“My message to the film and TV industry is this: you already have an advantage [over other industries] in that you can tell a story; you already have the skill of being able to grab people’s attention. What it comes down to is putting that in a business plan.”

So says Oscar Jofre, CEO and founder of KoreConX, a Toronto-based equity crowdfunding service platform that hosted a series of educational seminars on the topic across Canada in November.

With equity-based crowdfunding opening up in Canada – this spring, regulatory changes opened up the possibility for qualifying companies/entities in British Columbia, Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia – the time is ripe for producers with projects in development to consider the option.

But despite the fit of film and TV productions (when operated as a single-purpose vehicle) for equity-based crowdfunding, complying with the regulations set by equity crowdfunding “portals” – online marketplaces that handle the buying and selling of unregistered securities – is proving problematic for screen-based productions, Jofre says. Specifically, he points to the extensive disclosure requirements and the associated vetting process as barriers to film/TV projects meeting the standards crowdfunding portals require.

Of the 12 equity crowdfunding portals currently operating in Canada, Jofre points to Vancouver-based portal Frontfundr as the one attracting the most attention from the production industry. Until the launch of Frontfundr in May, there wasn’t a portal which catered to screen-based productions. But so far, while Frontfundr has been approached by a number of individuals and companies with film and television projects, deals have fallen short because these businesses cannot meet the regulatory requirements of the portal.

“Is there an opportunity? Yes. Is there a demand? Yes. Now, it’s a question of can these companies get ready?” said Jofre of the potential for the film and TV sector.

It’s early days, he notes, adding that it could reach a stage where entire portals exist solely for film and TV. “One of the things I’ve been encouraging people to think about is, is there a chance to launch an equity crowdfunding portal for the film industry?” said Jofre.

For his part, Jofre says KoreConX will next year begin hosting workshops focused specifically on helping companies and individuals prepare the relevant documents in order to comply with due diligence regulations. In the meantime, KoreConX workshops have focused on equity crowdfunding 101-style events.

Here’s a brief primer on the exemptions currently in place under which companies (across industries) in Canada can raise money through equity crowdfunding:

Offering Memorandum (OM) Exemption: This exemption, described by Jofre as the “holy grail” of equity crowdfunding, is currently available to companies in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia, and is set to go live in Ontario in January 2016. Through the OM exemption, private companies across Canada can raise unlimited funds from both eligible and non-eligible investors. For those wishing to invest, the allowed amounts vary from province to province. As an example, the rules for Ontario when they are introduced will be this: the limit for non-eligible investors is $10,000 per year, while the limit for an eligible investor will be $30,000 per year. In the case of an eligible investor that also receives advice from a portfolio manager, investment dealer or exempt market dealer, the amount is capped at $100,000.

It should be noted that Ontario-based companies are not barred from using this exemption to register with portals in qualifying provinces, however Ontario residents/investors are currently unable to invest in companies via this exemption.

Crowdfunding Exemption: This exemption only applies to companies and investors from Ontario. The total amount that can be raised is capped at $1.5 million per year, and non-accredited investors are limited to a maximum of $2,500 per investment and $10,000 per year. Accredited investors are limited to $25,000 per investment with a $50,000 annual investment limit.

The Startup Crowdfunding Exemption: Introduced in May 2015, this exemption (available in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia) allows companies to offer their securities for a window of 90 days in which they can raise up to a maximum of $250,000. Each company is entitled to do this twice in any given 12-month period.