Once an issuer has exhausted friends and family members’
capital, issuers look to the following sources to fund capital
expansion and operations:
• Traditional financial institutions
• Exempt market
• Public market
• Non-traditional lenders
Historically established financial institutions have been the
primary source of capital investment for issuers.
With changes in the economic environment and adjustments
in lending and credit practices at established financial institutions
now more than ever issuers are having to seek out other forms of
The exempt market is not a new market for raising capital;
rather it is an established market, with billions of dollars being
raised and invested annually.
Generally the public markets garner a lot of attention as it
relates to capital raising, but only a fraction is raised in the public
markets as compared to the exempt market. According to the
Chair of the Ontario Securities Commission, $83 billion was
raised last year.
Some of the key differences between the exempt market and
public markets are:
• Exempt markets are generally less liquid compared to public
• Generally the amount of due diligence completed on a public
offering exceeds the amount undertaken on an exempt
• Public markets have substantially more regulation as
compared to exempt markets.
By Chris Shaule, C.A., Corporate Finance Consultant
You don’t see IIROC dealers referring
advisory work to other dealers.
The Exempt Market Dealer as Corporate Advisor