Last week Crowdfund Insider interviewed Sandi Gilbert, CEO and co-founder of SeedUps Canada, on the convoluted regulatory environment established in Canada. The article was in part a follow-up to an earlier article that described the rule-making approach in Canada as Dead in the Water. Unfortunate yes. But policy makers can address the challenge with a bit of motivation and leadership. For now, though, SeedUps Canada is changing tack. Plotting a navigational change forced upon them by Canadian regulators. In a blog post earlier today, Gilbert stated;
“For the past three years, we’ve been at the forefront of advocating for change in the way Canada’s early stage companies access capital and engaged venture investors find investment. Credited as the technology that supported the “First Ordinary Investor” to take an online stake in a private company, the team at SeedUps has been encouraged by the innovation movement taking hold in Canada and the regulators’ efforts to expand capital formation for early stage companies….We’re now two years down the road and much has changed. The securities regulators have implemented complicated “crowdfunding” rules that create confusion for both the company raising capital and the investors wanting to invest.”
Confusing and myopic rulemaking comes with a cost. Unfortunately, it is Canadian entrepreneurs, regular investors and the economy that will lose the most. But for SeedUps.ca, the investment crowdfunding platform will now focus on a professional investor driven model. Gilbert outlined the new approach;
“Angels that want to fund a company, yet don’t have enough cheque writers at the right time, can present their companies to an engaged investor community to fill the round. VCs can find additional capital for their portfolio companies – all in an efficient, transparent manner where documents are executed online. And better yet, individual investors are pooled together into one shareholder, keeping the cap table clean for the next round of investment.”
SeedUps has always presented a complete portfolio of tech tools to facilitate online funding rounds. These tools will now be pointed in a slightly different direction. Gilbert assures her followers she has not given up and will continue to advocate for positive change that benefits everyone in Canada. But Gilbert also states “we’re leaving the Crowd behind us – for now.”