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
The Exempt Market Dealers Association of Canada (EMDA) Announces its Name Change to the Private Capital Markets Association of Canada (PCMA)
CNW - PCMA Press Release | March 19, 2014
TORONTO, March 19, 2014 /CNW/ - The Exempt Market Dealers Association of Canada™ (the EMDA) is pleased to announce our change of name to the Private Capital Markets Association of Canada / l'Association du marché des capitaux privés du Canada. The PCMA was originally established in 2002 as the Limited Markets Dealers Association of Canada™.
Our members and supporters believe the new name better reflects our membership and our mandate, and will better capture the important role our members play in the capital markets. Capital raised in the private capital markets helps finance and develop some of the most critical and entrepreneurial industries across Canada and is an important contributor to creating jobs and wealth for Canadians. The PCMA name reflects a continuation of the leadership of the EMDA in bringing together many elements of the private capital markets into a stronger and more inclusive brand in support of the Canadian private capital markets industry.
Speaking of the changes, Geoffrey Ritchie, PCMA Executive Director, comments, "We are delighted to unveil our new name and website that will be the foundation of our growth plans in the years ahead. Since our Association was founded in 2002, we have steadily grown our membership, expanded our focus and clearly established our national voice in the Canadian capital markets. We have done so through the strength of our member firms and individuals across Canada and our national Board of Directors representing dealers, issuers and other industry professionals from coast-to-coast. Membership in the PCMA provides exempt market professionals access to a deep pool of capital raising professionals, experts in regulatory compliance, finance and legal services and a strong and effective national voice for the private capital markets industry."
The PCMA is focused on strengthening and developing the private capital markets to ensure robust capital raising opportunities across Canada and ensure Canadian investors have access to diverse private market investment options. The private capital markets provide investors with an opportunity to access a wide range of asset classes and investment options typically accessible to only the largest institutional investors.
Upcoming PCMA Initiatives for 2014
- Launch of the PCMA regional chapters across Canada.
- Launch of the redesigned Exempt Market Product (EMP) course in partnership with IFSE Institute (owned by the Investment Funds Institute of Canada (IFIC) which is the only prescribed proficiency course focused on the exempt market in Canada and designed for Dealing Representatives and Chief Compliance Officers of Exempt Market Dealers.
- PCMA industry magazine, comment letters to Canadian securities regulators and other advocacy work to advance the interests of the private capital markets.
- The 3rd Annual PCMA Private Capital Markets Conference, June 2, 2014.
- The 2014 PCMA Awards - Private Capital Deals of the Year.
- The Annual PCMA Compliance and CFO Financial Education Series in major cities across Canada.
About Private Capital Markets Association of Canada
Since 2002, the Private Capital Markets Association of Canada (PCMA) (formerly the Exempt Market Dealers Association of Canada™) has brought together exempt market dealers, exempt market product issuers, and professional advisers to the exempt market. The PCMA is the leading national industry voice for the exempt market to securities regulators, government agencies and the capital markets. The PCMA provides valuable services and benefits to its members, including: regulatory and compliance resources, opportunities for professional development and industry education, exclusive insurance programs, and access to a network of exempt market professionals from coast to coast. For more information visit www.pcmacanada.com.
Note: ™Exempt Market Dealers Association of Canada, EMDA and Limited Market Dealers Association of Canada are trademarks of the Private Capital Markets Association of Canada
SOURCE Private Capital Markets Association of Canada
Image with caption: "Private Capital Markets Association of Canada (CNW Group/Private Capital Markets Association of Canada)". Image available at: http://photos.newswire.ca/images/download/20140319_C5987_PHOTO_EN_38126.jpg
For further information:
For all media inquiries please contact:
Geoffrey Ritchie, PCMA Executive Director
geoffrey.ritchie@pcmacanada.com | 416.509.9179
For other regional media inquiries contact:
British Columbia
Maurice Levesque, PCMA Director
mlevesque@qwestfunds.com | 604.601.5802
Alberta
Doug Bedard, PCMA Vice Chair
doug.bedard@mnp.ca | 403.537.7683
&
Tim Kocsar, PCMA Vice Chair
tkocsar@walton.com | 403.781.6058
Quebec
Gilles Seguin, PCMA Director
Gilles.Seguin@bcf.ca | 514.397.5570
Atlantic Canada
Chris Dobbin, PCMA, Director
cdobbin@precipicecapital.com | 902.401.9480
U.S. Equity Crowdfunding 101: Is It Right For Your Startup?
Forbes | Eric T. Wagner Contributor | March 18, 2014
“I need capital, Eric.”
Sitting in my archives are hundreds of emails with the same plea.
And although my comeback tells entrepreneurs to bootstrap and run lean for as long as possible, there does come a time to seek the almighty buck.
Startup entrepreneurs can knock on the door of angels, venture capitalists, friends, banks or their Aunt Milly — but crowdfunding?
Judd Hollas, Founder and CEO of EquityNet, shares helpful details of crowdfunding so you can determine if it’s right for your startup.
To get your arms around this, last year the global online crowdfunding industry raised $5.1 billion for thousands of cash strapped businesses, charities, and startups. In fact, according to Massolution’s 2013 Crowdfunding Industry Report, equity-based crowdfunding raises 40 times more per company than any other type of crowdfunding in the marketplace.
Simply put, equity-based crowdfunding allows entrepreneurs to reach investors interested in purchasing equity in their startup or other privately held small business. In stark contrast to your average fundraising effort as seen on platforms such as Kickstarter and Indiegogo where founders do not give up a percentage of ownership in exchange for the cash.
View: Equity Crowdfunding Regulations in Canada - Frequently Asked Questions
If you ponder the launch of an equity crowdfunding campaign, here are the 3 types of equity crowdfunding, 4 tips to make the most of your efforts and 10 valuable resources to dig deeper:
Three Types Of Equity Crowdfunding
Equity I: Enacted as a result of the IPOnet, SEC No-Action Letter issued in 1996 — it allows for accredited investors to view private investment opportunities on a password-protected website. The vast majority of issuers who use Equity I rely on Rule 506 of Regulation D, which allows them to raise an unlimited amount of capital from an unlimited number of accredited investors. According to Hollas, this type of crowdfunding would suit entrepreneurs who want to avoid public exposure of their fundraising campaigns.
Equity II: Relies on Title II of the JOBS Act which went into effect last September and allows entrepreneurs to publicly advertise their need for funding. Founders who engage in Equity II can raise an unlimited amount of capital from an unlimited number of accredited investors — all done through equity crowdfunding portals which make it simple to advertise their offerings across the web. Becoming the most popular type of equity crowdfunding, it exposes entrepreneurs to a huge audience of potential investors. In fact, go this route and you can potentially share your business with 6-8 million accredited investors in the U.S.
View: U.S. Intrastate equity crowdfunding exemptions: 5 stage bills adopted and 16 pending
Hollas says “Entrepreneurs willing to publicly advertise their need for funding and who are also willing to take reasonable measures to confirm the accreditation status of potential investors are a good match for Equity II.”
Equity III: Expected to go into effect later this year, this type will allow unaccredited investors to participate — in other words, the 99% of investors. Allowing equity crowdfunding platforms to offer and sell securities online, entrepreneurs will enjoy the ability to potentially reach out to over 50 million Americans. Of course, exposure to a larger investor audience who might lack sophistication in investments also means entrepreneurs will have more regulatory requirements to manage.
Four Tips To Make The Most Of Your Fundraising Efforts
1. Create A Solid Business Model/Plan
Although I am a huge fan of a working business ‘model’ vs. a business ‘plan’, the basic premise remains the same: you must show investors you have traction, customer validation and possess a solid plan to maximize your market opportunity. Hollas says “The advantages of a well-developed business plan cannot be overstated. Not only does it serve as a powerful fundraising tool — it provides a solid framework for operations, helps establish your priorities, and helps you determine your company’s valuation and how much equity you need to part with to reach your fundraising goal.”
2. Prepare Yourself Legally
Raising capital in exchange for equity brings tremendous responsibility and regulation. Do your homework. Learn the 3 types because each has varying levels of regulatory compliance and limitations on who can invest in your company and how much you can raise. Plus, grab a good attorney because a private placement memorandum (PPM) is necessary for any offering you make. Hollas says “Doing so helps protect you and your company as it discloses regulations that dictate the offering and indicates to the investor that you uphold a professional attitude towards regulatory compliance with the SEC.”
Continue to the full article --> here
Equity Crowdfunding: A Brave New Market?
Calgary Herald | Brock Willis | March 18, 2014
Everyone keeps talking about venture capital when they talk about crowdfunding, but is the real beast the exempt market?
With rule changes to the exempt market sector expected to be announced by the Ontario Securities Commission in the first quarter of 2014, the industry has its green hat on. The OSC is considering some capital raising prospectus exemptions including a crowd funding exemption, which aims to develop a crowd funding regulatory framework, focused on investing through online funding portals and a family, friends and business associates exemption.
In Canada, with the exception of Ontario, eligible investors can buy Exempt Market products via an Offering Memorandum (OM) Exemption. Canada also currently permits Equity Crowdfunding under the OM exemption in all jurisdictions except Ontario, provided that it is undertaken by registered dealers such as an Exempt Market Dealer (EMD). A sea change is pending. “It is novel, it is different,” says Brian Koscak, Chairman of the Exempt Market Dealers Association (EMDA) and partner with Cassels Brock & Blackwell law firm. “We are entering into a new world – social media meets securities law.” Koscak, who is actively involved in developing a viable crowdfunding framework for Canada is on record that the “OM exemption is the most important capital-raising exemption that Ontario needs to adopt.” He strongly advocates that the proposed legislation can strike a balance between between protecting investors while not imposing excessive regulatory costs.
Related:
-
OSC provides update on Exempt Market Review including its consideration of existing security holder exemption
-
U.S. Intrastate Equity Crowdfunding Exemptions: 5 State Bills Adopted and 16 Pending
-
NCFA Canada: Equity Crowdfunding Response to OSC Staff Consultation Paper 45-710
“This is the beginning of a dialogue,” Koscak says. “To me, this is an excellent move forward by the OSC in trying to promote capital raising and basically trying to bring together capital markets and technology.”
In 2011, the estimated size of the exempt market in Canada alone was $150 billion (EMDA, March 2013).
The Alberta Securities Commission has allowed “eligible” investors to participate in the exempt market for some time now, according to Nancy Bacon, an independent consultant in the Exempt Market industry with a primary focus on the Canadian market. However, considering the exempt market industry raised roughly $140 billion in 2011 and Ontario represented $86 billion (60%) of this total, the anticipated influx of investors from the eligible investor exemption in Ontario is significant,” says Bacon.
Continue to the full article --> here
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | Prezi or contact us at casano@ncfacanada.org.
U.S. Intrastate Equity Crowdfunding Exemptions: 5 State Bills Adopted and 16 Pending
Venture Law Corporation | Alixe Cormick | March 18, 2014
As of March 18, 2014, five (5) states have adopted an intrastate equity crowdfunding exemption and sixteen (16) other states are in various stages of review in passing their own intrastate equity crowdfunding exemption (see charts below for detail). No one could have predicted twenty-one (21) states would work towards adopting their own crowdfunding exemption when the Jumpstart Our Business Startups Act (Job’s Act) was enacted on April 5, 2012.
As Canadians we are often told by the media, and the uninformed, we need one securities regulator just like United States (US). Canadians truly believe that there is only one securities regulator in the US and only one set of securities rules and regulations. Those of you living in the US know this is not true. Each US state and territory (state) has its own securities regulator and its own set of securities rules and regulations. Many of these state securities rules and regulations are based on the Uniform Securities Acts of 1956 and 2002 agreed to by the North American Securities Administrators Association (NASAA). NASAA encourage its members to seek uniformity of state securities laws but recognizes difference may emerge requiring local rules be adopted to address important issues in a particular state’s jurisdiction. Equity crowdfunding is one issue where individual state regulators have chosen to not wait for the US Securities and Exchange Commission (SEC) or NASAA to implement a uniform rule.
These intrastate exemptions share quite a lot in common with the Title III of the Job’s Act, but they differ in material ways. An issuer may raise up to $1,000,000 to $2,000,000 under an intrastate crowding funding exemption in a 12 month period. Individual investment amounts are capped to an amount certain; $5,000 and $10,000 caps being most popular. The disclosure requirements are simplified. Most intrastate crowdfunding exemptions do not require issuers to provide audited financial statements or any mandatory financial statements unless an issuer is raising more than $1,000,000. The exemptions also have no post-offering disclosure requirements. Instead, the regulators are relying on the crowd to dictate what type of disclosure issuers must provide during and after an equity crowdfunding campaign.
The requirement for portal operators state to state varies more than the requirements for issuers relying on an intrastate crowdfunding exemption. Portals either need to be registered as a broker-dealer or agent, or are exempt from registration on the basis they are not providing investment advice, or must register as a funding portal by filing a simple disclosure document. There is no requirement in any state that portal operators be resident in the state, only that the money received by a portal during a campaign be held within the state.
This light hand approach to equity crowdfunding regulation makes sense. It is a new industry and state regulators want to allow equity crowdfunding to develop in their state. Locavesting is how most successful non-equity crowdfunding campaigns are funded. Local angels also represent the majority of in state investing in start-ups. Introducing a new “perk” in the form of equity and allowing 98% of the population that is not an accredited investor to participate in these offering, may have a huge impact in a state even with a small population base.
You may be interested in:
-
Equity Crowdfunding Regulations in Canada (Frequently Asked Questions)
-
Webinar: Equity Crowdfunding and Global Trends
-
Saskatchewan Approves Equity Crowdfunding
What makes intrastate crowdfunding attractive is the cost of starting an offering is less of a burden to issuers and investors than the proposed Title III Job’s Act version of equity crowdfunding. The professional fees for lawyers, accountants and auditors for intrastate crowdfunding are eliminated or brought down to under $1,000. The disclosure documents, rather than daunting and full of legalese, are easy for issuers to prepare on their own. With no audit requirement, there is no need for an auditor; and any accounting statements voluntarily provided can be prepared by management. Issuers can use 99% of the money they raise for growing their business versus keeping a securities regulator happy. Investors can ask for the type of information and ongoing disclosure they want that fits the size of the business versus receiving information that does not make sense for the business or the size of investment.
There are few intrastate crowdfunding portals in operation. The rules have only been recently adopted in most states. It will take time for this form of equity crowdfunding to take hold.
Two charts have been provided below. The first chart summarizes the basic requirements of the intrastate equity crowdfunding exemptions available now. The second chart provides a list and link to all of the pending intrastate equity crowdfunding bills.
Intrastate Crowdfunding Exemptions Available Now
Georgia, Kansas, Maine, Michigan, and Wisconsin have each adopted an intrastate crowdfunding specific prospectus exemption. An intrastate exemption provides an exemption from federal registration requirements provided the issuer is a resident of and doing business within the state in which all offers and sales are made, and no part of the offering is offered or sold to non-residents. In other words, this is not a crowdfunding exemption Canadian issuers or anyone else outside of that specific state can rely on to raise capital.
| INTRASTATE EQUITY CROWDFUNDING EXEMPTIONS | |||||
|
Available Now |
|||||
|
Intrastate |
Maine: An Act to Increase Funding for Start-Ups S.P. 568 – L.D. 1512 |
||||
|
State Population1 |
2,853,118 |
9,687,653 |
1,328,361 |
9,883,640 |
5,686,986 |
|
Offering Limit |
$1,000,000 cap every 12-month period. |
$1,000,000 cap every 12-month period. |
$1,000,000 cap every 12-month period. |
$1,000,000 cap every 12-month period if no audited financial statements provided. $2,000,000 cap every 12 months if audited financial statements provided. |
$1,000,000 cap every 12-month period if no audited financial statements provided. $2,000,000 cap every 12 months if audited financial statements provided. |
|
Type of Securities |
All. Securities issued are restricted securities. |
All. Securities issued are restricted securities. |
All. Securities issued are restricted securities. |
All. Securities issued are restricted securities. |
All. Securities issued are restricted securities. |
|
Issuer Restrictions |
Available to non-reporting issuers involved in all for profit business sectors other than issuers who are an investment company, or without a specific business plan, or involving persons with a criminal or disciplinary history. Entity must be organized in Georgia by registration with the Georgia Secretary of State, and must be located in Georgia, including management, with at least 80% of its assets and operations within Georgia. |
Available to non-reporting issuers involved in all business sectors other than issuers who are an investment company, or without a specific business plan, or involving persons with a criminal or disciplinary history. Entity must be organized in Kansas by registration with the Kansas Secretary of State, and must be located in Kansas, including management, with at least 80% of its assets and operations within Kansas. |
Available to non-reporting issuers involved in all business sectors other than issuers who are an investment company, or without a specific business plan, or involving persons with a criminal or disciplinary history. Entity must be organized in Maine by registration with the Maine Secretary of State, and must be located in Maine, including management, with at least 80% of its assets and operations within Maine. |
Available to non-reporting issuers involved in all business sectors other than issuers who are an investment company, or without a specific business plan, or involving persons with a criminal or disciplinary history. Entity must be organized in Michigan by registration with the Michigan Secretary of State, and must be located in Michigan, including management, with at least 80% of its assets and operations within Michigan. |
Available to non-reporting issuers involved in all business sectors other than issuers who are an investment company, or without a specific business plan, or involving persons with a criminal or disciplinary history. Entity must be organized in Wisconsin by registration with the Wisconsin Secretary of State, and must be located in Wisconsin, including management, with at least 80% of its assets and operations within Wisconsin. |
|
Investor Restrictions |
Must be Georgia residents and all offers and sales transactions must occur within Georgia. (SEC Rule 147: any resales during the offering and for a period of 9 months after the offering is completed must be limited to Georgia residents.) 12-month investment cap of $10,000 per issuer by an investor unless an accredited investor. |
Must be Kansas residents and all offers and sales transactions must occur within Kansas and any resales during the offering and for a period of 9 months after the offering is completed must be limited to Kansas residents. 12-month investment cap of $5,000 per issuer by an investor unless an accredited investor. |
Must be Maine residents and all offers and sales transactions must occur within Maine. (SEC Rule 147: any resales during the offering and for a period of 9 months after the offering is completed must be limited to Maine residents.) 12-month investment cap of $5,000 per issuer by an investor unless an accredited investor. |
Must be Michigan residents and all offers and sales transactions must occur within Michigan and any resales during the offering and for a period of 9 months after the offering is completed must be limited to Michigan residents. 12-month investment cap of $10,000 per issuer by an investor unless an accredited investor. |
Must be Wisconsin residents and all offers and sales transactions must occur within Wisconsin. (SEC Rule 147: any resales during the offering and for a period of 9 months after the offering is completed must be limited to Wisconsin residents.) 12-month investment cap of $10,000 per issuer by an investor unless an accredited investor. |
|
Financial Statements |
Optional. |
Optional. |
Unaudited financial statements reviewed by a public accountant if amount raised in preceding 12 month period in aggregate more than $100,000 but no more than $500,000. Unaudited financial statements plus most recent tax return if amount raised in preceding 12 month period in aggregate $100,000 or less. Audited financial statements if amount raised in preceding 12 month period in aggregate more than $500,000. |
Audited financial statement required if raising more than $1,000,000. |
Audited financial statement required if raising more than $1,000,000. |
|
Document Requirements |
Form GA-1 Invest Georgia Exemption must be filed in paper form before any general solicitation or within 25 days of the sale of securities. Subscription agreement. |
Notice of Reliance on the Invest Kansas Exemption Form must be filed in paper form before any general solicitation or within 25 days of the sale of the security. Subscription agreement. |
Disclosure statement containing the information prescribed in subsection 6-A.E of the rule. Subscription agreement. |
Notice of Issuer Michigan Invests Locally Exemption Form and disclosure statement containing the information prescribed in subsection 202a (1)(e) of the rule must be filed electronically within 10 days before the offering of the securities. Risk acknowledgement in required form to be signed by each investor. Subscription agreement. |
Advance notice form and disclosure statement containing the information prescribed in subsection 551.202 (26)(f) of the rule must be filed electronically within 10 days before the offering of the securities. Risk acknowledgement in required form to be signed by each investor. Subscription agreement. |
|
Disclosure Liability |
Full disclosure liability with a knowledge exception and anti-fraud liability. |
Full disclosure liability with a knowledge exception and anti-fraud liability. |
Full disclosure liability with a knowledge exception and anti-fraud liability. |
Full disclosure liability with a knowledge exception and anti-fraud liability. |
Full disclosure liability with a knowledge exception and anti-fraud liability. |
|
Post Offering Requirements |
None. |
None. |
None. |
Quarterly report in required form must be provided to all purchasers within 45 days after the end of each fiscal quarter until none of the securities issued under the exemption are outstanding. Requirement may be satisfied by posting on website. |
Wisconsin securities regulator may adopt a rule or order requiring periodic reports while a registration statement is effective. Right now not a requirement. |
|
Portal Requirements |
Direct sales by issuer or portal operator must be registered as a broker-dealer or agent under Georgia Securities Act. |
Direct sales by issuer or portal operator must be registered as a broker-dealer or agent under Kansas Securities Act. |
Direct sales by issuer or portal operator must be registered as a broker-dealer or agent under Maine Securities Act. |
Direct sales by issuer or portal operator must be registered as a broker-dealer or agent under Wisconsin Securities Act or exempt from registration. (Notice of website operator.) |
Sales must be through an online funding portal. Portal operator must be registered as a broker-dealer or agent under Wisconsin Securities Act or exempt from registration. |
|
Advantages |
(1) Can sell to anyone resident in Georgia; (2) All types of securities may be sold; and (3) No annual report or other continuous disclosure requirements because of offering. |
(1) Can sell to anyone resident in Kansas; (2) All types of securities may be sold; and (3) No annual report or other continuous disclosure requirements because of offering. |
(1) Can sell to anyone resident in Maine; (2) All types of securities may be sold; and (3) No annual report or other continuous disclosure requirements because of offering. |
(1) Can sell to anyone resident in Michigan; (2) All types of securities may be sold; and (3) May raise up to $2,000,000 if audited financial statements provided. |
(1) Can sell to anyone resident in Wisconsin; (2) All types of securities may be sold; and (3) May raise up to $2,000,000 if audited financial statements provided. |
|
Disadvantages |
(1) Offering size limited to maximum of $1,000,000 every 12 month period including all other offerings; (2) Only available to state resident issuers and investors; and (3) civil liability attached. |
(1) Offering size limited to maximum of $1,000,000 every 12 month period including all other offerings; (2) Only available to state resident issuers and investors; and (3) civil liability attached. |
(1) Offering size limited to maximum of $1,000,000 every 12 month period including all other offerings; (2) Only available to state resident issuers and investors; and (3) civil liability attached. |
(1) Offering size limited to maximum of $2,000,000 every 12 month period including all other offerings; (2) Only available to state resident issuers and investors; (3) audited financial statements must be provided if raising more than $1,000,000; (4) quarterly report must be provided until securities are no longer outstanding; and (5) civil liability attached. |
(1) Offering size limited to maximum of $2,000,000 every 12 month period including all other offerings; (2) Only available to state resident issuers and investors; (3) audited financial statements must be provided if raising more than $1,000,000; (4) Issuer must make offering through a registered broker dealer; and (5) civil liability attached. |
|
Active Portal Examples |
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Intrastate Crowdfunding Exemption Bills Pending
Alaska, Arkansas, Alabama, Indiana, Florida, Maryland, Missouri, North Carolina, New Jersey, Tennessee, Utah, Virginia, and Washington are all considering intrastate crowdfunding exemption bills. Connecticut, New Mexico and Texas have ordered committee reports on crowdfunding for possible action in the next legislature in their respective states. There is no guarantee however, any of these proposed bills will pass. The intrastate crowdfunding bill introduced in Mississippi for example failed to garner support and died.
The chart below provides the name and status of the intrastate crowdfunding related bills that are pending as of March 18, 2014. This list may not be complete. Several states have competing intrastate crowdfunding bills pending in the house and senate, or renumber and rename the same bill depending if it is in the state house or senate.
| INTRASTATE EQUITY CROWDFUNDING IN UNITED STATES | ||||
|
Pending |
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|
State |
Bill Name |
Status |
Last |
Next Action Required |
|
AK |
HB 303 An Act establishing an exemption for the sale and offering of certain securities |
Read 1st time in house. Bill referred to labor and commerce committee. |
Bill must now go through house committee process. |
|
|
AL |
Read 2nd time in house. |
Bill must be read 3rd time in house. If passed by house it is ready for enrollment and transmittal to Governor for final approval/veto. |
||
|
CT |
HB05577An Act Concerning A Crowdfunding Study by the Department of Banking |
Introduced and referred to joint committee on commerce |
03/11/14 |
Request the banking commissioner study crowdfunding legislation in other states and provide recommendations for implementation in CT by 01/01/15. |
|
IN |
Read 3rd time in senate. |
Bill requires house signature. Once received it is ready for enrollment and transmittal to Governor for final approval/veto. |
||
|
FL
|
Introduced in senate Introduced in house |
03/11/14 |
Bill must now go through senate committee process. Bill must now go through house committee process |
|
|
MD |
1st reading in house. Bill referred to economic matters committee. |
Bill must now go through house committee process. |
||
|
ME |
S.P. 568 – L.D. 1512 An Act To Increase Funding for Start-ups |
Passed by house 02/13/14 and now senate. |
Bill became law without Governor’s signatures (emergency measure) 03/02/2014 |
|
|
MO |
2nd reading in house. Bill referred to financial institutions committee. |
Bill must now go through house committee process. |
||
|
NC |
HB 680 North Carolina Jump-Start Our Business Start-ups Act of 2013 |
Referred to commerce committee |
Bill must now go through house committee process. (In Recess.) |
|
|
NJ
|
A 2073 2014 Provides certain issuers of securities with exemption from registration |
Introduced in the senate, referred to senate commerce committee Introduced in the NJ assembly |
Bill must now go through house committee process.. Referred to assembly financial institutions and insurance committee. |
|
|
NM |
Introduced and passed by house. |
The economic development department is to prepare a report on bill and present findings to interim legislative committee by 11/01/14. |
||
|
TN
|
Introduced by senate. Introduced by house. |
Placed on senate C&L commerce calendar for 3/18/2014. HB 2363 assigned to insurance and banking subcommittee. |
||
|
TX |
Speaker Joe Straus Interim Committee Charges Texas House of Representatives 83rd Legislature: House Committee on Investments and Financial Services – Item3 page 28 |
House committees will conduct a study of the issue. Committee is required to submit a final report no later than December 1, 2014. |
01/31/14 |
The findings of house committee will likely from the basis of legislation under consideration during the 84th legislative session in Texas beginning in January 2015. |
|
UT |
HB 142 – 2014 Securities Act Amendments (see changes to 61-1-14(2)(q) which now provides an intrastate crowdfunding exemption) |
Read 2nd time in house. |
Bill must now go through house committee process. |
|
|
VA |
SB351 introduced to senate. Bill sent to senate commerce and labor committee HB 880 left in house commerce and labor. |
Bill must now go through senate committee process. (In recess ) Bill must now go through house committee process. |
||
|
WA |
House concurred with senate amendments. House speaker signed. |
Bill is in the senate waiting for senate president to sign. Once passed by house and senate it is ready for transmittal to Governor for final approval/veto. |
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Intrastate Crowdfunding Exemptions and Canada
In an ideal world, we would like to see National Instrument 45-106 – Prospectus and Registration Exemptions (NI 45-106) amended to include one equity crowdfunding exemption available to every issuer and investor in Canada. Currently, we have two equity crowdfunding exemption models in Canada: the Saskatchewan model and the proposed Ontario model. Time will tell whether these two models are adopted in the other provinces in Canada or if a new crowdfunding exemption is proposed for consideration in these other provinces or as a new exemption in NI 45-106. We shouldn’t expect just one crowdfunding exemption model well immediately emerge in Canada given the US has twenty-one (21) state and one (1) federal equity crowdfunding exemption models. Equity crowdfunding is too young of a concept for just one model to be agreed on by all constituents.
* * *
Disclaimer
This blog post is not intended to create, and does not create an attorney-client relationship. You should not act or rely on information on this blog post without first seeking the advice of a lawyer. This material is intended for general information purposes only and does not constitute legal advice. For legal issues that arise, the reader should consult legal counsel.
Author: Alixe Cormick is the founder of Venture Law Corporation in Vancouver, British Columbia and a member of the Advisory Board of the National Crowdfunding Association of Canada. You can reach Alixe by phone at 604-659-9188
, by e-mail at acormick@venturelawcorp.com, on twitter @AlixeCormick or on Google+.
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | Prezi or contact us at casano@ncfacanada.org.
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Dan Park is a Vice President at Azure Capital Partners and is responsible for evaluating investment opportunities across Canada. In addition, Dan supports the firmin the US in software and related infrastructure technologies as well as mobile, web and digital media.
Immediately prior to joining Azure, Dan was a Vice President and a founding member of Foros Group, a technology-focused investment
banking advisory firm based in New York. In this capacity, he helped launch the firm and was responsible for business development and transaction execution. In 2011, Dan helped Foros achieve a top 15 ranking in the Thomson Reuters US M&A league tables. Prior to Foros, Dan worked at Deutsche Bank Securities in New York focusing on technology, media & telecommunications, and healthcare and at BMO Capital Markets in Toronto.
Dan received an M.B.A. from the Wharton School at the University of Pennsylvania and a Bachelor of Commerce degree in Honors Economics & Finance (First Class Honors) from McGill University, where he served as President of the Management Undergraduate Society and was awarded the Scarlet Key for outstanding contribution to McGill.
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The National Crowdfunding Association of Canada (NCFA Canada) is Canada's Crowdfunding Advocate. Newly formed, dynamic and inclusive, the NCFA Canada works closely with industry groups, government, academia, other business associations and affiliates to create a strong and vibrant crowdfunding industry and voice across Canada.
Is Equity Crowdfunding The Key To More International Startup Hubs?
Forbes | Jessica Stillman | March 17, 2014
Is crowdfunding the secret to creating more Silicon Valley-like tech hubs around the world? Crowdfunder CEO Chance Barnett argues yes.
Talent, we all know, knows no geography. Great brains and big ambitions can be born anywhere. The sorts of ecosystems that nurture this talent and accelerate innovation are far rarer.
History, government policy and culture all play a role in determining where a cluster will (and will not) develop, but so, of course, does the access to capital to grow ideas into big businesses. Is equity crowdfunding the solution to this piece of the puzzle and a key to accelerating the growth of international clusters?
That’s what Crowdfunder CEO Chance Barnett recently wrote on the Unreasonable Institute blog. He argues that crowdfunding platforms will facilitate the connection of local players and speed clustering, as well as accelerate access to capital and attract the attention of more traditional investors, advisors and partners. Forbes got in touch to ask him for more details on how crowdfunding can help nurture ecosystems around the globe and the obstacles that still stand in the way of its greater use.
Why do you think the “bottom up” method of crowdfunding beats more “top down” initiatives like government accelerators, etc.?
I believe that both are necessary — and that one without the other is relatively ineffective. Top down initiatives generally mean capital or resources given to those in the ecosystem (investors, companies, working spaces) by the government. These can have a short-term impact but have a lesser long-term effect on the level of talent, experience, diversity, and successful outcomes when done in isolation. It is hard for investors and the free market to pick winners and effectively allocate capital. It is more difficult for government to do this adequately, though there is a place for it in building capacity and helping jumpstart an ecosystem locally.
View: Equity Crowdfunding for Investors - Frequently Asked Questions
Bottom up methods are more about small groups collaborating, sharing knowledge, sharing resources, sharing capital. They complement the top down by building interactions and networks where good ideas and skills spread more effectively. Crowdfunding and equity crowdfunding are a kind of “meeting place” of ideas and companies.
Are there regions or countries that are particularly well placed to take advantage of the community-building aspects of crowdfunding?
There is a significant global entrepreneurship movement. Entrepreneurs are building incredibly innovate products and services in places as difficult as central Africa, and solving hard and meaningful problems.
Equity crowdfunding is and will scale faster in more mature ecosystems like the early-stage investment market in the US. There are larger existing flows of investment capital and risk appetite that are moving increasingly online in the US. That said, the lesser developed countries and regions have the opportunity to effectively speed their development of an entrepreneurship and investing culture and “leap-frog” a few of the development phases that other markets have had to slowly grow through.
I believe equity crowdfunding will be a key growth driver of entrepreneurship and innovation in Latin America, Southeast Asia, and parts of Africa. We are the first and largest investment network now in Mexico, and are expanding into other countries in Latin America.
Continue to the full article --" here
Equity Crowdfunding Upfront Costs : No Laughing Matter
DYF Consulting | Diana Yazidjian | March 14, 2014
Adoption of Equity Crowdfunding for ordinary investors may come sooner than we think. First in the US and not far behind, Quebec and Ontario. [Note: Saskatchewan has gone forward with a smaller-scale model as allowed by law (150,000$ raises and under), but for the purpose of this post and considering investment statistics, we assume that companies will aim higher – much higher, and this has yet to be legalized]. We thought the time was well chosen to outline the costs a Canadian company may incur given the possible regulatory framework that will come into force.
I sat down with Paul Niederer, CEO of ASSOB, the largest equity crowdfunding platform, to compare notes. We may be more conservative than our Australian counterparts and demonstrate a lower tolerance to risk. That is why we are assuming that the bar will be set higher for Canadian companies. For a minimum investment of 500,000$ (USD), to prove their credentials, here’s what companies may be expected to pay upfront prior to launching an equity crowdfunding campaign:
COMPLIANCE FEES $3,000-8,000
1-Legal writing of offering document compliant with legislation:
2-Investment summary
BUSINESS/MARKETING SERVICE FEES $4,000-8,000
3-Value proposal, storytelling, business case, video
4-Community building, SEO, content strategy
PORTAL FEES $40,000 – 50,000
4-Due diligence on company and executive team $1,000
5-Offer document review: $3,000$-4,000 (Note: Crowdcube in the UK charges $3,000 or 1,800 pounds that are subsequently deducted from capital raise),
6-Portal success fee: 2-3% of min. proceeds
7-Broker success fee: 5-6% of min. proceeds (a broker is necessary for larger amounts)
Note: Australia's ASSOB charges 8% of which 2.5% goes to portal and 5.5% to broker.
PROFESSIONAL FEES $5,000$-7,000
8-Certified Public Accountant costs (higher for raises above $500,000)
9- Financial Planning
All in all, companies may be required to put in somewhere between 10 and 13% of the money raised. That’s 52,000$ to 75,000$ to raise $500,000. The SEC estimates are even more pessimistic, as indicated below.
Related:
Add to that, ongoing fees: Marketing/Social Media/PR/Advertising which represent roughly 5-10% of the minimum proceeds, quarterly reporting costs and legal defense costs.
Credit: Crowfunding Capital Advisors - Venturebeat
Suffice it to say, under the proposed framework, this model is not a solution to all ills. Upfront costs are and will be a barrier to entry for early-stage start-ups.
Source: DYF Consulting | Diana Yazidjian
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | Prezi or contact us at casano@ncfacanada.org.
