March 23rd, 2017
B.C. Entrepreneurs Turn to Crowd-Funding For New Ways of Financing Startups
BC Business by Jacob Perry | July 3, 2013
B.C. entrepreneurs look to legalize financing through online platforms in the effort to kickstart budding healthcare ventures
A quirk in B.C.'s securities regulations has a group of Vancouver entrepreneurs looking to kickstart equity-based crowd-funding for high-tech ventures, a means of raising funds online from non-accredited investors that's currently illegal in Canada and the U.S.
Crowd-funding, or raising funds through the collection of small contributions using web platforms, has allowed online communities to promote and finance their projects, often with the help of social media channels.
B.C. companies involved in this kind of donation-based crowd funding have seen more success so far: Weeve.it, a social fundraising site for charitable causes, was acquired by LX Ventures Inc. in February, and Vancouver-based Fundrazr has helped causes listed on its site raise upwards of $20 million. For the world of crowd-funding, which doesn't promise gifts or the satisfaction of giving to a worthwhile project, B.C. investor Antonio Arias speculates it will be akin to traditional investing with a similar set of risks involved.
Arias is part of a group of B.C. financiers lobbying B.C.'s securities regulators to alter the rules around selling equity stakes to non-accredited investors via online platforms. Supporters of the change point to a tool in B.C.'s securities laws unique in North America that allows such investors to buy equity stakes in startups, but they hope to mainstream it and expand its use.