Equity crowdfunding has been common in the US’ startup ecosystem caused in part by the JOBS Act signed by former president Barack Obama. Canada is late on the equity crowdfunding trend but it is now taking steps towards it with Vested Technology as one of the pioneering platforms. With it, Canada’s startup ecosystem could get a massive boost in support.
Vested Technology focuses on supporting early-stage business opportunities in Canada. The platform currently has a growing community of 1,200 investors. Its huge population gives budding entrepreneurs the chance to completely propel their ideas into mainstream popularity in exchange for a small stake.
CEO Dave Patterson recently sat down with SmallCapPower in an interview during the Cambridge House Extraordinary Future 2018 conference. He said that the portal is one of a kind in Canada considering how other available platforms don’t allow entrepreneurs to list their ventures without a fee paid upfront. Since Vested Technology is free, it can help encourage more entrepreneurs to put their ideas into action.
Crowdfunding is not popular in Canada as there are different regulations per province. In some cases, entrepreneurs will need to spend thousands of dollars on lawyers and other legal fees before they are able to launch their businesses. This is an issue that Patterson hopes to address when it comes to his equity crowdfunding platform.
Regarding the sudden increase of the portal’s community from zero to over a thousand in 18 months, Patterson said that it has something to do with the quality of startups they choose to house under the program. This entices more investors to participate in crowdfunding as the risks of losing their investment is lessened.
Patterson also directly communicates with investors during conferences. This is important according to the CEO as he was able to directly communicate and educate investors easily.
What entrepreneurs should know before venturing into equity crowdfunding
With an equity crowdfunding platform now available in Canada, entrepreneurs are likely to get encouraged in launching their ventures. Of course, there are quite a few things to consider before they begin doing so.
In equity crowdfunding, entrepreneurs basically open up a portion of their business for sale. Investors that place funds in companies will reap from gains once the company has graduated from the crowdfunding platform. This give and receive style makes equity crowdfunding more effective than standard crowdfunding practices as the potential for funding is greatly increased.
Entrepreneurs need only to come up with an amazing idea and marketing plan that can help them stand out in the competition.
Equity crowdfunding is expected to reinvigorate Canada’s startup ecosystem. It will create also create good relations between investors and companies as benefits will be had on both ends. As Vested Technology continues to rise in popularity, more equity crowdfunding platforms might come into play.