Christopher Charlesworth, CEO and Co-founder of HiveWire, Joins National Crowdfunding Association of Canada’s Advisory Board
March 24th, 2017
The StarPhoenix | By Joe Couture | October 8, 2013
A proposal to allow equity crowdfunding is intended to encourage young investors and entrepreneurs, says Dave Wild, chair of the Saskatchewan Financial and Consumer Affairs Authority.
"We think that it's a market that's been overlooked by us. We've tended to focus on larger businesses, the major players in our economy. And we've come to realize that there's a really important element of our economy to be found in young entrepreneurs, and we want young people to be interested in investing, as well," Wild said Monday.
Equity crowdfunding is different than crowdfunding in general. Activities like raising money online to publish a book or produce a record already occur, and they don't attract any particular regulatory attention, Wild said.
But equity crowdfunding - which involves the sale of shares in a company - isn't currently permitted, he explained.
"We'll be the first in Canada to allow it, but we expect other regulators to come along, and we think this is going to be something that takes hold in all of Canada. It's something that I think has come along because of the rise in e-commerce. It's become a pretty acceptable way of doing business now, to buy and sell online, and I think we've become much more comfortable with that marketplace."
Under existing securities laws, a business must issue a prospectus and sell shares through a licensed stock broker to raise capital, Wild said. Under the equity crowdfunding proposal, they would only need to fill out some documents before collecting investments through online portals.
The most a company could raise in one offering would be $150,000, and offerings would be limited to twice per year. The most an individual could invest in one company would be $1,500. Both of those limits are intended to help reduce the amount of risk involved, Wild said.
The FCAA launched a 30-day consultation period Monday, seeking input on its draft order.
"We think that we have the elements right, so we hope to hear from the general public and businesses on this. If there are no major changes to be done to this order, we can issue it very quickly and it can be in operation just as quickly as portals and small businesses can get up and running," Wild said.
Brennan Turner, president of FarmLead Resources, an online grain marketplace based in Saskatoon, said he thinks allowing equity crowdfunding would be positive for Saskatchewan.