National Instrument 45-110 Start-up Crowdfunding Registration and Prospectus Exemptions
In Canada, the startup crowdfunding exemption contained in National Instrument 45-110 is a regulatory framework that allows Issuers to raise funds from a large number of investors through online platforms (so-called funding portals). This exemption from the requirement to publish a prospectus is intended to help start-ups and small businesses access capital more easily and efficiently.
Under the start-up crowdfunding exemption, issuers can raise up to CAD 1.5 million in a 12-month period from investors, subject to certain conditions. These conditions include:
- The offering of securities must be made through a funding portal operated by a registered dealer or a funding portal exempt from dealer registration requirements.
- The issuer must be incorporated or organized in Canada.
- Individual investors are limited to investing CAD 2,500 per offering when the offering is facilitated by an exempt funding portal and may invest a maximum of CAD 10,000 when the offering is facilitated by a funding portal operated by a registered dealer if deemed suitable in the dealer’s eyes.
In addition, issuers relying on the crowdfunding exemption must provide prospective investors with certain disclosure in the form of an offering document which includes certain essential information about the securities being offered, the issuer and information about the risks associated with the investment.
It’s important for businesses to understand the specific requirements and limitations of the exemption before launching a crowdfunding campaign.
Can Real Estate Operators Use Start-up Crowdfunding?
Yes, real estate operators can use the start-up crowdfunding exemption in Canada to raise capital for their projects. However, there are certain conditions that must be met in order to be eligible. Are you a real estate developer or owner? Schedule a call to learn more.
DISCLAIMER: This information is for educational and informational purposes only and should not be considered as investment advice. Any investment decision should be made based on your own research and analysis. You should consult with a financial advisor or other professional to determine what may be best for your individual needs and risk tolerance. We encourage you to do your own research before making any investment decisions. Investing involves risks, including possible loss of principal.
