When Eric Migicovsky raised $4.5 million US for his startup recently, the money didn't come from a private-equity firm or a handful of angel investors, but from about 30,000 people he has never met. Migicovsky's company, Allerta Inc., plowed past the $1-million US mark in 28 hours, and less than a week in, it surpassed $3.34 million US to become the most-funded project to date on the site.
Recent changes to U.S. legislation mean private companies will soon be able to solicit investment from "the crowd." On April 5, President Barack Obama signed the Jumpstart Our Businesses Startups Act into law. Among other things, the legislation will allow companies to raise up to $1 million US from smallstake investors.
The worst-case scenario, the Canadian Advanced Technology Alliance says, is startup and high-growth companies that can't find capital defecting to the more accommodating climate in the U.S.