In today’s economy, startups are not just launching businesses—they’re launching the future. Yet one critical ingredient remains in short supply: early-stage risk capital. As angel investors and entrepreneurs across Ontario know all too well, the journey from ideation to commercialization is often stifled not by lack of innovation, but by lack of investment. To address this, regulators and investor communities are exploring new models to expand participation in private markets—without compromising investor protection. The US has just passed a Bill that would enable the passing of an exam to determine if an investor is Accredited. This Bill and the potential adoption of a similar rule in Ontario could have very positive impact on our innovation economy in Ontario.
Who Can Invest? A Look at Ontario’s Current Rules
In Ontario and across Canada, individuals can currently invest in the exempt market—private companies raising capital without a formal prospectus—if they meet the “accredited investor” definition under securities law. This includes individuals who:
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Earn at least $200,000 annually (or $300,000 with a spouse) in each of the past two years; or
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Hold net financial assets exceeding $1 million (excluding a primary residence); or
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Possess net assets of $5 million or more (including real estate and investments).
These thresholds are designed to ensure that investors can tolerate the high risk, illiquidity, and longer time horizons typical of early-stage investing. But here’s the catch: wealth does not always equal sophistication. A surgeon or an engineer may not meet the income bar, yet could possess far more relevant insight into biotech or cleantech than a high-earning landlord. It’s time we recognize that—and do something about it.
Ontario’s Self-Certified Investor Pilot: A Welcome Step
In 2023, the Ontario Securities Commission (OSC) launched a promising pilot: the Self-Certified Investor (SCI) exemption. This groundbreaking initiative—now in its second 18-month phase—allows individuals with specific professional designations or deep expertise in a sector to invest up to $30,000 annually in private companies without a prospectus, even if they don’t meet the traditional accredited investor tests.
AIO applauds this direction. We believe the SCI exemption brings value to Ontario’s innovation economy in three major ways:
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It democratizes capital formation by recognizing non-wealth indicators of investment competence;
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It deepens the knowledge base of angel groups by welcoming industry experts into the ecosystem; and
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It complements, not compromises, investor protection when paired with sound due diligence.
AIO has recommended to the OSC that the annual investment cap be increased to $65,000, enabling these qualified individuals to build more diversified portfolios. This would better reflect the real capital requirements of today’s startups, and reduce risk concentration for the investor.
Looking South: What the U.S. Is Proposing
The U.S. House of Representatives recently passed the Equal Opportunity for All Investors Act of 2025, a bipartisan bill that would direct the Securities and Exchange Commission (SEC) to create an investor knowledge exam. Those who pass could be deemed accredited—regardless of income or net worth.
The proposed exam would assess understanding of investment risks, liquidity limitations, valuation challenges, and the nature of private securities. This approach shifts the focus from how much you earn to how much you know—a concept we at AIO find both refreshing and logical. The parallels with Ontario’s SCI model are striking. The U.S. bill envisions a kind of “Canadian Securities Course Lite”, similar to what exempt market dealer representatives must already pass. This could open the door for millions of financially savvy but non-wealthy Americans to invest in startups and venture opportunities.
Caution Without Cynicism
Some financial professionals remain skeptical. They raise valid concerns: Could individuals be lured into risky investments before mastering the basics? Will some see private investing as a shortcut to fast gains? At AIO, we believe these concerns can be addressed—not by shutting doors, but by ensuring strong Know Your Client (KYC) obligations and investor education are upheld. Just as registered representatives must assess whether a product fits an investor’s risk profile, so too must new pathways be built on sound advice, not speculation.
What This Means for Ontario
If Ontario builds on the SCI exemption and monitors U.S. progress, we can lead—not follow—in modernizing capital markets access. A more inclusive, knowledge-based approach to investor qualification can:
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Unlock capital for Ontario’s startups,
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Attract fresh expertise into organized angel groups,
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And build a culture of informed investing that fuels sustainable innovation.
AIO encourages the OSC and Canadian policymakers to keep exploring how we can safely expand the investor base. Our startups are ready. Our experts are ready. Let’s make sure our policies are too.
Stay Connected. Stay Informed.
Whether you’re an entrepreneur, a seasoned angel, or an aspiring investor curious about how to get involved—Angel Investors Ontario is your hub for insight, education, and action.
For more on the Self-Certified Investor exemption or to explore joining one of Ontario’s angel groups, visit www.angelinvestorsontario.ca
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