Equity Crowdfunding In The Americas

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We’ve mentioned before why Scotland is a perfect place for crowdfunding but what about the rest of the world? This post will be a summary of what is going on with equity crowdfunding in North and South America. Heading from North to South:

Canada

Equity crowdfunding only on a regional basis, no national legislation but Ontario and Saskatchewan have pending equity crowdfunding legislation.

USA

The US has lots of equity crowdfunding platforms for accredited investors, but legislation is still pending to open up equity crowdfunding for anyone. In the US an accredited investor is someone with a net worth (excluding property) of over $1,000,000 or a personal income of $200,000, or a household income of $300,000 for the past two years. Either the platform or the company must take “reasonable steps” to verify this income which can be costly and time consuming – YOU CAN’T JUST TICK A BOX.

The JOBS act was passed in 2012, and has enabled general solicitation which has led to equity crowdfunding for accredited investors. However, the SEC has failed to meet its October 2013 deadline for publishing guidelines for ALL investor to get involved with equity crowdfunding. Some states have passed their own crowdfunding laws however they do not apply to any intrastate business. For more info on specific US companies see the table below:

US Equity Crowdfunding Table

US equity Crowdfunders table

Mexico

Equity crowdfunding is legal in Mexico for accredited investors, although the required income is $160,000, which is $40,000 less than in the US. Sites like crowdfunder.mx have already taken advantage of the growing market.

Chile

In Chile to avoid the strict regulations for public offerings there is no general solicitation but a company can invite any number of investors and there is no income or accreditation process in order to invest. The most successful platform to date is Broota which allows anyone to invest as little as $60.

Brazil

Brazil also has a branch of Broota as well as a company called Eusocio which is a joint venture with crowdcube. The regulations in Brazil are still unclear but so far the equity crowdfunding has been steadily growing.

This list does not include those Latin American countries without a large crowdfunding presence, although there are already rewards based crowdfunding platforms such as Idea.me that have a presence throughout the whole region, and it is likely that as more formal equity crowdfunding legislation is passed that equity crowdfunding platforms will expand across the Americas in the same way.

Not just the rich

So at present, for the most part equity crowdfunding is restricted to the rich of the Americas – here’s hoping comprehensive crowdfunding regulations will be implemented soon to enable the crowd to actually participate in equity crowdfunding.

andrew@sharein.com'

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