Indiegogo makes Canadian push as founder ‘excited’ about equity crowdfunding

Crowdfunding Web site Indiegogo is deepening its roots in the Canadian market place and closely watching as securities regulators consider allowing non-accredited investors to make small investments in startup firms in exchange for an equity stake, according to co-founder Danae Ringelmann.

Ringelmann has particularly been involved in Ontario, where she has consulted with the Ontario Securities Commission (OSC) on the prospect of allowing equity-based crowdfunding. Such a change would require the OSC to revise regulations around exempt market dealing. It held a consultation round table on the topic on June 11 and several groups have been pushing for looser regulations. Advocates argue that equity-based crowdfunding could open up the market to more capital for startups by allowing them to attract investors to fundraising campaigns in the same way a an individual might raise money for a charity before running a marathon.

“We’re very excited about equity crowdfunding,” Ringelmann says. “We’re just waiting for the regulations to be finalized to make a decision about whether we can move forward on it or not.”

The OSC started its market review in December 2012 and began collecting feedback from stakeholder groups on the topic. Toronto-based legal firm Wildeboer Dellelce is the latest to publicly jump on board the equity-based crowdfunding bandwagon. Senior lawyer Eric Apps wants to see startups in the tech, clean tech, and life sciences sectors be able to raise a maximum of $1 million per year for five years without having a prospectus or relying on high net-worth investors. Instead, a term sheet would be issued and investors would be limited to a maximum $5,000 investment.

Others such as the Exempt Market Dealers Association and i-Canada’s Invest Crowdfund Canada have also pushed for reform. Other groups, such as the Foundation for Advancement of Investor Rights have poured cold water on the momentum by describing the public as too financially illiterate for the change.

Indiegogo’s interest in the subject comes at a time when the perks-based crowdfunding site is making more overtures to the Canadian market, which represents the second-largest group of users on the site after the US. Rather than shares in their company, Indiegogo campaigns promise a “perk” such as a special product or service in return for an investment. In December the site announced Canadian currency support, local search options, and French-language support. Now it’s furthering its commitment to the currency support with a change in payments provider.

Canadian campaigns will now be able to accept payments in the local currency via credit card. It previously was only possible to accept Canadian dollars via PayPal, but Indiegogo’s new payments processor Adyen has added the service. Adyen was announced as Indiegogo’s online payments processor in March for Canada and Europe.

“It’s a testament to providing a more seamless experience, more tailored to Canadians,” she says. “Our customer base has been so strong there for so long.”

Indiegogo is also planning two events in Canada, the first one slated for June 26 in Toronto. Another one will take place in Montreal on July 11.

The free events will feature Ringelmann and several successful users of the site, giving campaign tips.

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Jim Love, Chief Content Officer, IT World Canada

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Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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