In comments filed with the Ontario Securities Commission (OSC), Interactive Ontario (IO) has urged the OSC to quickly approve proposed prospectus exemptions for crowdfunding capital.
IO supports these exemptions as a means to increasing the available pool of capital for Ontario digital media companies. IO believes acting prior to full implementation of the Jobs Act in the United States would create a competitive advantage for Ontario companies.
The interactive digital media industry in Ontario employs approximately 16,000 people; two-thirds of those are working at companies with ten or fewer employees. Though Ontario has a supportive environment for interactive digital media that includes incentives such as the Ontario Interactive Digital Media Tax Credit, access to capital is an ongoing challenge for Ontario’s small-and-medium enterprises in this field. Crowdfunding and capital were two of the most-discussed topics at IO’s recent conference dedicated to the business of games, GameON: Finance.
“Canadian digital entertainment products are highly export-oriented and many Canadian properties have seen immense success outside of Canada in recent years,” said Interactive Ontario President & CEO Donald Henderson. “Giving companies the opportunity to access funding from investors across the globe will expand the capital pool and allow them to flourish even further.”
IO considers the proposed terms and conditions in OSC’s crowdfunding exemption Concept Idea to be sound. In particular, Interactive Ontario is supportive of OSC proposals to:
- limit the exemption to Canadian Issuers
- not impose any requirement to spend proceeds in Canada
- have a limit of $1.5 Million on offerings within any 12 month period
- allow the use of social media to direct investors to the funding portal or the issuer’s website
- limit an investor’s single investment to $2,500 and no more than $10,000 per year total
- impose no restrictions on the nationality of the purchaser
- impose minimal mandated information disclosure requirements
Interactive Ontario agrees with these proposals, which represent a positive step forward for Canadian companies and investors, as they strike a reasonable balance between permitting SME IDM companies to raise material capital amounts while ensuring investors are not exposed to excessive risk.
Source: Interactive Ontario