Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Equity Crowdfunding, Alternative Funding
FrontFundr launches to provide investors and companies access to a new capital market
FrontFundr Release | Peter-Paul Van Hoeken | May 27, 2015
FrontFundr empowers regular people to act as ancillary ‘dragons’ in the private-sector investment den
VANCOUVER, BC (May 27, 2015) – May 27 will mark the launch of the much-anticipated financial technology platform, FrontFundr, which will unlock a new capital market and allow regular people to invest in private companies.
FrontFundr uses technology to enable entrepreneurs to raise money from a broad investor community. This is an opportunity for the general public to directly drive innovation and entrepreneurship. With FrontFundr, both experienced and regular investors are able to exercise positive influence on businesses they would like to support.
Previously, most Canadians were locked out from investing in young companies due to absence of an accessible market place and regulatory restrictions. On the other side, most early-stage companies looking for capital to grow their businesses had limited to no access to capital markets. This model left gaps in the growth-potential of early-stage companies, and it cut average citizens out of these investment opportunities.
“We’re giving regular people a chance to sit in the pitch seat and act as ancillary dragons,” says Peter-Paul Van Hoeken, CEO at FrontFundr. “We’re providing ordinary people with access to carefully screened investment opportunities, and entrepreneurs with access to more capital to support their growth.”
In traditional investment models entrepreneurs were limited to approaching angels and venture capital firms in hopes of finding much needed capital. This process of getting access to informal networks of a relatively small investor group requires a heavy investment of time and money. What’s more, it taps only a fraction of the world’s willing investors. FrontFundr is disrupting private-sector investing and bridging that gap. “We are offering an open market connecting seasoned investors and retail investors with stringently screened companies and supporting the entire investment process from pitch to securities purchase. Delivering better capital and better deals to all parties,” says Van Hoeken.
Regulators around the world are adopting new rules to allow companies to raise funds from investors through crowdfunding. The US Securities and Exchange Commission adopted rules this year allowing companies to sell as much as US$50 million of securities via the Internet. On May 14 2015, six provinces in Canada announced that they will allow young companies to raise up to CA$500,000 a year using a funding portal. FrontFundr is leveraging existing and new capital raising rules to offer its clients a broad range of funding and investment solutions.
FrontFundr’s investment opportunities are typically early-stage, mission-driven ventures seeking $200,000 to $2 million in capital investment. They have positive social impact and are predominantly from one of three key sectors: arts & entertainment, energy & environment, and technology. FrontFundr has already registered three businesses to raise capital through its platform, including RentMoola, InterLock, and Emergent Waste Solutions.
View: 6 Provincial Canadian Securities Regulators Adopt Crowdfunding
“We’re an innovative technology company and we work at a fast pace,” says Patrick Postrehovsky, CEO of RentMoola, a company that eases the pain of paying rent with rewards. “We’re excited to work with an exempt market dealer that operates similarly to the way we do—leveraging technology and innovation to disrupt an industry to the benefit of the public.”
FrontFundr is a fully compliant, registered exempt market dealer (EMD) and conducts stringent due diligence on all business investment deals presented to its investor community, and ensures both investors and entrepreneurs understand the risks and rewards associated with entering into a transaction. Visit FrontFundr.com to browse live investment opportunities.
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For more information or to set up an interview, contact Jeannine Bartz at jeannine@frontfundr.com or 604-306-0207.
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1100+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
Crowdfunding bid has high hopes
At some point this summer, Sean Sears hopes Canadian startups will be raising capital on his new crowdfunding platform, ICrowdx.
Sears and his colleagues at the Halifax investment firm-cum-startup lab Ogden Pond have been working on developing the online portal in preparation for regulators approving equity crowdfunding. Now that that has been achieved, they are in discussions with regulators on the details of letting companies raise capital online.
In addition to helping companies raise money, Sears believes ICrowdx will help investors to manage a portfolio of angel investments and communicate with their portfolio companies.
“The portal will be social,” Sears said in an interview. “It will create an instrument in which the investor has a direct line of communication with the company. And that flow of communication will be constant. It is also directly up the alley of the skills these companies have.”
Crowdfunding is the process of raising money online from a broad range of people. Although it has been used for charitable fundraising and early sales of products, regulators in six provinces (including Nova Scotia and New Brunswick) only this month first approved the practice for companies raising capital. No company can raise more than $250,000 in a single campaign, and investors are limited to maximum investments of $1,500 per company.
Sears said the restrictions are “brilliant” because they will force investors to hold a portfolio of startups rather than placing a heavy bet on one or two. Startups are inherently risky investments, and the restrictions force each investor to diversify, thereby reducing the risk.
ICrowdx immediately signalled that it will be among the first — if not the first — crowdfunding portal operating in Canada. The site will operate on a province-by-province basis and have staff in each jurisdiction in which it operates.
View: Exempt capital markets crucial to small business in Canada
Sears believes the equity crowdfunding will prove to be a largely local exercise in which entrepreneurs attract investment from their local communities. He wants staff on hand to help the entrepreneurs launch successful campaigns and to vet companies to ensure they’re suitable candidates for investment.
He said he’s aware of four other companies that are proposing equity crowdfunding portals in Canada, but all are either based outside the country or in Ontario or Alberta (two provinces that have yet to approve equity crowdfunding). That could open the way for ICrowdx to be the first to actually launch a functional portal.
Sears expects that he will have passed the regulatory hurdles within 60 to 90 days. The first portal may be in Saskatchewan, a province that has been leading the crowdfunding drive in Canada.
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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1100+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
Start-up crowdfunding prospectus and registration exemption adopted by certain CSA members
Stikeman Elliott | Vincent Laurin |
As discussed in a post last week, the securities regulators of British Columbia, Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia (the "Participating Jurisdictions") have implemented registration and prospectus exemptions intended to facilitate the ability of Canadian start-ups and early stage companies to raise capital through crowdfunding in the Participating Jurisdictions. These exemptions, enacted through local blanket orders (the “Blanket Orders”) in the Participating Jurisdictions, are further to the comments received as part of the consultation held in March 2014 and will expire on May 13, 2020. The conditions related to the prospectus and registration exemptions, summarized below, are outlined in Multilateral CSA Notice 45-316 – Start-up Crowdfunding Registration and Prospectus Exemptions – the Blanket Orders of each Participating Jurisdiction should be reviewed for the precise terms and conditions applicable to the use of the exemptions in such jurisdictions.
Prospectus Exemption
The prospectus exemption allows a non-reporting issuer, that is not an investment fund and whose head office is located in a Participating Jurisdiction, to issue eligible securities through online funding portals. The funding portals may either rely on the registration exemption contained in the Blanket Orders or they may be operated by a registered dealer that has provided certain written confirmations to the issuer. While issuers are exempt from the prospectus requirement under this exemption, they must produce an offering document in the prescribed form, which contains basic information about the issuer, its management and the distribution, including risk factors, how the issuer intends to use the funds raised and the minimum offering amount. Following the closing of the offering, the offering document must be filed with the participating regulator along with a report of exempt distribution.
This exemption applies only if certain conditions are met. In particular, issuers cannot raise aggregate funds of more than $250,000 per distribution and are limited to a maximum of two such distributions in a calendar year. Moreover, no investor will be allowed to invest more than $1,500 per distribution. Each investor must have a contractual right to withdraw a subscription by delivering notice to the funding portal within 48 hours of either the purchaser’s subscription or a notification by the funding portal of amendment to the offering document. The funding portal must return the funds within five business days of receiving notice from the investor. The distribution may remain open for a maximum of 90 days. Importantly, none of the principals(a promoter, director, officer or control person) of the issuer may be a principal of the funding portal. Finally, since the exemption is only available to non-reporting issuers, the eligible securities are subject to an indefinite hold period and can only be resold under another prospectus exemption, under a prospectus or four months after the issuer becomes a reporting issuer.
Also check out:
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[Big News]: 6 provinces approve crowdfunding, Ontario to adopt separate standards
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BNN Crowdfunding Segment - Road to Capital: Part 1 | Part 2 | Part 3
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Equity crowdfunding resources | 2015 Canadian Crowdfunding Directory
Registration Exemption
The registration exemption permits funding portals with a head office in Canada and a majority of Canadian residents as directors to facilitate distributions under the prospectus exemption without being formally registered, subject to certain conditions.
Notably, funding portals must deliver an information form and individual information forms for each of its principals to the securities regulatory authorities of the Participating Jurisdictions at least 30 days prior to facilitating its first start-up crowdfunding distribution. Furthermore, funding portals must not provide any advice to the purchasers and are not allowed to collect fees or commissions from investors. Additionally, the funding portals must not allow a subscription until the purchaser confirms its understanding of the offering document and the risk warning, both of which must be disclosed on the funding portal’s website. Other conditions required by the instrument include that the funding portals: (i) receive payment from investors electronically through its website, (ii) maintain books and records for a period of eight years from the date a record is created (which may be inspected by a participating regulator), and (iii) either release funds to the issuer after the minimum offering amount has been reached and provided that all 48-hour rights of withdrawal have elapsed, or return the funds to the purchasers if the minimum offering amount is not reached or if the start-up crowdfunding distribution is withdrawn by the issuer. A participating regulator reserves the right to notify the funding portal that it cannot rely on the registration exemption because its principals or their past conduct demonstrate a lack of integrity, financial responsibility or relevant knowledge or expertise.
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This week:
May 26 (Webinar): Learn how to build a crowd and nurture a customer and capital raising network
May 28 (Toronto): NCFA Summer Kickoff Fintech Crowdfunding Networking Event!
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
Exempt Capital Markets Critical for Small Business in Canada
Epoch Times | By Rahul Vaidyanath | May 22, 2015
Next wave, crowdfunding, a new task for already challenged regulators in fragmented system
By definition, the average Canadian hears very little about the country’s exempt or private capital markets. Not much is typically known about the raising of capital to fund the operations of small business as opposed to that of public companies that issue stock or bonds.
But private capital is critical for financing small business and entrepreneurship, and it ultimately leads to job creation. It also provides unique opportunities for wealthy investors.
The exempt capital markets feature higher-risk securities being sold to eligible investors without extensive public disclosure documentation. The investors, such as venture capitalists or private equity funds among others, can work closely with the small business or start-ups providing advice with the aim of improving the investment’s chance of success.
Small businesses and entrepreneurs cannot afford the cost of public disclosures, aren’t typically seeking the greater amount of funding sought in public markets, and don’t have the time or personnel to deal with the duties of being a public company. Their focus has to be on developing the business itself.
Growth in private market financing reportedly continues to exceed $100 billion a year, although consistent supporting data is lacking. This is an additional challenge in Canada, which doesn’t have a single national-level capital markets regulator like the U.S.’s Securities and Exchange Commission. Canada instead has separate provincial securities regulators.
As the exempt market continues to broaden, regulators have a difficult task to ensure an efficient market (transparency and pricing), investor protection, and cutting out misrepresentation.
Next Wave: Crowdfunding
Crowdfunding is a way of raising capital that makes use of advances in technology (Internet) and social media. Using online platforms such as Kickstarter and Indiegogo, small businesses can connect with a theoretically unlimited set of investors.
This new way to raise capital [crowdfunding] is taking the world by storm.
, Finance Minister, Canada
Canada’s finance minister Joe Oliver referred to new cooperation among several provincial regulators in his keynote address at the fourth annual PCMA Private Capital Markets Conference held Tuesday, May 19, at the Toronto Board of Trade.
“Just last week, six commissions [provincial securities regulators] agreed to a common set of rules for crowdfunding. This new way to raise capital is taking the world by storm,” Oliver said.
The change in the six provinces—British Columbia, Saskatchewan, Manitoba, Quebec, New Brunswick, and Nova Scotia—will be to allow equity crowdfunding so that early-stage investors can gain a share in the company. Previously, the rules only allowed crowdfunding investors to make donations or to receive rewards from the company such as its products.
MORE: 6 Canadian securities regulators to adopt start-up Crowdfunding Exemption
Now it can be likened to a retail investor having the same opportunity as a sophisticated institutional investor.
But with reward comes greater risk, and regulators are acting to protect investors by requiring the company to make some disclosures about itself including how it intends to use the funds. But these requirements are a far cry from a full prospectus in public capital markets.
Lack of Information
“The current state of data and information available on the exempt market is inadequate for informing any significant policy debate or for imposing new regulations,” writes Professor Vijay Jog in a University of Calgary School of Public Policy research paper.
Given this challenge, it is very difficult for regulators to get a handle on this market for the sake of investors. High net worth investors may be able to tolerate greater financial risks, but that doesn’t mean they have the sophistication to understand the risks in exempt markets. While progress is being made to broaden the applicability of crowdfunding, the overarching problem with regulating exempt capital markets in general is the lack of data.
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MPP, Hon. Brad Duguid Officially Opens the Inaugural 2015 Canadian Crowdfunding Summit on March 3, 2015 at MaRS Discovery to a sell out crowd.
Checkout: Video Recap | Storify | Sessions & Content Pack
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
Start-up Crowdfunding Exemption Adopted In Certain Canadian Jurisdictions
Dentons | Andrea Johnson | Last modified May 20, 2015
The Canadian Securities Administrators (“CSA”) and securities regulators of British Columbia, Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia (the “participating jurisdictions”), announced on May 14, 2015, the adoption of a start-up crowdfunding exemption (the “start-up exemption”) in each of the participating jurisdictions. This exemption is aimed at helping start-ups and early stage companies to raise capital, and represents an important step in modernizing the Canadian securities regulatory regime to reflect changes in technology and the growth of social media.
View: 6 Canadian provinces approve crowdfunding, Ontario to develop separate standards
The start-up exemption permits funding portals to facilitate the offering of securities by way of crowdfunding, subject to a number of conditions. The start-up exemption actually compromises two separate exemptions: (1) an exemption from the requirements to file a prospectus when issuing securities; and (2) an exemption from the dealer registration requirements for funding portals. Certain key elements of the start-up exemption are as follows:
- The issuer must be a non-reporting issuer (and cannot be an investment fund);
- The issuer’s head office must be in one of the participating jurisdictions;
- The issuer can raise a maximum of CA$250,000 per offering and can only conduct up to two offerings per year;
- An investor can invest no more than CA$1,500 per offering;
- While the offering must be completed through an online funding portal, the funding portal does not need to be a registered dealer. However, registered dealers can also operate funding portals as long as they still comply with their registration requirements under securities law and confirm they meet certain conditions provided in the start-up registration exemption;
- The issuer will not be required to provide investors with financial statements either at the point of sale or on an ongoing basis, but the issuer will be required to produce an offering document in the required form;
- Investors must be provided with a contractual right to withdraw within 48 hours of their subscription;
- The funding portal must deliver a funding portal information form to the regulators in the participating jurisdictions 30 days prior to its first start-up crowdfunding distribution;
- The funding portal’s head office must be located in Canada and the majority of its directors must be Canadian residents;
- The funding portal cannot provide advice to an investor, cannot recommend a security and cannot receive a commission or fee from an investor; and
- None of the promoters, directors, officers and control persons of the issuer can be a principal of a funding portal used to raise funds for that issuer.
The major changes to the start-up exemption since it was originally published for comment in March 2014 are: (1) an increase in the maximum offering size from CA$150,000 to CA$250,000 per offering with a limit of two offerings per year; and (2) allowing registered dealers to operate a funding portal. The start-up exemption will expire in five years on May 13, 2020.
Continue to the full article --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
Six provinces approve crowdfunding, Ontario to develop separate standards
The Globe and Mail | JANET McFARLAND | May 14, 2015
Small companies in six provinces will be allowed to raise capital through crowdfunding websites, but Ontario says it will not participate in the new rules and will develop separate standards.
Provincial securities regulators in British Columbia, Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia announced Thursday that they will allow startup and early-stage companies to issue shares to investors through crowdfunding websites, providing a new source of financing.
“Crowdfunding is an attractive way for startups to raise capital,” said Louis Morisset, chair of the Autorité des marchés financiers, Quebec’s securities regulator.
“This regime addresses micro-capitalization needs and issues, which are more local in nature and sometimes industry-specific.”
The rules will allow companies to raise a maximum of $500,000 in a year – but no more than $250,000 in one offering – through approved Internet funding sites. No individual will be allowed to invest more than $1,500 per distribution, and people will have the right to withdraw their investment offer within 48 hours.
Crowdfunding websites already allow people to make small donations to help companies raise funds, but Canadian companies were not allowed to issue securities that give investors a chance to own part of a company.
Breaking News (May 14, 2015): 6 Canadian Securities Regulators Adopt Start-Up Crowdfunding Exemption
Securities regulators around the world are facing pressure to allow companies to raise funds from investors through crowdfunding. The U.S. Securities and Exchange Commission adopted rules this year to allow companies to sell as much as $50-million of shares a year through crowdfunding sites.
The new Canadian rules will apply only to small startups and will not allow bigger companies that are already registered to distribute securities – known as reporting issuers – to participate. The six provincial regulators said they are still developing crowdfunding rules for reporting issuers, which they expect to be published separately.
Ontario said Thursday it would not participate in the new crowdfunding regime for startups but will instead continue to develop a broader crowdfunding rule to cover both startups and reporting issuers. The Ontario Securities Commission said it expects to publish a new rule this fall, which will follow the framework of a crowdfunding proposal unveiled last year for public comment.
Under that broader model, companies could raise far more money through crowdfunding – as much as $1.5-million a year – and investors could invest up to $2,500 in a single project, to a maximum of $10,000 a year.
The broader model would also require crowdfunding websites, known as portals, to be registered with securities regulators as a dealer, which is not required under the six other provinces’ crowdfunding model – though their regulators said they will have the right to stop a portal from operating if it is run by people whose past conduct demonstrates “a lack of integrity, financial responsibility or relevant knowledge or expertise.”
Continue to the full article --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 950+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.
[Breaking News]: Certain Canadian securities regulators to adopt start-up crowdfunding exemptions
CSA Press Release | securities regulators of British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia
MONTRÉAL, May 14, 2015 /CNW Telbec/ - The securities regulators of British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia (the "participating jurisdictions") today announced they have implemented, or expect to implement, registration and prospectus exemptions that will allow start-ups and early‑stage companies to raise capital through crowdfunding in these jurisdictions, subject to certain conditions.
These exemptions are further to the comments received as part of the consultation held in March 2014. Businesses wishing to rely on these exemptions will be able to conduct crowdfunding distributions in all participating jurisdictions.
"Crowdfunding is an attractive way for start-ups to raise capital. This regime addresses micro-capitalization needs and issues, which are more local in nature and sometimes industry-specific. Each member of the Canadian Securities Administrators was therefore able to consider the characteristics of its own market and choose whether to opt in to the exemption regime," explained Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. "Some participating jurisdictions continue to work on proposed Multilateral Instrument 45‑108 – Crowdfunding."
[Breaking May 14, 2015]: Nova Scotia Securities Commission Adopts Startup Crowdfunding Exemption
The start-up crowdfunding exemption is comprised of two exemptions: a prospectus exemption for start-ups seeking to raise capital and a dealer registration exemption for persons wishing to operate a funding portal. The conditions associated with these exemptions are outlined in Multilateral CSA Notice 45-316 – Start-up Crowdfunding Registration and Prospectus Exemptions. Registered dealers are able to operate funding portals that facilitate start-up crowdfunding distributions, subject to their registration obligations, including suitability.
A copy of the Multilateral CSA Notice 45-316 and exemptions are or will shortly be available on the participating jurisdictions' websites.
The CSA, the council of securities regulators of Canada's provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.
View: New Start-up Crowdfunding Exemption Adopted in some Canadian Jurisdictions
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For more information: |
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Sylvain Théberge |
Richard Gilhooley |
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Kevan Hannah |
Tanya Wiltshire |
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Shannon McMillan |
Andrew Nicholson |
SOURCE Autorité des marchés financiers (press release)
For further information: Sylvain Théberge Autorité des marchés financiers, 514 940-2176; Kevan Hannah, Commission des valeurs mobilières du Manitoba, 204 945-1513; Shannon McMillan, Financial and Consumer Affairs, Authority of Saskatchewan, 306 798-4160; Richard Gilhooley, British Columbia Securities Commission, 604 899-6713; Tanya Wiltshire, Nova Scotia Securities Commission, 902 424-8586; Andrew Nicholson, Commission des services financiers et des services aux consommateurs, Nouveau-Brunswick, 506 658-3021
