Canada's 2014 Leading Corporate Lawyers START-UPS | 27
Neufeld, QC,
Richard A.
Dentons Canada LLP
(403) 268-7023
richard.neufeld@
dentons.com
Mr. Neufeld focuses on
environmental, regulator y
and Aboriginal law. He
advises on project approval
and compliance matters
relating to energy, mining
and pipeline developments.
He also represents
project proponents
before various tribunals.
Nixon,
Christopher W.
Stikeman Elliott LLP
(403) 266-9017
cnixon@stikeman.com
Mr. Nixon specializes
in M&A, corporate
fi nance, joint ventures,
reorganizations and
governance, representing,
among others, oil &
gas exploration and
oilfi eld service entities
and investment dealers
in Canada, the US,
Europe and Asia.
Olasker, Patricia L.
Davies Ward Phillips
& Vineberg LLP
(416) 863-5551
polasker@dwpv.com
Ms. Olasker focuses on
public company M&A,
including private-equity
acquisitions, proxy
contests, and international
and domestic corporate
fi nance, including public
market derivatives,
high-yield debt and
MJDS off erings. Adjunct
Professor at Osgoode Hall.
Nitikman, Joel A.
Dentons Canada LLP
(604) 443-7115
joel.nitikman@
dentons.com
Mr. Nitikman focuses
on resolving tax disputes.
He has extensive
experience in federal
and provincial income
tax and commodity tax
litigation. His mandates
include acting for
Athabasca Potash in its
$341-billion acquisition
by BHP Billiton.
O'Callaghan, Peter J.
Blake, Cassels &
Graydon LLP
(604) 631-3345
peter.ocallaghan@
blakes.com
Mr. O'Callaghan's practice
focuses on corporate
fi nance and M&A
transactions in the mining
sector. Recognized
in, among others, the
Lexpert®/American Lawyer
Guide to the Leading 500
Lawyers in Canada and
e International Who's
Who of Mining Lawyers.
Orr, William K.
Fasken Martineau
DuMoulin LLP
(416) 865-4360
worr@fasken.com
Mr. Orr is recognized as
one of Canada's leading
lawyers in advising boards
of directors and their
committees on corporate
governance issues,
mergers & acquisitions,
capital markets,
securities regulation and
multinational transactions.
closed, 68,928 people had pledged to buy
a Pebble, raising US$10.3 million and
confi rming the fl edgling company had a
commercially saleable idea.
"You can defi nitely validate your prod-
uct much faster by going out and raising
funds for it," says Garber, who has clients
who have used crowdsourcing.
Garber himself is emblematic of the
new-economy start-up clients pushing
their way through to the top. He is still in
his twenties and excited about all the new
possibilities. Since formally starting this
program in the fall, he says, a few of Den-
tons' start-up clients have already been ac-
cepted into the new cohort of Y Combi-
nator, a world-class accelerator in Silicon
Valley. "We're really excited about them
coming back to Canada. It's a great time
for some of these early stage companies."
anks to securities regulators, it's pos-
sible things are about to get even better.
Funding
For those who don't work in the so-called
collaborative economy, a quick primer:
Crowdsourcing and crowdfunding are
diff erent beasts. While both involve ac-
cepting money from strangers on the In-
ternet, crowdsourcing typically involves
either a donation or a pre-purchase. You
contribute early, as with Pebble, and you
get a discount or special promotion when
the product comes to market.
Crowdfunding, on the other hand,
allows strangers to invest directly as eq-
uity holders through a similar Internet
platform. With no exemption to the pro-
spectus requirements, it has been strictly
verboten under provincial securities laws.
at is changing. Saskatchewan's
securities regulator has released a pro-
posed equity crowdfunding framework
that would allow issuers to raise up to
$100,000 twice a year, and limit investors
to a total of $1,000 annually for crowd-
funded investments. e Ontario Secu-
rities Commission is looking at a regime
that would allow entrepreneurs to raise
up to $1.5 million a year and cap invest-
ments at $2,500 each up to $10,000 a
year. e U.S. Securities and Exchange
Commission is also proposing a crowd-
funding rule that would let small busi-
nesses raise up to $1 million a year by tap-
ping unaccredited investors.
Gary Solway, managing partner of the
Technology, Media & Entertainment
Group at Bennett Jones LLP, says the
limits refl ect concerns over the potential
for fraudulent pitches.
" e big worry is that any start-up in-
vestments are very high risk, technology
investments in particular, so regulators
are concerned about small investors los-
ing their money — even if it's in good
faith, as well as about fraud."
It's not clear in the wired world wheth-
er start-ups would have to limit them-
selves to a single jurisdiction.
Once the regulators settle on rules,
crowdfunding could help trigger a para-
digm shi .
What makes crowdfunding so potent
is that regular people could have the
chance to invest early in the next Shopify,
now valued at more than $1 billion; the
next Zynga, which has a market capital-
ization over US$3 billion and could be
going public; or the next Spotify, which
is valued north of US$4 billion.
Solway says the market in the US,
which is slightly ahead, is already coming
up with ways of separating out the more
promising projects.
"What's happening in Silicon Valley is
that some of the major well-known ven-
ture capital fi rms are looking at setting up
funds specifi cally to do crowdfunding,"
says Solway. "So they'll be angel investors
in a start-up – they'll have done a due dili-
gence – and then they promote that on a
crowdfunding site. Suddenly a lot of oth-
er people are going to be very interested
because they're totally A-list venture capi-
tal fi rms."
e eff ect promises to be the equiva-
lent of mainlining steroids into the veins
of the start-up economy.
