How to Raise Venture Capital in Canada in 2026

To raise venture capital in Canada, most startups sell shares or SAFEs to accredited investors under National Instrument 45-106, which removes the need for a prospectus, then file a Form 45-106F1 report within 10 days. Founders also protect CCPC status to keep the enhanced SR&ED tax credit, and raise from US investors under Regulation D when the round crosses the border.

This guide is general information, not legal or tax advice. Canadian rules vary by province and change over time; your counsel and accountant should confirm how they apply to your company and each investor. Dollar amounts are Canadian dollars unless stated.

Who regulates startup fundraising in Canada?

Each province and territory has its own securities regulator, but they apply a common set of prospectus exemptions through National Instrument 45-106.

There is no single national securities regulator. The Ontario Securities Commission, the British Columbia Securities Commission, Quebec's AMF and the other provincial and territorial regulators coordinate through the Canadian Securities Administrators. For a private raise, the instrument that matters is NI 45-106 Prospectus Exemptions.

The basic rule: any sale of securities, including shares, SAFEs and convertible notes, needs a prospectus unless an exemption applies. A prospectus is an expensive public-offering document no seed company produces. So every private round in Canada is built on exemptions, and the exemption that applies depends on who the investor is and which province they live in.

Two consequences for founders:

What are the main prospectus exemptions for startups?

Most rounds use the accredited investor exemption; the family, friends and business associates exemption and the private issuer exemption cover early money from people you know.

Who qualifies as an accredited investor in Canada?

An individual qualifies with more than $1 million in financial assets, $200,000 in net income ($300,000 with a spouse) in each of the last two years, or $5 million in net assets.

The individual tests under NI 45-106:

Individuals who qualify on the first two tests, or on the net-assets test, must sign a Form 45-106F9 risk acknowledgement before investing. Individuals with more than $5 million in financial assets are exempt from that form. Keep the signed forms and the investor's representations in your closing file; regulators and later investors both ask for them.

Compared with the US: the Canadian income and net-asset tests use different amounts and the net-asset test includes the principal residence, so a Canadian angel and a US angel with similar wealth can land differently. Do not apply the US Rule 501 definition to Canadian residents.

What filings does a Canadian private raise require?

File a Form 45-106F1 report of exempt distribution with the regulator in each province where you sold, within 10 days of the distribution, and pay the provincial fees.

Rounds that take some money from Ontario angels, some from BC, and a US fund mean three regulatory tracks. Plan the filing calendar at the start of the round, not after the money arrives.

How does start-up crowdfunding work in Canada?

NI 45-110 lets an early-stage company raise up to $1.5 million per distribution from the public through a registered or exempt funding portal, with small per-investor limits.

National Instrument 45-110 harmonized start-up crowdfunding across Canada from 2021. Its main limits:

Crowdfunding fits consumer brands with a community. It is a poor fit for a venture-track company that will raise from funds, because hundreds of small holders complicate later rounds.

How do Canadian tax rules shape a venture round?

A Canadian-controlled private corporation gets the enhanced SR&ED refundable tax credit, and its founders may qualify for the lifetime capital gains exemption, so losing CCPC status has a real cost.

Under the Canada Revenue Agency's definition, a CCPC is a private corporation resident in Canada that is not controlled by non-residents, by public corporations, or by a combination of them. That status matters for three reasons:

CCPC status is tested on control, including control in fact. A US fund taking a large stake, or a share structure that gives non-residents control, can end it. Model the cap table after the round before you accept terms that shift control.

Non-dilutive money stacks with equity: the NRC Industrial Research Assistance Program funds technology projects at small companies, and many founders use it alongside a seed round.

Should a Canadian startup flip to a Delaware company?

Not by default; flip only when a specific US investor or exit path requires it, because flipping usually ends CCPC status and its tax benefits.

Many US funds invest in Canadian companies directly. A Canadian company can sell to US accredited investors under Rule 506 of Regulation D and file a Form D, and can sell outside the US under Regulation S. Some US funds prefer a Delaware parent for familiarity, their own fund terms, or a later US IPO.

The trade-off:

Decide with tax counsel, before the term sheet, not as a closing condition from a US lead.

Who invests in Canadian startups?

Early-stage money comes from angels and angel groups, Canadian VC funds, BDC Capital, provincial funds and US investors who invest across the border.

Targeting matters more than volume. A Toronto fintech raising a $3 million seed needs investors who write seed checks, back fintech and invest in Canadian companies, not a list of every fund with a Canadian address. GIGABOOST filters 340,000+ verified investors on stage, check size, sector and geography and scores each on 15 dimensions of fit.

Frequently Asked Questions

What is the accredited investor exemption in Canada?

It is the prospectus exemption in National Instrument 45-106 that lets a company sell securities to accredited investors without a prospectus. Individuals qualify with more than $1 million in financial assets, $200,000 in net income ($300,000 with a spouse) in each of the last two years, or $5 million in net assets. Most individual accredited investors must sign a Form 45-106F9 risk acknowledgement.

Do Canadian startups need to file anything after a private round?

Yes. Under most exemptions, the company files a Form 45-106F1 report of exempt distribution within 10 days of the sale with the regulator in each province where purchasers live, and pays the provincial fee. Some provinces also require offering materials to be filed.

Can a Canadian startup raise money from US investors?

Yes. A Canadian company can sell to US accredited investors under Rule 506 of Regulation D and file a Form D with the SEC, while complying with Canadian rules for its Canadian investors. Many US funds invest in Canadian companies directly without requiring a Delaware parent.

Does taking US venture capital affect SR&ED credits?

It can. The enhanced refundable SR&ED credit is available to Canadian-controlled private corporations, and a company controlled by non-residents is not a CCPC. Model control after each round, including control in fact, before accepting terms from foreign investors.

Can Canadian startups use SAFEs?

Yes. SAFEs are securities in Canada and need a prospectus exemption like shares do. Canadian law firms publish versions adapted to Canadian corporate and tax law, and founders should use one rather than the unmodified US form.

How much can a startup raise through crowdfunding in Canada?

Under NI 45-110, an eligible startup can raise up to $1.5 million per distribution through a funding portal, subject to a 12-month aggregate cap. Individual investors are limited to $2,500 per investment, or $10,000 if a registered dealer has advised that the investment is suitable.