| Most Canadian crowdfunding sites are not associated with a licensed Exempt Market Dealer (“EMD”). These sites typically raise capital by the sale of securities to the public through non-registered or online crowdfunding portals. They are not subject to regulatory requirements such as audits, operating capital and making timely reports to clients. | Fundscraper is an Exempt Market Dealer, a fully registered government regulated securities dealer specialized in real estate offerings and registered in Ontario, British Columbia, Alberta, Quebec, New Brunswick, and Prince Edward Island. As such, Fundscraper files regular reports to and is subject to periodic audits by government regulators such as provincial securities commissions. It meets government requirements for operating capital and must make timely and periodic reports to clients. |
| Most crowdfunding platforms have no requirement to undertake extensive due diligence on their offerings. The onus is on the investor to do their own extensive due diligence.
Furthermore, if they are not EMDs, they are not allowed to advise any investor or recommend on matters dealing with the merit, advisability, and suitability of their investment products. | All investment opportunities on the Fundscraper marketplace are pre-vetted by an experienced investment committee with over $5 billion in combined transaction experience.
As an EMD, Fundscraper is obligated to complete a Know Your Client and Know Your Product assessment for each investor. |
| Crowdfunding issuers are not obligated to pay out their bottom line. | Fundscraper’s technology is designed to allow for competitive fees. Many of Fundscraper’s listed offerings such as Private MIC’s are obligated to pay out 100% of their profits and private REITs payout a minimum 90% of distributable income by regulatory requirements. |
| Generally no continued or minimal regulatory reporting responsibility under the crowdfunding portal and crowdfunding exemptions. | Extensive regulatory reporting obligations. |
| Crowdfunding opportunities may fail to be fully funded and leave an investor disappointed. | Fundscraper through related entities invests its own funds or capital from its balance sheet to ensure the deals are fully funded regardless of the amount raised from independent investors. That way, projects can move forward as intended. |
| Risk factors are not always outlined in detail in exempt crowdfunding portals. Investments tend to be more speculative and include all different industry sectors, asset classes and early stage concept based ideas. | Fundscraper provides a detailed list of risk factors, has a rigorous due diligence process on all its listings and endeavours to list investment offerings with management teams that have a proven track record. Investments thus tend to be less speculative, are backed by hard assets, and can have fixed income attributes. Fundscraper also ONLY focuses on private real estate offerings that have tangible security value. |
| Very few crowdfunding platforms serve the role of asset manager. | In many cases, Fundscraper, through its investment entities, serves as the asset manager through investor rights agreements with issuers, and serves to represent the interests of investors on specific projects. |
Registered Funds Eligibility | Not all crowdfunding platforms have offerings that are eligible for investing from your registered plan accounts (such as TFSAs and RRSPs). | Many of Fundscraper’s investment offerings allow you to invest from your TFSA, and RRSP plan accounts. |
| Crowdfunding platforms tend to have very low investment minimums, usually starting from $100, in some cases even from as low as $1. | Fundscraper has offerings with investment minimums from $1,000 to $250,000 per investment order ranging from $25,000 to $20,000,000 total offering sizes per project raise. |