While crowdfunding campaigns have gained attention for raising millions for films, video games and even potato salads, they’ve all be predicated on donations.
But on Friday (September 18), Vancouver-based startup Guusto became the first Canadian company to close a round of financing through equity crowdfunding.
The company wasn’t looking for donations but instead raised about $44,000 by selling shares.
Guusto has developed an app allowing people to gift restaurant food and drinks to others and co-founder Joe Facciolo said he saw equity crowdfunding as an opportunity to take investment from customers — people who were already loyal to the brand and believed in what they were doing.
“The pool of resources in Canada from angel investors is pretty limited, so we believe that this mechanism helps to deepen this pool,” he said.
Prior to May, the B.C. Securities Commission required shares could only be sold by those registered to do so.
But new exemptions adopted by B.C., Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia now allow companies to sell shares through an approved funding portal.
Guusto kept the equity crowdfunding a local affair by linking up with Vancouver-based FrontFundr to serve as the funding portal.
“There were some unknowns but they were a great team to work with,” Facciolo said.
“They worked closely with us from day one to kind of help alleviate any questions or stresses, and overall the experience was quite clean.”
He added the money raised from the equity crowdfunding campaign would go toward expanding its customer base over the next six months with the goal of breaking into the U.S. market by the first quarter of 2016.