What is a CEDIF?
A Cautionary Note
Although the establishment and operation of a CEDIF may seem relatively straightforward, there are several potential problem areas and risks that should be noted.First, since you will raise capital from the community through a public offering proper securities procedures must be followed.
Second, deciding on viable investment targets require special skill that is not widely available. Venture capital companies pay very well for this expertise and it is not realistic to expect it to be available in each community; indeed, there may be only a handful of such people in the entire province.
Finally, the risk to the investor should be regarded as quite high. There is likely to be little in the way of diversification built into the investment on the grounds that it is either all in one business or in a few businesses all located in the same area. Relative to other investment choices available in the market, therefore, the investor may have limited interest in a CEDIF.
