Crowdmapped | Darryl Burma | June 13, 2014

Can you please tell us a bit about Wires Law and why you became a crowdfunding lawyer?

Sure, Wires Law is a corporate law firm. We deliver legal services across Canada to start-ups and medium sized businesses. We also work on behalf of investors in private companies. I got into the crowdfunding space in order to help my clients have another avenue to access capital and finance their business. We have been advocating for equity crowdfunding in Canada really since 2011 just before the US crowdfunding legislation was passed.

Being that crowdfunding laws are still forming in Canada and the industry is so new, what approaches do you use to help educate others on crowdfund investing?

I have been speaking publically on the topic for a couple of years, but more than anything I have been educating clients and keeping them informed on the proposed crowdfunding exemptions in Ontario. The National Crowdfunding Association of Canada, of which I am an advisor, is doing some great work in the education space. Educating investors will be essential for reducing and detecting fraud and mismanagement in crowdfunding companies.

As a crowdfunding lawyer what are some common questions you often get asked?

At the moment, most of the questions are around how the proposed equity crowdfunding exemptions will work. There is a lot of emphasis on the Crowdfunding Offering Document which will likely be required by the Ontario Securities Commission.

From a legal perspective, what advice would you give those looking to raise capital through crowdfunding when it comes to planning & preparation ahead of time?

Its not a legal perspective or legal advice, but I would say make sure you are ahead of the curve. Stay informed on when the proposed crowdfunding exemption goes live and start making the right connections in the industry now. There is a lot of work that will go along with properly preparing for crowdfunding. For example, ensuring your crowdfunding offering document that I just mentioned is prepared properly.

In your opinion, what type of legal hurdles should entrepreneurs be aware of before planning an equity crowdfunding campaign?

Equity crowdfunding certainly will not be for all companies. Entrepreneurs should be aware that there will be huge challenges with managing a company with a large number of investors. They should also be aware that, in some sense, it will take small private companies and make a lot of their information (financial info, business plans, salaries etc.) public. For some companies that will be a deal breaker.

As a crowdfunding lawyer who’s been involved in the industry since its inception, what are some of the biggest ways equity crowdfunding has evolved in Canada during the past couple of years?

Certainly on the rewards based crowdfunding side companies like Kickstarter and Indiegogo have catered to the Canadian market more. Indiegogo recognized that Canada made up a sizable portion of its users and overall market. It’s great to see them attending conference and even hosting their own events across Canada now.

On the equity side, over the past couple years, the discussion has really gone form, are we going to do it to when and how are we going to do it. I think a lot of people were surprised at how fast the Ontario Securities Commission has been working given the considerable scope of the changes on the table.

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