No other Canadian groups appear to havetaken up the issue, and, so far, Canadian
securities regulators and legislators haven’t
acted either.Through crowdfunding sites likeVancouver-basedSoKapand New York-basedKickstarter,people contribute a few,
or a few hundred, dollars to a business,project or a good cause.
The problem is, until laws change, it’s a
legal grey area. Asking for donations to acharitable project is fine. Seeking moneyfor a business may be, but not if it runs
afoul of securities legislation. That’s why
many businesses that use crowdfundingoffer a product or other incentive tocontributors, rather than an ownershipstake.
Crowdfunding is “another resource t
hat can be used to really grow and
foster business growth,” says John Reid, CATAAlliance president. If theUnited States makes crowdfunding easier while Canada doesn’t, Mr.
Reid believes more entrepreneurs may head south looking for cash.In Canada, as in the United States, selling stock publicly involvesextensive documentation and regulatory requirements.