Under the new Start-Up Crowdfunding prospectus exemption, BC entrepreneurs and startups can now gain backing through online crowdfunding portals, without the need to file a prospectus.
This is a great opportunity for startups looking to tap into a new major source of capital!
As a general rule, a company must file a prospectus with the securities regulatory authority in each province or territory in which it intends to distribute securities. This can be both costly and time-consuming. Consequently, to date, start-up companies have not been able to sell equity to investors through crowdfunding.
Under the new Start-Up Crowdfunding prospectus exemption, private businesses which have not previously filed a prospectus, will be allowed to offer residents in British Columbia, along with those in Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia, various types of securities through online crowdfunding portals, without having to file a prospectus.
Details and further information here.