The Exempt Market is higher risk and so it can be expected that, at some point in time, you may experience a loss on a private investment.  Whether it is a large or small investment though, losses can be very hard to deal with.

This is particularly true in the Exempt Market for a couple of reasons:

First, when an issuer runs into trouble, the losses can be quite significant.

Second, more often than not, losses can take a significant amount of time to realize.

With a stock, even if you are in a negative situation, you can still sell the stock and realize the loss.  You will likely still feel the same dismay at having lost money but it has happened and you can move on.  With private securities, the process can take a long time to wind everything down and crystallize what (if anything) you will be receiving back.  This tends to make it feel even worse because you continue to feel the loss through the whole wind up process.

So, if things don’t go as planned and you lose money in a private investment, should you continue to invest in the Exempt Market in the future? 

There’s a lot to take into consideration, and I’m here to help.

I’m going to lay it all out for you here – the pros, the cons – and then also make some recommendations based on your own particular situation.  After that, I feel you will be fully armed with the information you need to make an informed choice about your private investments.


Things change over time and it’s likely that your situation now is different than when you originally invested.  Here are 3 key things to consider right from the start:


It’s certainly possible that there have been some changes here, particularly related to oil and the economy over the last few years.

This review is important both to determine if you have funds available that you’d like to invest and also to determine if your “eligible” or “accredited” investor status has changed.


In the past, there were not a lot of guidelines here – for Dealing Representatives or Investors. There were no investment caps and no formal recommendations about how much an eligible investor should place in private securities.  There was also not a lot of history yet to guide these decisions.

In today’s Exempt Market, the Exempt Market Dealers make these recommendations for investors and WhiteHaven Securities (my EMD) recommends that “eligible” investors not invest more than 30% of their net financial assets in private securities (and that amount can be much less).  And of that 30%, not more than 10% in one particular investment.

With these percentages in mind, we can figure out how much of your current portfolio is made up of private securities and then adjustments can be made as needed.


Some of the key things to look at here are your age, your time horizon for investing and your risk tolerance.

It’s important to reassess the first two if you are nearing (or in) retirement, and very important to reassess your risk tolerance. It may have changed now that you have experience in the market and have seen some of the challenges over the years.


Taking this all into consideration, and looking at your own personal situation, I would be happy to sit down with you and make recommendations any time at your convenience.

But even if you are just going to read this post, I think you will be able to determine yourself if your situation has changed significantly in any or all of the areas discussed above.  Here’s what I recommend:

If your allocation to private investments is higher than 30% or even just more than you are currently comfortable with, and/or you are in retirement and looking for shorter term investments with instant liquidity and much lower risk, it is time to start diversifying out of the Exempt Market.  (P.S. If you land in this category, you can stop here and reach out to me.  I’ll meet with you, we can look at your whole picture and find some solutions to re-balance.  You’re also welcome to read on though – particularly if you feel you might want to revisit private investing in the future).

If your current private investments make up less than 30% of your overall financial portfolio, and you still have some years ahead to save for retirement, you may want to consider investing more in the Exempt Market. 



Even though you can invest more in private investments, after experiencing a loss, you might question why you would want to.

This is where I come in to help because I’ve been in the private investment markets for a long time and I believe I can put it all in perspective and also tell you about a lot of positive things that have happened over the years for investors:


This is true of almost any type of investment and particularly in a high-risk market.  There will be gains and there will be losses as this is the nature of investing.


Private investing is still very new to the average “eligible” investor. Generally, the ability to invest privately became mainstream around 2005 – 2008 and then came back strongly in 2011/2012.  To read a very Brief History of the Exempt Market click here but suffice it to say that every failed issuer and investment leads to the market becoming stronger and more transparent for investors.


You’ve gained experience in a market that can be very lucrative and is still largely unknown. This experience will take you forward and help you evaluate new opportunities.


Nothing is ever guaranteed but with less investment capital to go around, investors have access to the best investment opportunities that are available in this higher risk space.


Spreading your capital out among several issuers helps to mitigate your risk. With multiple, strong, experienced issuers in this market now, that is easier to do.


Regular returns

Early redemption options

Various terms

Different industries instead of such a huge focus on real estate


This becomes extremely important as time goes on. A strong EMD will perform extensive diligence on the issuers and investments and have a track record to prove that.  An experienced Dealing Rep will have seen all sides of the Exempt Market and will always work in your best interests.


If private investing is still suitable for a portion of your portfolio – the Exempt Market is, in my opinion, one of the best places to find the higher returns you’re looking for.  Here’s why.


Any type of investment loss can be hard to take but hang in there, reassess, re-evaluate and find the best opportunities to take your portfolio forward to retirement.  Whether you are looking for public or private investment opportunities, I will always help you every step of the way.


Shannon Pineau
Exempt Market Dealing Rep
E: C: 403-872-4010 TF: 1-855-872-4010

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Wondering what’s available for private investment opportunities?  Here is a current list.

Looking for private Portfolio Management options?  I can help.

Would you like to contact me to learn more?  Please do!

A Brief History of the Exempt Market

This post could go on for days…so much has happened in private investing over the last 12+ years! The title says brief though so that’s what I’ll try to be.

Where It All Began

Private investing has always been around in some form or another as people have always needed funding for their business growth or product ideas. In the past it has been referred to as the private or “alternative” investment market and it has largely been made up of wealthy or “accredited” investors.  

These investors would invest larger amounts in things like:
– Private business or real estate deals through close friends or associates
– Private MIC’s
– LP’s
– Venture capital deals
– Private leasing funds etc.

These types of private offerings could be very lucrative but were not available to or easily accessed by the “average” investor. You had to be in the know and generally have a high minimum to invest.

The Early 2000’s – The Beginning For “Eligible” Investors

Then the early 2000’s hit and private investing – particularly in B.C. and Alberta – went retail!

We were experiencing a very robust economy at that time with low borrowing rates and easy, accessible credit. Alberta had also experienced a big jump in housing prices which in turn gave home owners access to secured lines of credit. People were looking to invest and, in response to this, real estate development companies started shooting up everywhere, looking to raise capital.

And, where in the past these companies would have sought out accredited investors or friends/family/business associates – now they relied on the use of the Offering Memorandum to be able to raise capital from “eligible” (or average) investors.

This opened up a whole new market to people who had likely never even heard of these types of investments before. Or if they had – never had access to them.

These new private investment opportunities were very appealing to the average investor because of the projected high rates of return, low minimum investment amounts (generally a $5,000 minimum) and the ability to invest with RRSP funds.

This was essentially the beginning of the private investment market for most Canadians and it was a very busy time. Issuers would put on big presentations, investors would fill the rooms and millions were invested in a multitude of private investing companies.

It was a perfect storm…

– Many inexperienced investors
– Borrowing to invest
– A high-risk market
– Many inexperienced issuers
– Many inexperienced advisors
– Flawed investment structures
– A brand new space that still had very little regulation or oversight. (and that’s not a criticism of the regulators – things went crazy in a very short period of time and it would have been impossible to contain it).

And in 2008/2009, The Storm Hit

You can see where this is going (or may have even experienced it) and in 2008/2009 the private investment market imploded. Many issuers went into bankruptcy and, because of the long-term nature of private investments, most investors lost all of their invested capital.

In 2009, when the investment companies stopped answering the phone, most calls then started going to the provincial regulators – for example the Alberta Securities Commission.
So…after fielding those thousands of calls and now armed with all of the experience of what had just taken place (and with private investing now at a relative standstill while all the dust settled) the provincial regulators took their much-needed opportunity and reformed the private investment market completely.

2009 – A Pivotal Year in the Private Investment Space

Okay, I know I said I would give you a brief history and you might be concerned because I’m only at 2009. Never fear though because when you talk about the history of private investing, it usually comes down to what happened before 2009 and what happened after 2009.

A few years before was the birth of the market for “eligible” investors and a completely chaotic time that resulted in huge losses and a ton of learning experience for everyone involved.

After has been the continuous evolving of a much more regulated market space.

I don’t want to give you the impression that it has been all smooth sailing in this after period either.  There have been further investment delays and losses over the years, particularly with the economic downturn related to oil.  There are also many cases where investors have found themselves over allocated in private investments, particularly if they invested several years ago as there were no investment caps in place prior to 2016.

Where We Are Now

There continue to be many changes over time and they are always in favor of protecting investors. Overall, the regulators want to ensure that investors:

– Understand the market
– Really understand the risk involved
– Are aware of the long-term nature of private investments
– Don’t invest too much
– Can withstand a loss
– Find a private investment that is suitable for them based on their goals and where they are at in life

What’s Next?

Many things!  But that will have to come in another post.

To Sum Up

When I entered the private investment market in 2006, it was crazy times and still quite new to me as well. Through the next 12+ years, I’ve witnessed (and experienced) some huge ups and downs as things changed dramatically over time and I feel very positive about where things are now in the Exempt Market. For something that is still so new to the majority of people, it has evolved dramatically into a much more investor-friendly space.

P.S. I know this is a very condensed version of all that has taken place in private investing since I entered the market. That’s intentional though, so as not to completely bore the newcomer. There is much more information to come and eventually the whole private investing picture will be before you.


Shannon Pineau
Exempt Market Dealing Rep
E: C: 403-872-4010 TF: 1-855-872-4010

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Wondering what’s available for private investment opportunities?  Here is a current list.

Looking for private Portfolio Management options?  I can help.

Would you like to contact me to learn more?  Please do!

A sign that says private

Why Haven’t I Heard of the Exempt Market Before?

Private investor adjusting his tie

The Exempt Market (also known as the private or alternative market) has been around for centuries as people have always raised private capital to fund their developments.

Prior to the 2000’s though, this market was generally only known to the very wealthy and not available to average investors.


Common Exemptions Used in the Past

At that time, companies that didn’t want to complete a full prospectus in order to raise capital used an exemption from prospectus. Some examples include:

– Raising money from only friends and family

– Having a $150,000 minimum investment amount or

– Raising capital from accredited (high net worth) investors.

A Common Exemption Used Now

In the 2000’s, this all changed with increased use of another common exemption – the Offering Memorandum.

This document is a more condensed version of a prospectus and allows average investors to enter the Exempt Market with:

– Lower minimum investment amounts

– The ability to be an eligible instead of an accredited investor

All Of This Led To The Change in Terminology

I mentioned in a previous post that using one of these “exemptions” from a prospectus to invest in the private market is how the market got its name – The Exempt Market.

In addition, the changes that took place in the market in 2009 gave rise to a new entity called the “Exempt Market Dealer” or EMD, which further cemented the name.

So, to be fair, the official name THE EXEMPT MARKET has really only been around for about 9 years.

Very Little Advertising

Another reason you don’t see or read a lot of information about the Exempt Market is because it’s not well advertised.

When the private markets really gained traction in the early 2000’s, it was a completely new market to average or “eligible” investors and there were all kinds of newspaper advertisements to bring investors out to large presentations.

At that time, the high-risk nature of private investing was not well understood by most, largely because of its newness and also because there hadn’t yet been any high-profile failures. Once the recession hit though in 2008/2009, there were many failures, and this was also the time that the provincial regulators stepped in in a big way to ensure that the proper regulations were put into place to protect investors.

This included the removal of any potentially misleading statements in advertising and also complete transparency about the high-risk nature of the market.


So, while an ad from 2007 might say:

“Come on out Thursday night and find out how to earn 12% return on your investment with a short 2 year term”


An ad nowadays would say something like:

“Come on out on Thursday night and hear about a private investment that could potentially make a good rate of return but could also cause you to lose some or all of your money”


The second is definitely better and more truthful but isn’t very appealing to a mass audience.

So, what happens now is Investors go looking online for information on how to make higher returns and eventually come upon the term “Exempt Market”. Then they might think to themselves, hmmmm…I’ve never heard that term before and then come upon my blog post. From there, they might reach out to me to find out more because there has to be something that is great about private investing otherwise no one would do it. Right?

Right! There are lots of benefits – and risks too of course. You can keep reading all of my posts to learn more about private investing in Canada.

To Sum Up

The Exempt Market itself is not new but the terminology has changed and it is not well advertised. To learn more, you have to go looking and I’m very glad you found me and read my post. Thank you!



Shannon Pineau
Exempt Market Dealing Rep
E: C: 403-872-4010 TF: 1-855-872-4010

Facebook Twitter LinkedIn Instagram


Wondering what’s available for private investment opportunities?  Here is a current list.

Looking for private Portfolio Management options?  I can help.

Would you like to contact me to learn more?  Please do!