Equity Crowdfunding in Canada
On November 5th, Ontario and four other provinces introduced Multilateral Instrument 45-108 Crowdfunding, thereby paving the way for entrepreneurs and small businesses to more easily raise capital in Canada through Internet and social media channels. The Canadian regulators have been far more cautious than the U.S. in their approach to crowdfunding, but after much debate and analysis we are opening the gates to this lower cost capital. There are restrictions on this funding (in Ontario, an issuer can only raise $1.5 million through crowdfunding; a non-accredited investor is limited to $2,500 per investment or $10,000/year, whereas an accredited investor is limited to $25,000 per investment or $50,000/year). This is yet another example of how the Fintech industry is helping transform the financial services industry – ultimately I believe, for the benefit of both the consumer and the financial institution.