Category Archives: Research

Fintech As a Pathway to Financial Inclusion? The Case of China

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Microfinance Gateway | Douglas Randall & Jennifer Chien| Apr 2018

Two Chinese fintech models illustrate the opportunities and risks involved

Douglas Randall is a Financial Sector Specialist and Jennifer Chien is a Senior Financial Sector Specialist in the Finance, Competitiveness, and Innovation Global Practice, World Bank Group. 

The opportunities and risks of fintech are front of mind for financial sector policymakers these days, and many are looking to China for inspiration and guidance. The Chinese experience has undoubtedly demonstrated that fintech – i.e. new, technology-driven financial sector players - can transform how consumers make payments, save, borrow, invest, and insure themselves against risk. But this experience also comes with caveats and cautionary tales. These topics, along with many others, are discussed at length in a new report on China’s financial inclusion experience co-authored by the World Bank and the People’s Bank of China.

The report explores two fintech models in China that serve to illustrate both the opportunities and risks of fintech: (1) nonbank digital payment providers, and (2) peer-to-peer (P2P) lending platforms.

Nonbank Digital Payment Providers

Alibaba and Tencent were originally established as an e-commerce and social network company, respectively. But both are now major players in the retail financial services market. This transformation began with the integration of payments functionalities into their existing online networks. Alibaba’s first foray into financial products was Alipay, launched in 2004 to facilitate transactions and build trust between buyers and sellers on Taobao, Alibaba’s online marketplace. Similarly, the integration of a payments product into Tencent’s social media platforms WeChat and QQ has proven to be a massively successful model that allows users to blend social and financial interactions, including sending gifts or remittances.

Fast forward a decade, and hundreds of millions of customers now use payment services offered by nonbank digital providers like Alipay and Tenpay, as well as a broader range of financial products offered by Ant Financial, a group of companies of which Alipay is a member. Alibaba and Tencent were leaders in opening up digital payments to nonbank players. The result is a dramatic evolution towards a cashless society in many major urban areas in China. The Chinese experience has shown that online, network-based business models can facilitate the design and delivery of innovative financial products by leveraging technology, network effects, big data, and cross-subsidization opportunities.

See: China’s Alibaba bringing online payment platform AliPay to Canada

But while fintech has certainly improved the availability, convenience, and affordability of financial products for consumers within these large online ecosystems, there is less consensus on the degree to which nonbank digital payment providers have reached unbanked, "last mile" consumers in China. Consumers who do not use social media or e-commerce platforms - disproportionately the poor, rural, and elderly - may receive limited financial inclusion benefits from such models. The scarcity of robust data and analysis poses a further challenge in determining the degree to which fintech providers reach "last mile" consumers.

In fact, much of the progress achieved in reaching the “last mile” with basic transactional products has been accomplished by traditional financial service providers. For example, China has nearly one million third-party retail agents operating on behalf of a financial service provider, with many agents operating in villages not otherwise covered by bank branches. Less than 5% of these agents have been established by nonbank digital payment providers. The channeling of social transfers through bank cards and via agents has also been a significant contributor in reaching previously excluded adults.

P2P Platforms

In the credit space, fintech providers have similarly disrupted the status quo. New digital credit providers have emerged, including internet banks, online microcredit companies (MCCs), and P2P platforms. In particular, P2P platforms seized on the significant market opportunity to reach creditworthy retail customers neglected by traditional financial service providers focused on serving larger enterprises. P2P lending platforms began gaining steam in the Chinese market about ten years ago, and there are now over 2,000 such platforms serving over eight million borrowers in China.

See:  Central banks should consider using digital currencies: China think tank

Unfortunately, there have been numerous instances of consumer abuses in the P2P industry. Many lenders/investors were led to believe that their funds were channeled to a specific borrower or that their loan was guaranteed by the P2P platform – beliefs that often turned out to be false. There were also cases of outright fraud. In one high-profile case, the company Ezubao was shut down in 2015 after authorities discovered it had been operating a Ponzi scheme in which fraudulent investment products were sold to nearly one million investors.

Continue to the full article --> here

Download the 98 page PDF report --> here


The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  www.ncfacanada.org

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Canadian Crowdfunding Industry Highlights Urgent Need for Changes

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Locavesting | Staff Writer | March 16, 2018

Some Americans may envy Canada’s charming president and progressive politics, but when it comes to investment crowdfunding, the two countries are in the same boat.

In an appeal to government regulators this week, Canadian crowdfunding and financial tech advocates called out an “urgent need for regulatory changes and government support” for Canada’s entrepreneurial and capital raising ecosystem. That includes streamlining the country’s crowdfunding regulations and educating the public about the laws.

“Entrepreneurs are reluctant to start up in Canada due to the high costs (relative to a small financing), and significant ongoing regulatory burdens. Investors are inhibited by caps on investment and limited education about  the benefits and downside risks of crowdfunding and other exempt financings. This pushes many talented entrepreneurs and investors to overseas jurisdictions that better understand (and support) innovation and the economic potential of start-ups and small businesses,” writes the National Crowdfunding & FinTech Association (NCFA), a nonprofit Canadian trade group.

In Canada, online capital-raising rules vary by province, and efforts to “harmonize” the laws have fallen short.

The U.S. is in a slightly better position. The U.S. crowdfunding industry falls under a single federal framework, the 2012 JOBS Act.  However, 34 states have passed intrastate laws that can vary greatly.

But U.S. complaints are similar in other regards, including the need to improve burdensome regulations and educate the public about the new laws.

Of particular note, the NCFA decried the lack of support and incentives for education.

“Introducing new requirements/exemptions without a robust ongoing educational program is like asking new drivers to follow a road that contains no ‘signs’, without maps,” writes the NCFA.

In a 2017 survey by the NCFA, over 70% of respondents said more education was required to attract more investors to crowdfunding. A lack of awareness and education around crowdfunding laws is frequently cited as the number one challenge in the U.S. as well.

Data collection and analysis is also lacking, according to the NCFA.

Encouraging Investors

One area where Canada stands out may be in offering tax incentives for investors, although not specifically in conjunction with crowdfunding. The report doesn’t mention it, but some Canadian provinces, such as New Brunswick, have long offered tax incentives for local investors that have been held up as a model for the U.S.

Still, those efforts pale compared to the UK, where investment crowdfunding is more mature and investors may easily invest in local companies and startups via tax-advantaged retirement accounts. In the U.S., that requires setting up a separate (and cumbersome) self-directed IRA.

The NCFA warns that, without action, Canada risks falling further behind in global competitiveness and financial innovation. They cite an Ernst & Young “Fintech Adoption Index” that put Canada near the bottom of global fintech adoption rates, at just 18 percent. The U.S. clocked in at 33%, the average adoption rate, trailing countries such as Australia (37%), the UK (42%), India (52%) and China (69%).

The NCFA concludes with recommendations, including streamlining the regulations and potentially adopting British Columbia’s more preferable framework. It also advocated for regulatory “sandboxes” that allow for controlled financial experimentation—an idea that has been implemented in the U.K. and proposed in the U.S.

Continue to the full article --> here

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NCFA Canada’s submission to Finance Canada (March 2018): Urgent Need for Regulatory Change and Government Support

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NCFA Canada | March 15, 2018

On Tuesday, March 13, 2018, the National Crowdfunding & Fintech Association participated on a call with Finance Canada in Ottawa to discuss it's latest submission calling for an urgent need for regulatory changes and government support to ensure the Canadian fintech sector is not being held back and remains competitive with international comparators such as in the UK and US.  Below are the highlights of the submission that can be viewed/downloaded in full at the bottom of this post.

We'd like to thank Robin Ford, NCFA Advisor, Regulations and Governance for leading a group effort by the following participating NCFA members (in alphabetical order):


Alan Wunsche, Blockchain Canada
Alixe Cormick, Venture Law Corp
Amar Nijjar, R2 Capital / Investments
Beverly Brooks, Brooks Communications
Brad Kerr, FundingNomad
Cato Pastoll, LendingLoop
Craig Asano, Founder/Director, NCFA
Daryl Hatton, FundRazr / Director, NCFA
Douglas Cumming, Finance Professor, York University
Hitesh Rathod, NexusCrowd
Jason Saltzman, Gowling Canada LLP
Marcel Schroder, Managing Director, Vaultcircle (Lendified)
Marcus New, InvestX
Marty Gunderson, Director, NCFA
Peter-Paul Van Hoeken, FrontFundr
Richard Remillard, RCG Group / Director, NCFA
Robin Ford, former Head of Dept UK FSA, former Executive Commissioner BCSC, Consultant
Rubsun Ho/Sandy Hershaw, Crowdmatrix

 

1. OVERVIEW: Crowdfunding & Fintech are being held back in Canada

Canada’s crowdfunding and fintech “ecosystem” should be competitive, be in line with global trends, and enable early stage entrepreneurs to access smaller amounts of capital (ie, < $5 million) at a reasonable cost. Unfortunately it is not. There is a‘funding gap’ in the market as many smaller companies find it very challenging to raise debt or equity financing in Canada. This means fewer innovative start-ups, fewer opportunities for investors, and constraints on economic growth (and jobs).

The National Crowdfunding & Fintech Association of Canada (NCFA) has conducted numerous stakeholder consultations which overwhelmingly tell us that the regulatory requirements are overly prescriptive, complex, and burdensome (costly). The capital markets regulators in Canada have attempted to address the market problems within their jurisdictions, but so far without much success.

Canada is falling behind international comparators such as the United Kingdom and the United States. Entrepreneurs are reluctant to start up in Canada due to the high costs (relative to a small financing), and significant ongoing regulatory burdens. Investors are inhibited by eg caps on investment and limited education about  the  benefits  and  downside  risks  of  crowdfunding  and  other  exempt financings. This pushes many talented entrepreneurs and investors to overseas jurisdictions that better understand (and support) innovation and the economic potential of start-ups and small businesses.

The NCFA is very concerned about this and has strongly encouraged the BCSC and OSC to work smarter (and harder) to streamline regulation across the country, and to reduce undue burdens (that are not justified by the risks).

The NCFA now asks the federal government to work with the provinces and regulators to provide the required strategic direction and leadership needed to enhance Canada’s competitiveness.

 

2. BENEFITS OF CROWDFUNDING & FINTECH

The benefits of crowdfunding are broadly accepted and frequently described, eg - https://www.forbes.com/sites/tanyaprive/2012/10/12/top-10-benefits-of- crowdfunding-2/#3fd5ab4c2c5e.

The same is true of fintech, eg -    https://blogs.imf.org/2017/06/20/fintech- capturing-the-benefits-avoiding-the-risks/.

If the NCFA recommendations in this submission were to be implemented, the experience of other jurisdictions makes clear that more capital would be raised, especially for under-serviced sectors (eg, women and minority groups, including First Nations and rural areas). Investors would also have increased confidence and more freedom to invest as they choose.

We have a lot of tech and innovation talent in Canada. As the Competition Bureau has pointed out (Dec 2017 - http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04322.html), a more flexible approach to regulation and adequate government support would provide significant economic benefits by freeing entrepreneurship. It would also help to keep our entrepreneurs in Canada (along with the related jobs), boost GDP (especially by improving productivity), and encourage the commercialization of new products and services generally.

 

3. CHALLENGES IN THE CURRENT ENVIRONMENT

As the leading and only dedicated crowdfunding and fintech association in Canada, the NCFA has consulted numerous registrants, industry experts, and practitioners in the sector about the most pressing challenges.  They say:

  1. Investment-based crowdfunding requirements are far from internationally competitive with respect to raising non-bank funding.
  2. Regulatory requirements are overly prescriptive with a one size fits all approach (versus risk-based) that is not working.
  3. Regulatory regimes in Canada are not harmonized and are overly complex which adds significantly to the costs of start-up and ongoing compliance.
  4. Lack of co-ordinated governmental incentives and support for innovation and for education and awareness puts Canada at a disadvantage that our competitors are happy to exploit.

 

A. Overly prescriptive requirements

Many entrepreneurs been discouraged by high legal fees, onerous reporting requirements, and other burdens. While entry into the market may be possible, entrepreneurs are also inhibited by ongoing costs of compliance and high hurdles for future financings that will limit their ability to scale up.

For example, only a small number of issuers have used online platforms to raise capital under the Accredited Investor or Offering Memorandum Exemptions in Ontario. While the Offering Memorandum Exemption is gaining some traction and is used by several NCFA member portals, it is primarily aimed at companies wishing to raise at least $250,000 (due to the costs, for example, of preparing the necessary legal and financial documentation).  Most early stage companies seeking to  raise  smaller  amounts  of  capital  cannot  realistically  use  the  OM  (or  the Integrated Crowdfunding Exemption MI 45-108 due to similarly high costs).

These exemptions are also inadequate for most marketplace lending platforms. For example, they do not allow the multi-party participation of public, private and government blended funding models which have developed in the UK and elsewhere, or membership marketplace lending models. (See Appendix 10:  P2P Lending.)

BC and some other jurisdictions have a ‘lighter’ set of crowdfunding requirements (eg, the ‘Start-up Crowdfunding Registration and Prospectus Exemptions MN 45-316 that allow small firms to raise up to $250,000 per offering (twice a year), with participation from other provinces). If there is not be a move towards a risk based approach, then the NCFA supports BC’s regime and proposes that other jurisdictions at least allow BC offers to be distributed across Canada under a mutual   recognition   system.   (NCFA   was   pleased   to   see   BCSC’s   recent announcement   of   changes   to   the   Startup   Exemptions   (BCI   45-535)   - http://bcsc.bc.ca/News/News_Releases/2017/72_Changes_to_start- up_crowdfunding_exemption_will_increase_access_to_capital_for_B_C    issuers)

For more recommendations to streamline regulation see Appendix 11.

The NCFA encourages regulators not only to adopt a more risk-based approach, but also to improve the measurement of the cost of a proposed regulatory solution against its benefits. Detailed or prescriptive controls should only be imposed when clearly justified. Market problems should not be “resolved” by additional requirements unless demonstrated benefits exceed costs. (See Appendices 5 and 6

Prohibitions on Advertising and Solicitation’ and ‘Frequency of Reporting Requirements’ for a high-level analysis of two requirements where we conclude that the costs far outweighs any benefit, and Appendix 7 ‘Regulatory approach’.)

 

B. Regulation is not harmonized and is overly complex

There  are  currently  three  versions  of  crowdfunding  specific  requirements  in Canada that form a patchwork that varies with respect to offering documentation, ongoing   disclosure   requirements,   capital   raising   and   investor   limits,   and advertising. These differences make it more costly for early stage companies, most of whom want to raise funds and do business in more than one jurisdiction (with additional costs for issuers of approximately $5,000 - $20,000 in legal fees alone).

The differences among the regulatory systems are outlined in Appendix 1. The table illustrates how complex and varied the requirements are, causing confusion and frustration for all market participants. Appendix 2 shows that differences exist even among jurisdictions participating in the same instrument, in this case MI 45-108.

 

C. Lack of incentives and support for education and innovation

Introducing new requirements/exemptions without a robust ongoing educational program is like asking new drivers to follow a road that contains no ‘signs’, without maps.  To increase the use of the new financing tools, in addition to the regulatory changes the NCFA proposes in this submission, many more businesses and individuals need to be educated about the opportunities and threats for both entrepreneurs and investors.

We have selected some insights from the NCFA’s annual 2017 Alternative Finance Crowdfunding survey of 170 responders (Jun-Jul 2017) including investment platforms, companies seeking capital, and a wide range of investors (including VC/PE and institutional investors):   (See: Appendix 3  NCFA Selected Survey Results Charts)

  • When asked ‘What do you think is needed to attract more investors to the Canadian  alternative  finance  crowdfunding  markets?”    The  number  one (70% of the responders) answer was “More education”.
  • When  issuers  were  asked  “Has  your  company  ever  raised  capital  via alternative finance crowdfunding markets before?” the overwhelming majority (approximately 90%) responded ‘No’.
  • When asked why not, issuers’ number one reason (over 55%) was that they were ‘Unaware of how it works’.

While regulators have provided dedicated web pages to help potential investors and issuers better understand the capital markets, the information is limited. According  to  a  recently  published  Ernst  &  Young  “Fintech  Adoption  Index” survey, Canada has one of the lowest fintech adoption rates in the world and a central reason for this is lack of awareness. Over 70% of the respondents thought that more education was required to attract more investors to crowdfunding and that the regulators should publish more market analyses.

Data collection and analysis is poor in Canada. In contrast, the Securities and Exchange Commission (SEC) recently published an extensive whitepaper on Title III Regulation crowdfunding activity titled ‘U.S. Securities-based Crowdfunding under Title III of the JOBS Act’ that reviews offering activity, characteristics, geographic distribution and regulated platforms performance, characteristics and compensation rates.

It is crucial that data collection and analysis be improved in Canada (in collaboration with the private sector) so that we can better understand the markets and pinpoint problem areas (to enable evidence-based decisions).

Finally, we were pleased to see the announcement of the new federal program Innovative Solutions Canada as well as the support in Budget 2018, building on Budget 2017. These are steps in the right direction (and we are aware of some older federal programs). But Canada still needs a comprehensive innovation strategy and an integrated program of incentives and support. Governments, regulators, and the private sector need to work together more strategically. Other jurisdictions like the UK, Singapore, and Hong Kong are well ahead of us.

 

4. A CHANGE OF APPROACH

A. Work harder to harmonize and reduce unjustified regulatory burden

Prescriptive and complex regulation is simply inappropriate in a highly innovative and fast paced  digital  space.  Moreover,  businesses  cannot  be  as  nimble  and responsive to market demand.

We acknowledge that a change to a more risk based and principles based approach is not easy. Indeed it would require a profound change in regulatory culture and a significant and long term commitment from Ministers and regulatory boards and senior management. But short of that, there is much that can be done. The NCFA has made specific recommendations for regulatory change. (See Appendix 11.) (Regtech must also be part of a change of approach, but we do not discuss that here.)

B. Governments to support regulatory change

The  NCFA  strongly  supports  CSA  initiatives  such  as  “sandboxes” and  cross- border agreements (such as the recently announced agreement between some Canadian  regulators  and  the  French  AMF  FinTech,  Innovation  and Competitiveness Division). But it is not enough. (In the UK, the FCA is now pushing for sandbox improvements globally.)

There is a crucial role here for governments, especially the federal government, to champion innovation, to agree a fintech or innovation strategy with the provinces, to use already proven tax and other incentives, and to work with the private sector to ensure adequate data collection and analysis. The profound change in regulatory approach in the UK starting in 1997 could not have happened without the strategic planning and leadership of Number 10.

More government resources and support for innovation and education

While educational conferences are in high demand and markets are slowly gaining traction in Canada, the sector needs more government support to encourage and enable more portals  and  participants  to  start-up,  ‘scale  up’,  and  operate  more efficiently.    There  is  a  large  knowledge  gap  due  to  the  real  (or  perceived) complexities and burdens involved in putting together an online financing round. Businesses and investors need to be better educated about the options and the available  support  facilities  and  incentives.  Education  is  an  investment  by governments,  working  with  the  private  sector,  that  will  generate  more  capital investment and jobs, as well as making potential investors more risk aware.  (See Appendix   4:       Private-public   growth   model   for   the   alternative   finance crowdfunding industry.)

 

5. CONCLUSION AND TAKE-AWAYS

Governments play an essential role in facilitating and encouraging innovation and entrepreneurship. While one might now add to it, a wide ranging 2010 paper by PWC provides a good overview of how this can be done - https://www.pwc.com/gx/en/technology/pdf/how-governments-foster-innovation-2010.pdf.   The   report   concludes:   “Countries  that   understand   their   particular economic profile, and design the right strategy to suit that profile, stand to raise the odds of success in fostering innovation.”

 

The NCFA urges the federal and provincial governments, as well as the provincial and territorial securities regulators, to work together:

  • to reduce regulatory burden, to champion innovation,
  • to make good use of proven tax and other incentives, and
  • to work with the private sector to ensure adequate data collection and analysis, as well as education and awareness.

If not, we will fall further behind.

The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  For more information, please visit:  www.ncfacanada.org

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Innovate Finance Data: 2017 VC Investment Landscape

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Innovate Finance | Feb 13, 2018

Innovate Finance’s 2017 VC FinTech investment landscape provides investors, startups and the wider FinTech ecosystem the data to understand trends and capital flows as the FinTech market evolves. Overall figures suggest that the UK has had its best year on record and was a global leader in terms of capital invested and deal volume, second only to the US.

Key Findings

  • The UK experienced its best year on record with $1.8bn of VC investment, up 153% on 2016
  • The UK ranked second globally in both total Capital Invested and Deal Volume, behind the United States
  • TransferWise, OakNorth, Funding Circle, Interactive Investor and Monzo led the top 5 top UK deals in the range of $90M to $280M of investment
  • There were 10 Innovate Finance members in the top 20 UK deals.
  • Global FinTech attracted $14.2BN of VC investment 2017 saw 1,842 deals a 18% decrease YoY.

 

Links you may be interested in:

More venture capital invested in Montreal than any other Canadian city in Q2

Animation: Four Years of Initial Coin Offerings

Download the full report --> here


The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a national non-profit actively engaged with social and investment crowdfunding, alternative finance, fintech, peer-to-peer (P2P), initial coin offerings (ICO), and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, networking opportunities and services to thousands of community members and works closely with industry, government, academia and eco-system partners and affiliates to create a vibrant and innovative fintech and online financing industry in Canada.  For more information, please visit: www.ncfacanada.org

 

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Regulation Crowdfunding Surpasses $100,000,000 in Capital Commitments – Signaling an Industry that is Here to Stay and Reaching $1 Billion in the next 5 years

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Crowdfund Capital Advisors | Sherwood Neiss | Jan 25, 2018

According to Crowdfund Capital Advisors, today is a historic day for online finance and Regulation Crowdfunding in particular. The industry passed a major milestone surpassing over $100 million in capital commitments.

“We’ve been anxiously waiting for this milestone,” said Sherwood Neiss, Principal at Crowdfund Capital Advisors. “It proves that the model is working, capital is flowing to those companies that need it most and jobs are being created. There’s no doubt, based on the rational growth of the industry since May 2016 that Regulation Crowdfunding and online finance are here to stay and will play a significant role in funding startups and small businesses in the future.”

“Regulation Crowdfunding brings a digital footprint to all offerings for the first time in 80 years. The  transparency this provides regulators and investors sheds sunlight on what was prior an opaque process.  The data and dollars show that the industry is working,” said Jason Best, Principal at Crowdfund Capital Advisors.

“We expect the industry to really begin to scale at this point of inflection. Our model estimates that over $1 billion will be funded to startups and small businesses within the next 5 years and over 25,000 jobs will be created.”

See:  The 2017 State of Regulation Crowdfunding: US Securities-based Crowdfunding under Title III of the JOBS Act

Karen Kerrigan, CEO of the Small Business and Entrepreneurship Council said, “It is great to see the funding bottleneck being addressed for small businesses, capital flowing around the country, and jobs being created in cities and regions that need it most. However, this is the tip of the iceberg. There is more that we can do. Bringing more attention to Regulation Crowdfunding as well as addressing some of the sticking points in the law will help further expand capital access and opportunity for entrepreneurs in every corner of the country.”

Key insights from CCLEAR as of today are:

  • $100,072,759 in capital commitments (95% went to successful campaigns)
  • 731 campaigns launched
  • 100,901 investor commitments
  • Average is $992 per investment (up from $750 when the industry started May 16, 2016)
  • Average raise is $360,691 (up from $250,000 when the industry started)
  • Total jobs supported is 3,608 to date
  • It took 410 days for the industry to raise the first $50M and 209 days (50% less time) for the industry to raise the next $50M
  • Companies in 45 states filed to raise capital

Crowdfund Capital Advisors collects data from companies raising funds online via parts of the JOBS Act and in particular Regulation Crowdfunding. The database, known as CCLEAR publishes a daily dashboard of industry activity and is used by the media, educators, industry stakeholders, government organizations, and multilateral organizations. The data visualization tool provides a clear understanding as to where capital is flowing by region, industry and even gender. It’s major benefit allows for transparency into a segment of the private capital markets that has been operating in the shadows.

For more info visit:  Crowdfund Capital Advisors

 


The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a national non-profit actively engaged with social and investment crowdfunding, alternative finance, fintech, peer-to-peer (P2P), initial coin offerings (ICO), and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, networking opportunities and services to thousands of community members and works closely with industry, government, academia and eco-system partners and affiliates to create a vibrant and innovative fintech and online financing industry in Canada.  For more information, please visit: www.ncfacanada.org

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Ontarians and Cryptocurrencies: A First Look

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OSC Get Smarter About Money | Dec 11, 2017

December 11, 2017 – Over the past several months, interest in cryptocurrencies has increased significantly. The Investor Office commissioned a small online survey of Ontarians age 18 and over, carried out in November 2017, as a first step towards learning more about which segments of the Ontario public are purchasing cryptocurrencies, how Ontarians perceive the risks of cryptocurrencies, and some of the reasons why Ontarians either are or are not purchasing cryptocurrencies.

New financial products can help foster the dynamism of our capital markets, but investors should always do their due diligence before purchasing a cryptocurrency or cryptocurrency-related product—fraudsters have tried to capitalize on market interest in cryptocurrencies by creating fake initial coin and token offerings, promising high returns and then walking away with any funds raised.

Continue to the full article --> here


The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a national non-profit actively engaged with social and investment crowdfunding, alternative finance, fintech, peer-to-peer (P2P), initial coin offerings (ICO), and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, networking opportunities and services to thousands of community members and works closely with industry, government, academia and eco-system partners and affiliates to create a vibrant and innovative fintech and online financing industry in Canada.  For more information, please visit: www.ncfacanada.org

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The 2017 State of Regulation Crowdfunding: US Securities-based Crowdfunding under Title III of the JOBS Act

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CrowdfundInsider | By  | Jan 15, 208

Recently, my company crafted a report for the US Securities and Exchange Commission that summarizes progress on Title III of the JOBS Act of 2012, also referred to Regulation Crowdfunding or Reg CF. This newest securities exemption was added to the options that smaller companies could utilize to raise both debt and equity capital within the US.

Regulation Crowdfunding allows startups and SMEs to raise up to $1,070,000 per year from both retail and accredited investors by utilizing registered funding portals (or broker-dealers) to conduct exempt offerings online. At the end of 2017, there were 36 FINRA approved crowdfunding portals.

This exemption requires issuers to file in a Form C and post online disclosures about a company’s operations, team, financials and other material information for investors to review. Regulation Crowdfunding started in the United States on May 16, 2016. The second calendar year for the industry ended on December 31, 2017. Because data about issuers, their financial well-being, and the capital that is committed is public information we can analyze the data and bring transparency to a segment of the markets (exempt private offerings) that has been fairly opaque until the JOBS Act went into effect.

See Also: SEC Updates JOBS Act Amendments Including Reg CF Funding Cap

Key findings of our report:

  • The number of unique offerings increased 267% from 178 in 2016 to 481 in 2017
  • Proceeds increased 178% from $27.6 million in 2016 to $49.2 million in 2017. Total proceeds by the end of 2017 was $76.8 million
  • The number of successful offerings increased 202% from 99 in 2016 to 200 in 2017
  • The average success rate of offerings to date is 66.7%
  • The total number of investors in Regulation Crowdfunding increased 158% from 28,180 in 2016 to 44,433 in 2017
  • Issuers that filed annual reports and reported creating jobs created on average 13.9 jobs.
  • Revenues for Issuers that filed annual reports increased on average 131% between the year in which they leveraged Regulation Crowdfunding and the Prior Fiscal Year.

Continue to the full article --> here

 


The National Crowdfunding Association of Canada (NCFA Canada) is a national non-profit actively engaged with social and investment crowdfunding, alternative finance, fintech, peer-to-peer (P2P), initial coin offerings (ICO), and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, networking opportunities and services to thousands of community members and works closely with industry, government, academia and eco-system partners and affiliates to create a vibrant and innovative fintech and online financing industry in Canada.  For more information, please visit: www.ncfacanada.org

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