March 28th, 2017
Panel Raises Concerns About Equity Crowdfunding in Canada
Techvibes Blog | Sumari MacLeod | May 26, 2014
Vancouverites could be forgiven for taking crowdfunding for granted at this point. As the home of FundRazr, and the host of five startup incubators, the use of crowdfunding at both a micro and macro level is widespread.
But the entrenched model of VC investment still dominates—though this may not be the case for long. The Delta Vancouver Suites hosted a panel on Wednesday, May 21 that explored the development of crowdfunding as an investment platform, and what that meant to representatives of the different factions of the industry. As an ambassador of the National Crowdfunding Association of Canada, Bret Conkin of FundRazr (just nominated for a City of Vancouver Award of Excellence) served as MC for a panel that included Bill Tam of the BC Technology Industry Association, Alixe Cormick of Venture Law Corporation, GrowLab's Jonathan Bixby and FundRazr's Daryl Hatton.
Ian McKay, the CEO of the Vancouver Economic Commission, opened with a few words on their upcoming initiatives to bolster Vancouver's economy before passing the microphone to Leslie Rose, the Senior Counsel to the BC Securities Commission. Rose lead the audience through a breakdown of the current exemptions for crowdfunding, and the Saskatchewan model, which the BCSC first put on the table in March as a model that BC could try.
“We have heard a great deal over the past couple years that there are funding challenges," said Rose. "We are having difficulty designing exemptions from our requirements, to find the right balance for issuers to raise money quickly, but at the same time, making sure investors have what they need to make an investment decision. We put out a notice in March, at the same time the other provinces did, and we asked for comment as to whether we should adopt the Saskatchewan model.”
The Saskatchewan model would have issuers able to raise $150,000 twice a year, while investors would be limited to $1,500 per offering, making portals like FundRazr or Indiegogo have to emphasize that they were not offering investment advice, and ensuring that funds weren't available to the issuer until the funding round had closed. The BCSC is inviting comments until June 18, giving British Columbians just under a month to have their say.