Crowdfunding and Exempt Market Dealers in Canada - A Business Perspective

The landscape for raising capital in Canada is undergoing a quiet revolution. With over two hundred eighty-five million dollars now raised through platforms like FrontFundr, Equivesto, and Addy, the rise of equity crowdfunding and Exempt Market Dealers (EMDs) is transforming how small and mid-sized businesses secure funding. This is not just about startups—it is also reshaping real estate development, community ventures, and the future of retail investment.

At the heart of this shift are two powerful tools:

• NI 45-110, the Start-Up Crowdfunding Exemption, which allows private companies to raise up to one million five hundred thousand dollars annually with minimal disclosure; and

• NI 45-106, the Offering Memorandum Exemption, which permits unlimited capital raises with more structured reporting.

Together, these exemptions have enabled Canadian companies to bypass traditional venture capital routes and instead build broad investor communities—legally, efficiently, and often faster.

Why This Matters for Developers and Entrepreneurs
Raising funds online no longer requires chasing accredited investors one by one. Platforms like Equivesto and FrontFundr now offer structured pathways to reach both retail and accredited investors across the country. Issuers gain access to thousands of small investors, while Exempt Market Dealers ensure compliance, verify investor eligibility, and handle the complex paperwork.

But it is not free money. Platform costs usually include:

• Upfront listing fees (often around five thousand dollars),

• Success-based commissions (typically five to ten percent),

• Legal, escrow, and marketing expenses, and

• Sometimes equity or warrant dilution.

For real estate ventures, platforms like Addy and BuyProperly offer different models. Instead of upfront fees, they often take a co-ownership stake or charge ongoing management fees. These models appeal to developers seeking frictionless access to capital but come with tradeoffs in control and returns.

Not All Platforms Are Equal

• FrontFundr is ideal for consumer-facing startups with brand visibility and traction.

• Equivesto excels with early-stage issuers that value control and lower investor friction.

• Addy built a mass retail model for real estate but is now transitioning to full regulatory compliance after enforcement scrutiny.

• Fundscraper serves high-net-worth investors with a boutique approach.

• Willow, once promising, is now seen as a cautionary tale.

Where the Policy is Heading
Since Canada harmonized its crowdfunding rules in 2021, investor access has improved, but challenges remain. Capital raise limits, contribution caps, and complex compliance burdens still hinder broader adoption. Recent regulatory updates show promise, including more flexibility for reinvested dividends and streamlined reporting for real estate offerings.

Still, questions remain about investor liquidity, the need for secondary trading mechanisms, and whether existing rules strike the right balance between protection and access.

The Bottom Line
Crowdfunding is no longer a fringe tactic. It is a serious tool for entrepreneurs, developers, and private companies looking to grow without relying on traditional capital sources. Issuers that prepare thoroughly, partner with a compliant Exempt Market Dealer, and activate their networks are well-positioned to succeed.

Want to See the Full Picture?
UPL1FT Consulting has compiled a detailed national whitepaper comparing platform models, exemption requirements, and regulatory risks. For issuers, developers, or municipalities exploring crowdfunding, our research provides the strategic guidance needed to proceed with confidence.

Contact us at www.upl1ft.com to access the full whitepaper and unlock our advisory services tailored to your capital goals.