Holy Grail of Regulated Crowdfunding
Travelling around the world gives you great perspective on many things. From the people, culture, food, and market, to how everyone has their own way of getting things done. I spent the tail end of 2015 in airports and on airplanes travelling around the world to speak at conferences, and it has fundamentally changed my perspective on many things.
I had a system when I was travelling. Each time that I was called on to speak in a new country, I’d begin by studying local securities regulations – how they work, what you can and can’t do, and what the limitations of each set of rules is. I was speaking as an expert in equity crowdfunding, but also taking it as an opportunity to become a student of the countries I was speaking in. I wanted to bring a truly global perspective home, and bring international insights back to North America on what regulated crowdfunding looks like around the world.
Regulated Crowdfunding is a global phenomenon, everyone is curious as to what other countries are doing to grow it and control it. It’s only natural. Very few technological innovations are “born global” but this is one. Equity and debt crowdfunding have spread like an epidemic.
Today there are thousands of regulated crowdfunding portals on every continent. Capital markets have changed more in the past ten years than in the one hundred years preceding, and the impact of this change is exponential.
Currently, many countries still only allow accredited investors to invest in private companies via the regulated crowdfunding portals. The accredited investor exemption is great because there are no limits for the company or the investors, but this is still constraining the pool of potential investors to a fraction of what it is in countries that have opened things up and empowered the crowd.
We also have countries that allow non-accredited investors to invest, but the regulators limits how much can be invested and how much companies can raise. Clearly this is not what the visionaries and originators of crowdfunding had envisioned, but we must understand that you have to crawl before you can walk, and walk before you can run.
So it’s obvious the Holy Grail in Regulated Crowdfunding is allowing a company to raise unlimited capital, non-accredited investors to invest and low regulatory reporting requirements.
Nowhere in the world does this exist except in one country: Canada.
Canada is the only country at the moment that has the Holy Grail of Regulated Crowdfunding. It allows Canadian and foreign companies to raise unlimited capital from Canadian and foreign non-accredited investors. Canada has had the best piece of regulated crowdfunding regulation in place long before regulated crowdfunding even existed.
The rest of the world needs to see this model and learn from it. They should see how it works, and see how they can adopt similar measures in their jurisdictions. Canada has done a great job with this exemption, termed the Offering Memorandum, and it needs to be appreciated for all it can do. For those that want to increase their limits for both companies and investors look no further come and speak to the Canadian regulators.
The Holy Grail is here.
Jofre is one of the top 10 global thought leaders in Equity Crowdfunding, a Top 10 Fintech & Blockchain Influencer and a Top 50 InsureTech Influencer. Prior to co-founding @KoreConX.