ontario, currently, the sale of
equity requires the issuer to file a prospectus or rely on an
existing prospectus exemption category. Crowdfunding by issuing
securities is prohibited as a result.
The possibility of equity crowdfunding may be on the horizon in
Canada. In December 2012, the Ontario Securities Commission
(OSC) published a consultation paper outlining possible new capital
raising prospectus exemptions in Ontario, including addressing the
sale of equity through online crowdfunding platforms. The proposed
crowdfunding exemption would allow an
