Securities regulators in North America have been trying to address the difficulty that small businesses have in raising equity for many years now. In April of 2012 the US introduced the JOBS ACT –

Jumpstart Our Business Startup (“JOBS”) Act

On April 5, 2012 President Barrack Obama of the United States signed the JOBS Act into law with a remarkable level of bipartisan support.  The intent was to update the U.S. Federal Security laws and make it legal for entrepreneurs to use crowdfunding to raise a limited amount of early-stage equity-based financing. Congress gave the Security Exchange Commission 270 days to draft the rules necessary to implement the legislation.

However it wasn’t until May of 2016 that crowdfunding portals in the US were open to anyone other than “accredited investors”.  A few months earlier – in February of 2016 – the BC Securities Commission introduced regulations that allowed startups to raise small amounts of money from BC-based Crowdfunding portals…

However a quick review of the National Crowdfunding Association of Canada’s directory (see above) reveals just how much this resembles the wild west. Many of the BC portals have abandoned their websites, some portals have no listings – and the busiest I found showed a single active listing, along with many “future listings”.

One of the equity portals listed – – has already pivoted away from its origins as an equity crowdfunding portal:

We have evolved to be better aligned with the needs of these companies and the investors wanting to back them by focusing our efforts on a lead investor, member network model. As a result of these changes, we are no longer operating as a crowdfunding portal.

Given the current state of flux in this sector, it may be wisest for early stage companies to look at crowdfunding as a way to launch creative content (eg. video games or internet-based tv series) or new products using Kickstarter or Indiegogo…

The upfront compliance and regulatory costs associated with equity crowdfunding are very high. Admittedly it costs less than going public, however existing equity crowdfunding portals don’t appear to have much, if any traction. As a result those upfront costs will almost certainly be stranded.