Six provinces introduced new regulations in January for online fundraising tools after other provinces brought in rules in 2015
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Online Funding / Investing Portals
Startups navigate regulatory patchwork amid new equity crowdfunding rules
Business In Vancouver | March 21, 2016
Six provinces introduced new regulations in January for online fundraising tools after other provinces brought in rules in 2015
Many of Peter-Paul Van Hoeken’s biggest headaches faded away overnight when regulators introduced new equity crowdfunding rules in May 2015, allowing startups to raise capital online by offering company shares to non-accredited investors.
The founder and CEO of Vancouver-based FrontFundr had been dealing with a patchwork of regulators from different provinces as he prepared to launch an online crowdfunding portal for startups.
Suddenly the new startup exemption wiped away regulatory problems in six provinces, including B.C.
But in January, Ontario — along with five other provinces, not including B.C. — introduced an entirely new set of rules known as the integrated exemption.
FrontFundr’s portal now juggles regulatory differences created through the startup exemption, the integrated exemption and the older offering memorandum exemption.
“It’s really a problem,” Van Hoeken said.
“In Canada we have three crowdfunding rules today and Alberta is contemplating other rules.”
Alixe Cormick, a corporate securities lawyer and founder of Venture Law Corporation, said the fact provinces are introducing different exemptions is a sign of the industry’s potential.
“You should expect that there’s going to be more portals coming on board in the next year. Part of the issue to date has been the regulations weren’t clear,” she said.
It’s still “extremely early days” for crowdfunding portals in Canada, Cormick said, which is why regulations haven’t been harmonized across all provinces.
“The equity portals, it’s going to take a little while for them to develop their feet in part because there’s no clear exit mechanism for [the startups],” she said.
See: Recent Regulatory Developments in Equity Crowdfunding in Canada
“It’s not like they’re going to be listed on a stock exchange, it’s not like they’re going to be able to provide dividends.”
The startup exemption in B.C. allows issuers to raise $250,000 per campaign.
Startups can complete two campaigns a year and they’re not required to file financial documents or a prospectus. Investors are limited to $1,500 investments per year.
The integrated exemption in Ontario allows issuers to raise $1.5 million in one year, while investors are capped at $2,500 per issuer and $10,000 annually.
The offering memorandum exemption has no financial limits but the issuer must provide financial statements.
Investors must abide by the exemption offered by the province in which they live.
FrontFundr was the first online portal to close a deal in Canada under the startup exemption, helping Vancouver-based Guusto raise $50,000 for its gifting app in September.
It’s also the first portal to facilitate a campaign under the integrated exemption as Nova Scotia’s Lux Wind Turbines seeks to raise $800,000.
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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 1300+ 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.
Real Estate Crowdfunding – An Emerging New Asset Class
R2Crowd | Karen Dao | March 21, 2016
The Second Annual 2016 Canadian Crowdfunding Summit (CCS2016) was held on March 3 at the MaRs Discovery District in Toronto and placed focus on the future of crowdfunding in Canada. With the newly released equity crowdfunding regulations in January, there is huge momentum and growth potential for this industry. R2Crowd, a leading Real Estate Crowdfunding platform was honoured to join Canada’s leading innovators, leaders, investors and sponsors of crowdfunding, FinTech and financing alternatives.
The summit was officially opened by Ontario Finance Minister, Hon. Charles Sousa who delivered an impactful speech to a crowd of over 400+ highlighting the importance of innovation and the need to help small businesses access capital and resource networks to help them launch and scale into viable commercial entities.
“Those who innovate and stay ahead will become leaders and those who lag will fall off the wagon" expounded Minister of Finance, Charles Sousa on emerging fintech companies.
Amar Nijjar, debt capital markets expert and CEO/Co-founder of R2Crowd capital, participated on a speaking panel called ‘Hot Vertical: Real Estate Crowdfunding, an Emerging New Asset Class’ moderated by Brooks Barnett, Manager Government Relations and Policy at the Real Estate Property Association of Canada (RealPAC) explained, “We received an overwhelming response for our panel discussion and lunch & learn at CCS2016. We are on the forefront of connecting investors with quality commercial real estate opportunities in Canada.”
See: Alternative Finance Crowdfunding expands world of corporate real estate investing
Real estate crowdfunding was a $3billion industry in the US last year and is continuing to grow. Canadians are just realizing the potential of this market. In addition to the Syndicated Mortgage exemption, other exemptions such as the Accredited Investor exemption, Offering Memorandum exemption and the Start Up Exemption are used to open the doors for the private capital market in Canada reaching $150B and spanning a scope of 20 million Canadians who are able to qualify for debt or equity investments.
Investors and Real Estate sponsors open access to quality commercial real estate deals
Investors are able to reap a number of benefits by investing through a crowdfunded portal. They are able to gain access to quality commercial real estate offerings that they could not have prior. Investors can strategically choose properties by geographic location, asset class, stabilized or value-add assets and build a personalized portfolio. All of this can be done safely through online avenues like computer, mobile or tablet. Investors get to do full due diligence on the property they want to invest in and hold a direct title to it.
Average returns on such investments are typically in the 10-14% per year range. In today’s volatile stock market it makes a lot of sense to invest in good quality well located commercial real estate which is backed by underlying leases that offer stability of cash flow. Traditionally such investments were only open for wealthy investors as sponsors would ask for large cheques for e.g. in the amounts of $100,000 and up, however, with crowdfunding small investors can also now co-invest alongside wealthy investors and participate on the same terms.
Sponsors are also able to benefit through using a real estate crowdfunded platform as they are able to raise a significant amount of capital a lot faster, and at a lower cost than if they were to use traditional routes of capital raise. They are able to access our growing database of 120,000 investors, while reducing their workload as many intermediary processes associated with the traditional avenue are not costs effective and timely.
If you are interested in learning more about new capital raising and investment opportunities for investors and real estate sponsors, please visit us at R2Crowd.com for more information.
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 1300+ 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 is growing up’: SyndicateRoom just partnered with the London Stock Exchange
Tech Insider | Oscar Williams-Grut | March 14, 2016
Crowdfunding investment platform SyndicateRoom has gained intermediary status with the London Stock Exchange (LSE), meaning it can offer investors access to initial public offerings (IPOs) of companies listing shares on the London stock market through its online platform.
Co-founder and CEO Goncalo de Vasconcelos told Business Insider: "What we are doing now is crowdfunding growing up.
"We are authorised by the FCA [Financial Conduct Authority], we have been accepted as a member of the LSE — bear in mind these bodies go through a huge amount of due diligence — and that means from now on we are the only platform that allows the crowd to invest in IPOs. That is incredibly exciting."
IPOs are when private companies go public, listing their shares on the stock market. The mechanism lets companies raise money and means investors can easily invest in and trade company stock.
While IPOs are technically already open to retail investors — ordinary savers, who make up the bulk of crowdfunding — de Vasconcelos says that in practice it is very hard for small time investors to get access to these investments, which are typically offered at a better price than publicly traded shares.
See: First Equity Crowdfunding Deal to Use Ontario’s Crowdfunding Exemption
He told Business Insider: "It's possible for you and I to buy and sell public shares. It is much harder to get access to IPOs and private placings when there is a discount on the share price and typically only institutional investors — asset managers, wealth managers — have access to them.
"Yes you can call a broker, but you really will struggle to find a broker that will take a £1,000 order because it's just not cost efficient. We're breaking a barrier by doing what we do best — do it all on a platform, very efficient."
This all ties in neatly with Cambridge-based SyndicateRoom's mission statement — to let ordinary investors gain access to the kind of deals that professional investors normally only get involved in.
de Vasconcelos says: "We are the only investor-led crowdfunding platform. What this means is we allow the crowd to invest together with professional investors — angels, VCs, family offices. Our key vision is it shouldn't matter if you're a small-time investor with £1,000 to an investor or a professional with millions, on pound for pound invested you should all have the same opportunity.
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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 1300+ 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.
Peer-to-peer loan arranger Lending Loop, in talks with regulators, halts new loan requests
Financial Post | Barbara Shecter | March 1, 2016
Lending Loop, a Canadian fintech firm that was extending U.S.-style peer-to-peer crowdsourced loans to small businesses, has stopped posting new loan requests on its website while it meets with regulators to ensure its model “complies with all applicable laws.”
A notice to that effect was posted on the company’s website Tuesday.
Notice: Loan Requests March 1, 2016
Lending Loop is currently engaged in discussions with the appropriate securities regulatory authorities to ensure that its model complies with applicable laws. As an act of good faith, we have decided to voluntarily and temporarily halt the posting of new loan requests on our website during this period. Lending Loop will, however, continue to fund loans with its own financial capital and/or the financial capital of investors of Loop Financial Inc. Additionally, Lending Loop will continue to service all funded loans during this period and all existing lending partners will be able to access their Lending Loop accounts, and withdraw available funds at no cost.
See: UK Alternative Finance Grows by 84% to £3.2 Billion in 2015
The halt in the posting of new loan requests by the marketplace lender was characterized as “voluntary and temporary” and “an act of good faith.”
The notice did not name the regulatory authorities Lending Loop is in discussions with, but the Ontario Securities Commission issued a public notice to all marketplace lenders last year, urging them to seek legal and regulatory advice to ensure their operations were complying with securities law or relying on appropriate exemptions.
Lending Loop launched in October and the founders were coy about how the firm was able to offer U.S.-style peer-to-peer lending. The model allows anyone with $50 to pool their money in larger loans that are extended to small businesses.
Other marketplace lenders such as Borrowell and Grouplend, which is now called Grow, opted to tap only institutional and well-heeled “accredited” investors to back loans in order to ensure they are onside with regulators.
Cato Pastoll, one of the founders of Lending Loop, said his firm’s peer-to-peer model was popular among those who don’t meet the income and asset thresholds to be considered accredited investors. After launch, Lending Loop quickly attracted interest from 450 individual lenders, with 100 becoming active participants, Pastoll told the Financial Post in November.
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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 1300+ 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.
New crowdfunding rules attract U.S. lenders to Canadian companies
The Globe and Mail | Clare O'Hara | March 2, 2016
New entrants are arriving to Canada’s crowdfunding scene now that regulators have provided further clarity on rules for the burgeoning industry, opening up fresh opportunities for both investors and small businesses.
Earlier this year, several new crowdfunding rules were announced that allow retail investors the ability to participate in the raising of capital for small businesses. Marketplace lenders, also known as peer-to-peer lenders, typically link up borrowers who are looking for capital with investors that are looking for higher-than-average returns.
In Ontario, a new offering memorandum exemption was implemented allowing retail investors to be able to invest up to $10,000 into the private capital markets annually. (Some higher-earning individuals earning could invest more if they received professional advice.) At the same time, Ontario has introduced a crowdfunding exemption where companies are now able to raise funds from retail investors publicly online once they register a funding portal with provincial securities regulators. Investors can invest $2,500 per company – up to a maximum $10,000 total in the same calendar year.
Related: Recent Regulatory Developments in Equity Crowdfunding in Canada
Regulators in British Columbia, Alberta, Saskatchewan, Manitoba and New Brunswick finalized an investment dealer prospectus exemption that allows any investor who has obtained advice about the suitability of the investment from an investment dealer to participate directly in private placements.
With the new regulations, some U.S. lenders are now looking to set up shop north of the border.
U.S. player InvestNextDoor is in the process of registering in Canada as an exempt market dealer – a firm that is able to sell investment securities that haven’t been qualified by a prospectus due to regulatory exemptions. Its Canadian site – investnextdoor.ca – will become the next online marketplace lender for Canadian small businesses looking to raise funds, as well as for investors looking for alternative investment options.
Related: InvestNextDoor Brings Trillion Dollar Marketplace Lending Opportunity to Canada and Introduces New Fixed Income Asset Class to Canadians
The U.S. platform launched two years ago in Washington by Canadian co-founders Tabitha Creighton and Lisa Ohman. The two female co-chief executive officers originally planned to start their company in Canada. But due to the regulatory environment at the time – and the lack of lenders in the Canadian industry space – Ms. Creighton says they decided to enter the more mature U.S market.
“At the time, there were far too many things left unclear in the Canadian market, so we looked at what was happening from a regulatory perspective at the U.S. peer-to-peer lending space,” Ms. Creighton says. “We were waiting for the Canadian industry to catch up to the U.S one.”
Related: Let’s cheer – not fear – the rise of ‘fintech’ alternative lenders
The peer-to-peer lending market has been a difficult industry to navigate for new entrants. Up until now, many providers would fund loans exclusively from accredited investors – those who typically have a net worth of $5-million or $1-million of investable assets – or from institutions.
Online lender Lending Loop, which launched last fall prior to the new crowdfunding rules, was the first Canadian provider to allow retail investors access to the private capital market. But it has since temporarily halted any new loan requests on its online marketplace. In a company blog post dated on Tuesday, the company wrote it is “currently engaging in discussions with the appropriate securities regulatory authorities.” Company officials would not comment further when contacted by The Globe and Mail.
Now, with the regulatory landscape changing in Canada, new entrants won’t be testing the waters before launching. InvestNextDoor is opening a separate platform for Canadian small business and retail investors that will allow them to either invest directly to a particular company listed on an online marketplace or they can join a community fund. The community fund will allow investors to select a region or city that they want to participate in and includes 50 to 100 local businesses who seek funding.
Related: The real fintech threat for the Big Six
“Investors really do want to invest locally – when we conducted our early stage research we found that investors wanted to invest in markets they were comfortable with and ones they associate with– such as their own community,” says Ms. Creighton. “That aspect was often more important for investors than what their return would look like.”
Canadians will be able to invest a minimum of $500 and select investment terms of six months to five years. Interest rates for the investors anywhere from 6 per cent to 25 per cent, although the average return on investment hovers around 12 per cent to 13.5 per cent, Ms. Creighton says. The return doesn’t come without risk, and investors should be aware of the higher risk involved with private capital investments.
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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 1300+ 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.
Staples and Thinking Capital Launch Staples Business Loans, Helping Small Business Owners Make More Happen
Thinking Capital Press Release | February 3, 2016
Staples Business Loans lets businesses apply online for loans of up to $300,000
TORONTO , Feb. 3, 2016 /CNW/ - Thinking Capital has teamed up with Staples Canada to launch "Staples Business Loans powered by Thinking Capital", giving Canadian small business owners quick and easy access to financing.
Through this service, Thinking Capital, Canada's leader in alternative financing for small and medium sized businesses, and Staples Canada are offering smart financing solutions that will help small businesses in Canada grow. The online application process is quick and simple, with customers receiving funding in as little as 24 hours.
"We're committed to helping small business owners by providing everything they need to make more happen for their business," said Dwayne McMulkin , director of marketing and innovation at Staples Canada . "Staples Small Business Loans make it easy for small businesses to access the right lending solutions for their business."
Key features of the program include:
- Speed - Loan applications ranging from $5,000 to $300,000 can be completed entirely online in a few simple steps.
- Real-time decisions - Completed applications receive a credit decision immediately, with most loan applications adjudicated in minutes through the Thinking Capital platform.
- Faster funding – Upon approval, funds are deposited to a client's account in just a few days.
- Growing market – Unlike a traditional lender, our loan options enable more small businesses to quickly access funding to further expand their business. Canadian small businesses that have operated for more than six months are qualified to apply for a business loan.
"We are thrilled to team up with Staples on Business Loans powered by Thinking Capital and look forward to helping its customers meet their small business financing requirements," said Jeff Mitelman , CEO and Co-Founder at Thinking Capital. "We have already helped more than 10,000 Canadian small business owners with their funding. Traditional financing options do not always keep pace with the needs of small businesses. Staples Business Loans powered by Thinking Capital will allow us to continue to transform the way business owners access the capital they require to grow while further establishing ourselves as pioneers in the lending as a service sector."
By leveraging Thinking Capital's proprietary software, algorithms and technology to analyze data, Staples Business Loans provides tailored financing solutions to businesses quicker compared to many traditional financing options available today. The Staples Business Loans financing program allows small businesses to act quickly in the face of market opportunity.
Staples Business Loans powered by Thinking Capital can help small businesses:
- Receive quick funding for renovations, hiring, expansion, or inventory purchases.
- Take advantage of time-limited opportunities, such as deals on supplies or equipment.
- Secure protection against short-term interest rate fluctuations.
- Make repayments in line with their business' seasonal cash flows.
More information can be found online at:
About Thinking Capital:
Thinking Capital, a leader in the Canadian fintech industry, is focused on reinventing the way small businesses access credit. Since 2006, it has helped more than 10,000 small- to medium-sized Canadian businesses reach their full potential. By combining industry experts and technology, Thinking Capital is transforming the opportunity for business owners to obtain capital to ultimately grow their business through speed and convenience. For more information, visit https://www.thinkingcapital.ca/ or visit us on Thinking Capital Facebook and Thinking Capital Twitter.
About Staples Canada/Bureau en Gros
Staples Canada /Bureau en Gros makes it easy to make more happen with more products and more ways to shop. Through its world-class retail, online and delivery capabilities, Staples lets customers shop however and whenever they want, whether it's in-store, online, on mobile devices, or through the company's innovative buy online, pick up in store option. Staples offers more products than ever, such as technology, facilities and breakroom supplies, furniture, safety supplies, medical supplies, and Copy and Print services. Consistently ranked as one of Canada's top ten companies in Marketing Magazine's Marketing/Leger Corporate Reputation Survey, Staples /Bureau en Gros is dedicated to offering customers the highest level of service. Staples Canada /Bureau en Gros also is invested in a number of corporate giving programs that actively support environmental, educational and entrepreneurial initiatives in Canadian communities from coast to coast. Visit www.staples.ca for more information, or visit us on Facebook and Twitter.
SOURCE: Thinking Capital
Madalina Secareanu, Staples Canada, madalina.secareanu@staples.ca, 905-737-1147 Ext. 2714; Jennifer Abbatiello, Thinking Capital, JAbbatiello@thinkingcapital.ca, 647-930-3040
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See Thinking Capital at the 2016 Canadian Crowdfunding Summit (#CCS2016)
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 1300+ 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 Platform Patreon Raises $30 Million In Series B Funding
Forbes | Cherie Hu | January 19, 2016
The members of today’s creative class are more actively disrupting conventional business models, and perhaps nothing is more indicative of this change than the recent success of crowdfunding platform Patreon.
The company just raised $30 million of Series B funding, putting its total amount of funding at $47.1 million. Led by Thrive Capital, the round also included investments from Allen and Company and follow-ons by Charles River Ventures, Index Ventures, Accomplice and Freestyle Capital.
Related: Creative Patronage Startup Patreon Raises $15 Million
According to the press release, Patreon will dedicate its newly-acquired funding largely to recruiting more members for its engineering and product teams, as well as for expanding service offerings and developing a more comprehensive and connected (read: mobile) experience for both creators and consumers. “We need to bring in so many people so fast,” declared co-founder Jack Conte, a musician himself who earns over $3,800 for each video he releases on Patreon, in an interview with TechCrunch. “We need to keep up with hiring and keep up with making all of the things.”
Patreon’s premise is slightly different from those of other creative platforms that implement crowdfunding, such as Kickstarter and PledgeMusic. Instead of one-off donations to individual projects, users on Patreon pledge to give a fixed amount of money to creators on either a monthly or per-creation basis. It is perhaps a more robust vision of the familiar pay-what-you-want model; not only will artists receive compensation solely after finishing each project (unlike on Kickstarter, for instance, where “fully-funded” projects may ultimately go unfinished), but this compensation can also turn into a regular, reliable and often impressive source of income.
Related: The Subscription Model of Crowdfunding
Aside from Conte, the most notable success stories on Patreon include video game review channel Classic Game Room, which makes over $10,400 per month on Patreon, and singer-songwriter Amanda Palmer, who earns over $32,000 for each artwork she creates. This is in striking contrast to artists’ annual earnings on YouTube or Spotify, which may peak only at a few dozen dollars in more indie circles.
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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 1300+ 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.
