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The Start-Up Crowdfunding Exemption permits Canadian private-stage companies with operating businesses to raise up to $1.5 million in any 12-month period by distributing eligible securities valued at no more than $2,500 (or $10,000 if suitability advice has been obtained) per investor in reliance on a brief offering document and risk acknowledgment signed by each investor. The Start-Up Crowdfunding Exemption under National Instrument 45-110 Start-Up Crowdfunding Registration and Prospectus Exemptions (NI 45-110) allows start-ups and other early-stage ventures to use equity crowdfunding to finance their activities.

An offering using the Start-Up Crowdfunding Exemption (a crowdfunding distribution) must be completed through a funding portal compliant with NI 45-110. Issuers wishing to offer eligible securities in a crowdfunding distribution must meet certain eligibility criteria and conduct the offering in compliance with the requirements set out in NI 45-110, which are summarized below.

Issuer Eligibility


To be eligible to distribute eligible securities (including common shares, non-convertible preferred shares, and securities convertible into either of the foregoing) of its own issue to investors using the Start-Up Crowdfunding Exemption, an issuer must have its head office in Canada and not be a reporting issuer in any jurisdiction of Canada or the equivalent in any foreign jurisdiction.

The Start-Up Crowdfunding Exemption is not available to an issuer that is an investment fund or whose only operations are operations to identify and evaluate assets or a business with a view to completing an investment in, merger with, amalgamation with or purchase of the securities of another issuer, or the acquisition of a business. The Start-Up Crowdfunding Exemption is also not available to an issuer if a founder, director, officer or control person (a principal) of the issuer, any affiliate of the issuer, issuer engaged in a common enterprise with the issuer or an affiliate of the issuer, or an issuer whose business is founded or organized by a person or company that founded or organized the issuer (collectively, the issuer group) is also a principal of the funding portal.

Offering / Use of Funds Limitations


Issuers using the Start-Up Crowdfunding Exemption are limited to raising $1.5 million in reliance on this prospectus exemption in any 12-month period, which limit includes any amounts raised in crowdfunding distributions by other issuers in the issuer group during that period.

Under the Start-Up Crowdfunding Exemption, issuers are limited to distributing to any one purchaser (who must purchase as principal) 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.

The Start-Up Crowdfunding Exemption is not available to an issuer that intends to use the proceeds of the offering to invest in, merge with, amalgamate with or purchase securities of an issuer, or to acquire a business, unless the issuer or the business is identified in the issuer’s offering document. The Start-Up Crowdfunding Exemption is also not available to an issuer if there is a concurrent crowdfunding distribution by another member of the issuer group for the same purposes as described in the offering document.

No commission, fee or similar payment can be paid by the issuer to any member of the issuer group, or any principal, employee or agent of a member of the issuer group in connection with a crowdfunding distribution.

Offering Document / Risk Acknowledgement


Issuers intending to conduct a crowdfunding distribution must complete an offering document in the prescribed form (Form 45-110F1 Offering Document) and provide it to the funding portal for posting before the 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. If, during the offering period, the issuer becomes aware that its offering document is not accurate, or is no longer accurate, it must promptly advise the funding portal of that fact, amend the offering document so that it is accurate, and provide the amended offering document to the funding portal for posting on the funding portal's platform. Investors must complete a risk acknowledgment in the prescribed form (Form 45-110F2 Risk Acknowledgement) acknowledging certain risks relating to the offering and confirming that the investor has read and understands the issuer’s offering document.


Investors must 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).



A crowdfunding distribution must close no later than the 90th day after the date the issuer’s offering document is first made available to a prospective investor on the funding portal’s platform. The issuer must not close the crowdfunding distribution 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, an issuer (or the funding portal on behalf of the issuer) must deliver to each purchaser a written confirmation setting out the date of 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.

No later than the 30th day after the closing of the crowdfunding distribution, the issuer must file with each securities regulatory authority both the issuer’s completed offering document and a report of exempt distribution in the prescribed form (Form 45-106F1 Report of Exempt Distributions).

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