What is Start-up Crowdfunding?
You may have heard of crowdfunding as a way for small businesses or creative projects to raise funds online from the public. Traditional (non-securities based) crowdfunding usually raises money through donations or by pre-selling products.
Start-up Crowdfunding is slightly different as it is securities-based.
Instead of giving a donation or pre-purchasing a product, Start-up Crowdfunding is where individuals invest in a start-up or early stage company that is selling securities like debt securities (such as bonds) or securities giving the right to participate in future profits (such as shares). Investments are made on-line through a funding portal website.
Remember, Start-up Crowdfunding investments are risky – don’t invest unless you can afford to lose all the money you pay for the investment.
Why Start-up Crowdfunding?
In Canada, there are many rules and obligations for businesses that want to sell securities to the public. Start-up Crowdfunding Registration and Prospectus Exemptions have been introduced in Saskatchewan, British Columbia, Manitoba, Québec, New Brunswick and Nova Scotia (the participating jurisdictions) in order to make it less complicated and more cost effective for businesses to raise capital in those jurisdictions. Those businesses and funding portals wanting to use Start-up Crowdfunding are subject to the Start-up Crowdfunding rules and obligations.
Start-up Crowdfunding Funding Portals
The following is a list of Start-up Crowdfunding funding portals operating in Saskatchewan:
For information regarding Start-up Crowdfunding funding portals in other participating jurisdictions, please contact those jurisdictions directly.