top of page


The Start-Up Crowdfunding Exemption under National Instrument 45-110 Start-Up Crowdfunding Registration and Prospectus Exemptions (NI 45-110) allows average, everyday Canadians to invest in opportunities traditionally available only to accredited investors and those closely connected to such ventures. Investors can acquire eligible securities of Canadian companies (issuers) valued at no more than $2,500 (or $10,000 if suitability advice has been obtained) after reviewing a brief offering document and signing a risk acknowledgment on a funding portal.

The process for purchasing eligible securities using the Start-Up Crowdfunding Exemption (a crowdfunding distribution) in compliance with the requirements set out in NI 45-110 are summarized below.


Funding Portal


Investors acquiring securities in an offering using the Start-Up Crowdfunding Exemption (a crowdfunding distribution) will be completed through a funding portal compliant with NI 45-110. Under NI 45-110, a funding portal may be operated by an investment dealer or exempt market dealer (registered funding portal) or pursuant to the registration exemption available in NI 45-110 (exempt funding portal). Registered funding portals are required to provide advice to investors about the suitability of the eligible securities for the investor (Suitability) and have additional obligations for assessing issuers and proposed offerings of securities (Know Your Product) and investors (Know Your Client) in connection with their obligations as a registered dealer. Exempt funding portals are prohibited from providing Suitability advice to an investor and do not have the Know Your Product or Know Your Client obligations of registered funding portals. Additionally, while registered funding portals can receive commissions, fees and other similar payments from investors, exempt funding portals are prohibited from taking such compensation and may be compensated only by the issuer conducting the crowdfunding distribution.


Investors accessing a funding portal will need to acknowledge that they are accessing a platform that, in the case of a registered funding portal, is operated by an investment dealer or exempt market dealer (as applicable) that will provide advice about the suitability of the eligible security, or, in the case of an exempt funding portal, is not registered under securities legislation in any jurisdiction of Canada and will not (and is not authorized to) provide advice about the suitability of any security for investment, or the merits of any investment.


Securities Offered


Investors can purchase eligible securities (including common shares, non-convertible preferred shares, and securities convertible into either of the foregoing) of issuers with a head office in Canada that are not reporting issuers in any jurisdiction of Canada or equivalent in any foreign jurisdiction using the Start-Up Crowdfunding Exemption, subject to certain exceptions.


Investment Limits


Under the Start-Up Crowdfunding Exemption, an investor (who must purchase as principal) can purchase eligible securities valued at no more than $2,500, or, if the purchaser has obtained advice from an investment dealer or exempt market dealer (registered dealer) that the investment is suitable for the purchaser, $10,000.


Offering Document / Risk Acknowledgement

Investors considering investing in a crowdfunding distribution can review an issuer’s offering document, which is posted on the funding portal when an offering commences. The offering document discloses basic information about the issuer’s business and the offering, including how the issuer intends to use the funds raised and the minimum offering amount required to close the crowdfunding distribution. An offering document may be amended during the offering period to ensure it remains accurate, in which case it will be posted to the funding portal. Investors must also complete a risk acknowledgment acknowledging certain risks relating to the offering and confirming that the investor has read and understands the issuer’s offering document.


Investors will enter into a subscription agreement that provides that the investor may withdraw from the agreement to purchase the eligible securities by delivering a notice of withdrawal to the funding portal not later than midnight on the 2nd business day after the later of (i) the day on which the investor enters into such agreement and, (ii) the day on which the funding portal notifies the investor of the amendment, if the offering document has been amended (withdrawal rights).


Minimum Offering Amount Not Raised / Withdrawal Rights Exercised

If an issuer has not successfully raised the minimum offering amount by the 90th day after its offering document is first made available on the funding portal’s platform or an issuer has notified the funding portal that it is withdrawing its crowdfunding distribution, no later than 5 business days after the 90th day or the notice, as applicable, the funding portal will notify each investor in that crowdfunding distribution that funds have been returned or are in the process of being returned and take reasonable steps to return all funds to each investor.


The funding portal must also return all funds to an investor within 5 business days of receiving notification from an investor that they are exercising their withdrawal rights.



A crowdfunding distribution will close no later than the 90th day after the date the issuer’s offering document is first made available on the funding portal’s platform but will not close until the issuer has raised the minimum offering amount stated in the offering document either through subscriptions to the crowdfunding distribution or any concurrent distribution under one or more other prospectus exemptions.



Within 30 days after the closing of an offering using the Start-Up Crowdfunding Exemption, the issuer (or the funding portal on behalf of the issuer) will deliver to each investor a written confirmation setting out the date of the investor’s subscription and of closing, the quantity and description of the eligible security purchased, the price per security, and the total commissions, fees and other payments paid to the funding portal, along with a copy of the issuer’s completed offering document.

bottom of page