Architecting a New World: Investment Crowdfunding and Digital Assets

Exponential Ventures | James Wallace | June 4, 2019

democratizing the people - Architecting a New World: Investment Crowdfunding and Digital AssetsIf a tree falls in the forest does anyone care?

In a recent 20 year long study at Princeton University, it was determined that the opinions of 90% of US voters have essentially zero impact on government.

For the bottom 90% of income earners, the study found that the likelihood of anything they want becoming policy, from 0% support to 100% support, is 30%. That means that if 100% of people want a certain policy there is a 30% chance of it becoming policy, and if absolutely no one wants a certain policy, there is yet again a 30% chance. Think about that for a minute. No matter what level of support,  the likelihood of it becoming public policy is always 30%.

Now, let’s investigate investment banking. In the US, more than  97% of people in America are entirely excluded from making investments in pre-IPO companies, as only accredited investors are allowed access. This statistic is similar in most developed nations and much worse in developing countries.

Additionally, of the 3% that could qualify to invest,  only 300,000 individuals and 500 firms actually invest. That means that only 0.09% of people invest in early-stage companies. And of these people, only a tiny fraction - maybe several hundred, or 0.0002% - make the investment decisions.

 

The banks only bank what’s most profitable

Only 54% of those in developing countries have bank accounts, leaving a staggering  two billion adults unbanked.  66% of Indonesia’s 250 million people are unbanked.

An equal percentage of sub-Saharan Africans have no bank account, according to the World Bank. Only  4% of people without bank accounts said they didn’t want one.  Banks unfortunately have simply not provided these underserved markets with access and services and traditionally have been very poor at dealing with underbanked economies.

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Wayne Caines, Bermuda’s Minister of National Security (who introduced himself to me as the “Minister of Blockchain”) is committed to seeing all of the world’s unbanked, find banking services. In his former role as CEO of Digicell, the Caribbean’s largest telecommunications provider, he saw people buy and sell cellular minutes as a store of value because they could not obtain bank accounts. In Kenya, Vodafone introduced M-Pesa, an easy way to send small amounts of money over the cellular network, adding thirty million unbanked people to a payment network.

The Premier of Bermuda stated unequivocally that he was prepared to introduce any new legislation required to support fintech and its positive impact on the world. And, when the four banks in Bermuda said they would not bank digital asset based startups, he tirelessly pursued international banks, resulting in  Signature Bank of New York promising to bank Bermuda’s fintech companies. He also introduced the ICO Act and the Digital Asset Business Act to helpblockchain-based digital asset companies find the services they need from regulators, government and professional service providers.

 

Democratizing resources and affecting change

In Canada, investment crowdfunding platforms such as  Front Fundr, enable “retail investors” (i.e. non-accredited investors) to purchase shares in early-stage companies they believe in. In the UK, one-quarter of all business funding comes from investment crowdfunding platforms like  Seedrs and  crowdcube. In the US, there are several platforms that utilize “Regulation Crowdfunding” in the JOBS Act to allow startups to raise capital from the crowd.

See:  Fearless: How Technology Helps Conquer our Fear of the Unknown

New and existing technologies and changing regulatory environments globally are creating a new paradigm that is opening up antiquated, siloed capital markets, making them substantially more inclusive and transparent.  Born out of the need for change and designed ‘by the people, for the people’ using blockchain technology and digital assets, the increasing ease and ability to tokenize value has already begun to architect the new digital system, allowing the average person to significantly influence our world.

 

James Wallace - Architecting a New World: Investment Crowdfunding and Digital AssetsAbout James Wallace, Co-founder, Exponential Ventures

James Wallace works and creates like he lives life: with purpose. James values people and places, not things, thoughts and ideas, not beliefs and opinions. His default mode: Innovate, bootstrap and stay agile. To learn more, visit  wallace.vc.  Exponential Ventures is a digital asset impact fund investing in visionary founders that alleviate suffering and expand human potential with their products/services. To learn more, visit wallace.vc and exv.ai.


NCFA Jan 2018 resize - Architecting a New World: Investment Crowdfunding and Digital Assets The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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