Many new entrepreneurs do not realize that even if you are a private company, you must comply with provincial securities laws when you raise funding for your business. These laws require companies to file a prospectus in order to sell their securities unless there is an available exemption. Historically, the laws in each province were different and it wasn’t easy to determine which exemptions were available.
Today, crowdfunding through a portal like Stockosaurus provides companies with an exemption to sell their securities to the public through a cost-effective process that makes capital raising more efficient.
You have a company that wants to raise up to $250,000 to fund a business idea.
You contact us to set up a crowdfunding offering and provide us with basic information about the company, the people involved, and the details of the funding you wish to raise.
We will create a funding page for you on the Stockosaurus website, which includes an offering document that meets the requirements of the provincial securities regulators.
Investors can then each buy up to $1,500 worth of securities of your company through the Stockosaurus website and submit an Interac payment to us provided that they live in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, or Nova Scotia. Stockosaurus holds this money in trust for your company until the amount raised meets the minimum amount that you decide to raise. The offering can last up to 90 days. You can raise up to an additional $250,000 in a separate offering if you wish (though no more than two offerings in any calendar year).
The company receives the funds from the offering and issues securities certificates or securities in electronic form to the investors that bought securities in the offering. Each shareholder must receive a confirmation notice within 30 days of completion of the offering with details of their purchase.
The company files the offering document, as well as reports to securities regulators in each province in which securities were sold.
Create an appropriate crowdfunding page with the required information, including the offering document
Keep track of the funds raised and the number of investors who have purchased your shares
Issue shares to the investors after the offering is complete and sending a confirmation to each shareholder
Prepare the required filings following the offering
A commission equal to 5% of the funds that you raise through the crowdfunding financing, plus any applicable GST/HST;
A number of securities of your company to be negotiated.