Crowdfunding: Canadians Getting in the Game In Spite of Predicted Economic Downturn

October 12, 2012

1 - Crowdfunding: Canadians Getting in the Game In Spite of Predicted Economic Downturnmain logo - Crowdfunding: Canadians Getting in the Game In Spite of Predicted Economic Downturn

As crowdfunding becomes all the rage, Canadians are taking full advantage of its benefits. Just like the House Boat Rental Business financed through UInvest based in Canada, offering the prospect of spending a wonderful weekend with friends and family near the serenity of water and beautiful landscapes. With startup capital of $88,000, this is just an example of how Canadians are benefitting from crowdfunding to finance their dreams.

Canada’s economy has caused income inequality amongst its inhabitants and the financial gap between the “haves” and the “have-nots” is widening. This instability could trigger an even bigger future financial crisis, according to Dallhousie University economist Lars Osberg.

Startup companies lack access to capital and investors to help them bring promising ideas and innovations into the market. Canadian businesses need help accessing financing and private investment, as well as supporting the commercialization of innovations. Crowdfunding harnesses the entrepreneurial spirit, nurtures great ideas, and builds an environment that encourages the necessary risks to put Canadian businesses on the map.

Now that the Crowdfund Act has been approved, how will it affect Canadian startups? It is more involved than just going online and asking people to fund a project. The new legislation allows “emerging growth companies” to raise up to $1 million from up to 2000 investors online enforcing limits on each individual’s investment; and with the exclusive use of heavily regulated “funding portals” that must be registered with the US Securities Exchange Commission.

As it stands, funding portals are required to disclose certain information to investors. Those investors will be made aware of the risks when investing in growth companies. This disclosed information can range from showing business plans, income tax statements, how much money has already been invested to date, and target offering amount, to the shareholders’ names and the funding goal’s deadline. Even with all these future regulations, crowdfunding is still a less intrusive way to raise capital.

Since Canada does not have a national securities regulator, any legislative initiatives to allow crowdfunding would have to come from individual provinces. But there’s very little yet to stop Canadians from going south to fund their startups.

UINVESTOR PERSPECTIVE UInvest makes investing money online convenient and reliable. Those interested in investing in Canadian projects have minimal risk of not seeing a return. In spite of the declining economic climate, Canada’s entrepreneurs can play an effectual role in rebuilding their economy by increasing their chances of getting their businesses and projects funded, which in turn will create more jobs.



From the website, Univest has offices in the USA, Ukraine and now has a presence in Canada