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Crowdfunding v Equity Crowdfunding
You may have heard of crowdfunding as a way for small businesses or creative projects to raise funds online from the public. Traditional crowdfunding usually raises money through donations or by pre-selling products.
Equity crowdfunding is slightly different.
Instead of giving a donation or pre-purchasing a product, individuals are buying a stake in a small business or start-up and businesses are selling securities like shares, limited partnership units and promissory notes.
Equity Crowdfunding - How it works
Both the business and the investor must be located in Saskatchewan
Businesses can make two, six-month offerings of $150,000 each over the course of a year.
No person may invest more than $1,500 in an offering.
The business cannot be a reporting issuer or an investment fund and cannot offer derivative type securities.
Businesses must give FCAA notice of their intention to issue an offering 10 business days before posting online.
The business cannot charge investors a commission or other amounts.
The business must report their sales to FCAA within 30 days of the offering’s close.
There are no fees payable to the FCAA for the offering.