Tag Archives: crowdfunding

Crowd-sourced funding for proprietary companies – Why you might or might not

Crowd-sourced funding (CSF) is almost a reality for proprietary companies. Businesses in Australia will soon be able to access CSF without needing to convert into or incorporate an unlisted public company. If you caught our earlier article, you’ll know the existing CSF regime will extend to proprietary companies. In this article, we look at how it is different to crowd-sourced fund as a proprietary company and what are some obligations in undertaking CSF as a proprietary company.

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Crowdfunding legislation for proprietary companies passes

The long anticipated extension of the crowd-sourced funding (CSF) regime is finally set to become a reality with the Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017 having passed the Senate on 12 September 2018. Our previous thinking on this topic can be found here. We will be releasing part two of this article soon.

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Crowd-sourced funding – why you might or might not

Since September last year, early stage companies in Australia have had a number of options when it comes to fundraising. This includes crowd sourced funding (CSF). Already, a number of companies have tested out CSF which now enjoys legislative recognition. In this article, we look at some recent developments and consider what’s involved in CSF, why you might raise funds through CSF, and why you might think twice about it. Our previous thinking on this topic can be found here and here.

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ILN Today Post

How crowdfunding can bar you from getting a patent

Let’s set the stage: Nikola has a brilliant idea but doesn’t have the time or money to focus on turning his idea into a working product. Nikola hears about a website where he can ask anyone on the internet to donate money to help develop his invention. He will then work on his invention and eventually send a working product to anyone who sent him money. So, when should Nikola file for a patent?

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ILN Today Post

Regulation of Investment Crowdfunding

The CVM issued on July 13, 2017, CVM Instruction 588 (” CVM Instruction 588 “), which regulates the public offer of distribution of securities issued by small business companies, carried out with exemption from registration by means of a platform (” Platform “) on the Internet (” Crowdfunding ” or ” Equity Crowdfunding”).

The new regulation allows companies with annual gross revenue of up to R $ 10 million reais to make offers through collective financing on the internet, with automatic waiver of offer registration and issuer in the CVM. To protect investors, one of the conditions is that this type of offer only occurs through the Platforms, which will go through the process of obtaining authorization from the CVM.

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Private companies face public conundrum under new crowdfunding rules

A sticking point from the Federal Government’s Corporations Amendment (Crowd-sourced Funding) Act 2017 , was that there was no scope for private (proprietary limited) companies to access crowdfunding. Government sought to address this in the latest Federal budget, but there could be a catch.

The Crowdfunding bill passed in March, and becomes law this September. Feedback suggested few start-ups would consider crowdfunding under the model due to private companies being unable to raise money from the public and access the new regime, and the compliance burden of trading as a public company.

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Update on Crowdfunding in Canada

Recently Ontario joined regulators in Manitoba, Saskatchewan, Quebec, New Brunswick and Nova Scotia (the “Participating Jurisdictions”) in adopting a new crowdfunding regime which introduces a crowdfunding prospectus exemption for issuers as well as a registration framework for funding portals. “Crowdfunding” is an umbrella term used to capture many forms of capital and fund raising through many investors using an online platform, such as Kickstarter, Indiegogo and Crowdfunder. The new rules are set out in Multilateral Instrument 45-108 — Crowdfunding (“MI 45-108”) and are aimed at facilitating capital raising for start-ups, small and medium-sized enterprises. The MI 45-108 crowdfunding regime is intended to coexist and build on the existing startup crowdfunding exemptions (the “Startup Crowdfunding Exemptions”) adopted in Manitoba, Saskatchewan, Québec, New Brunswick and Nova Scotia in May 2015 (described in further detail in our earlier newsletter).

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ILN Today Post

Equity Crowdfunding: Are We There Yet?

Most of the approximately eighty crowdfunding websites (known as “portals”) in Canada are non-equity crowdfunding portals, such as Kickstarter. That is, they offer you a platform to raise money online from the general public for a particular project or purpose, but do not allow you to offer any shares or other type of equity interest in exchange for the contribution. More…

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