Is Equity Crowdfunding Legal in British Columbia?
Often times these individuals are family, friends, and friends of friends who are investing more in the founding team and vision than an existing business. If the startup is doing well, and is open for further investment, venture capital firms often enter next. Both VC firms and angel investors typically try to add value beyond their capital, such as through introductions and strategic advice. Venture capital firms typically invest after the seed round to provide larger amounts of growth capital in what is also referred to as “Series A round.” Some VC firms will also invest at the seed stage, side-by-side with angel investors.
Angel Investors Can’t Sit on Crowdfunding Sidelines
_____________________________________________ Francis Moran is Founder of Francis Moran & Associates based in Ottawa, Canada. His firm specializes in working with new and established technology ventures that want to improve their market presence and succeed in a fast-moving and competitive environment on a global context. His firm can act as virtual Chief Marketing Officer where hiring a full-time internal resource is impractical. The above article previously appeared on his website.
Unlike the United States where the federal regulators have jurisdiction over regulating crowdfunding nationwide, the Canadian provinces are regulated specifically by each provincial securities authority. In what appears to be a very liberal allowance for equity crowdfunding the financial authorities state in the public document: Crowdfunding is a term used to describe raising small amounts of money from many people, usually over the internet. The concept has been used by charities and by some companies who offer product pre-sales. The US is considering adopting a new crowdfunding exemption that would allow companies to sell securities to anyone over the internet through either a registered broker-deal or a registered funding portal. The SEC still needs to develop rules to support the exemption.