Comparison of Equity Crowdfunding Frameworks in Canada
Within a short span of time, Equity Crowdfunding has become very popular among entrepreneurs and emerged out as an important means of raising funds for early stage startups and businesses. In few words, Equity Crowdfunding can be explained as the process of raising capital by seeking small amounts from many investors in exchange for equity in the company. There lies the difference between other Crowdfunding models and Equity Crowdfunding. Equity being a financial instrument is subjected to rules and regulations from financial authorities and can be issued only when specific requirements are met.
In the past couple of years, after emergence of Equity Crowdfunding, many countries have been
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The Integrated Crowdfunding Prospectus Exemption or Crowdfunding Exemption Integrated Crowdfunding exemption or Crowdfunding exemption proposed in Quebec, Saskatchewan, New Brunswick, Manitoba and Nova Scotia also covers the exemptions provided under Ontario Securities Commission, so we will not discuss those exemptions separately except one which is Offering Memorandum Exemption.
To distribute securities through Integrated Crowdfunding Exemption, an issuer must do so through a registered online portal subject to certain conditions which are as follows:
Issuer Conditions:
• The issuer company must be based in Canada with its head office in Canada and most of its directors from Canada.
• A maximum of $1.5 million can be raised through this exemption.
• The exemption allows a broad range of securities to be issued ranging from common shares, preference shares to convertible and non-convertible securities.
• The exemption is not available to investment funds, real estate issuers, and companies without a written business