Ontario Centres of Excellence is pleased about the Ontario government’s decision to look into ways to relax the rules that restrict crowdfunding, the use of technology and social media to raise funding for early-stage companies.
Making the announcement last week, Minister of Economic Development and Innovation Brad Duguid said with his support and that of the Minister of Finance, the Ontario Securities Commission is now looking at a possible equity crowdfunding exemption, similar to what's being considered in the United States.
Dr. Tom Corr, OCE’s President and CEO, supports the province’s approach of moving in a direction that is in the best interest of entrepreneurs and investors while also exercising due diligence. “This is very much in keeping with Ontario’s innovation leadership agenda and Minister Duguid’s priority of building a culture of innovation and entrepreneurship that leads to jobs and prosperity.”
Dr. Corr reinforced the Minister’s message about the value of increasing access to funding and financing when venture capital funding for start-ups remains a challenge.
Minister Duguid underlined the importance of, at minimum, keeping pace with the U.S. in moving forward with crowdfunding and “being nimble enough that when the U.S. is ready to go we are ready to go.”
“We need to ensure our entrepreneurs remain competitive with their counterparts, and just as importantly, continue to do their work here in Ontario and Canada,” he said.
He also noted that crowdfunding is a complex issue and all steps must be taken to ensure a high level of consumer protection. “The last thing we would want to do is plough ahead without appropriate protection and have the initiative take a negative turn. We need to get this right from the start,” Duguid said.
The announcement was made at a Toronto conference entitled Innovating Investment with Crowdfunding that attracted a diverse audience of entrepreneurs, investors, lawyers and other innovation experts.
Held at the Toronto Reference Library, the event featured as its keynote Darren Westlake, CEO and Co-founder of Crowdcube, the first crowdfunding website in the world to offer people equity in exchange for their investment. Topics at the event ranged from benefits for entrepreneurs and investors, legislative obstacles to be overcome in establishing crowdfunding, and issues related to best practices.