Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Research
2024 Global Fintech Funding Insights for Investors & Founders
Fintech Report | Jan 16, 2025
Image: State of Fintech 2024 (CB Insights)
'State of Fintech 2024' Funding, Deals and Innovations for Growth in 2025
CB Insights published it's annual 'State of Fintech 2024 - Global Recap' report (whopping 200 page PDF) with the top line being global financial technology funding dropped 20% year-over-year to USD $33.7 billion. Certain sectors continue to shine with innovations in payments, blockchain and embedded finance showing robustness for 2025. This article presents key trends and takeaways for fintechs and investors to digest.
Key Global Funding Trends in 2024
Global fintech funding in 2024 dropped 20% year-over-year to USD $33.7 billion (deal volume also shrank 17%). It was a sobering year with macroeconomic headwinds in the air from volatile interest rates, cautious investment landscape, and geopolitical instability.
The payments sector led and captured 40% of total funding as embedded finance and B2B solutions enjoyed growth, as companies of all stripes looked to integrate financial services.
See: Fintech Trends & Predictions Across Generations in 2025
Enterprise adoption and tokenization drove blockchain funding to $6.5 billion globally, as more use cases emerge beyond speculative trading of cryptocurrencies.
Unicorns were rare sightings with only two (2) new fintech unicorns rearing their head in Q4, 2024, for a total cumulative count of 326 unicorns to date. Many established unicorns continued to thrive.
M&A activity increased 6% year-over-year with 664 exits including Stripe's $1.1 billion acquisition of Bridge.
Regionally, the U.S continued to dominate its position as the largest fintech market raising $3.9 billion in Q4.
Latin America was the fastest growing market fuelled by financial inclusion initiatives, raising $1.1 billion in Q4 alone.
Despite the global funding drop, one silver lining was the focus on quality over quantity (and then backing up the truck), driving a 33% increase in the median deal size to $4 million, primarily allocated to late stage firms with clear growth trajectories. While seasoned investors dominated activity, newer investors pulled back.
Investor Perspective
Although 2024 was largely a challenging environment, key late stage opportunities particularly in payments and blockchain firms such as Stripe’s $1.1B acquisition of Bridge and Zepz’s $267M Series F. Notably, embedded finance attracted over $14 billion globally, as non-financial platform businesses looked to integrate financial services as a new source of revenue.
See: Wealth Management Insights for Fintechs and Investors
- Total global fintech funding fell to $33.7 billion (20% decline yoy)
- Embedded finance boosted payments funding to $14 billion globally
- Total blockchain funding $6.5 billion
- Median deal size increased 33% (yoy) to $4 million
- Focus on later stage companies with strong business models and proven scalability in high growth sectors like blockchain infrastructure and cross-border payments
Founder Perspective
Fintech funding was more scarce in 2024. Global deal volumes shrank 17% but median deal sizes increased 33% to $4 million year-over-year. Not surprisingly, founders who aligned their models with hot trends like AI personalization tools and embedded finance had more success in securing funding.
See: M&A Opportunity as Fintech Valuations Drop
- AI is becoming an essential tool in fintech. Use cases are growing in lending and wealth management
- Blockchain funding expected to exceed $8 billion globally in 2025
- Embedded finance revenue is projected to exceed $140 billion in 2025 (growth potential)
- Cross border payments is forecasting 20% growth in 2025 due to global commerce
- Notable deals in 2024 - Public securing $105 million, and Zest AI raising $200 million Series H
- Founders should align their offerings with global trends and build partnerships with established players while focusing on scalability and gaining investor trust
2024 Fintech Funding in Canada
In 2024, a total of $300 million was raised across 14 deals in key sectors such as blockchain, digital banking and payments. Canada accounted for a modest 0.9% share of global fintech funding but its focus on niche sectors like blockchain and payments make it stand out. A few notable deals include:
- Neo Financial raised USD $80 million in a Series D round
- Blockstream secured USD $152 million through a convertible note
- PiP World attracted USD $10 million in seed funding
- Canadian fintechs are uniquely positioned to capitalize on AI automation in wealthtech and insurtech sectors. Collaboration with U.S. and European markets could expand Canada's influence in 2025
Closing Outlook
While fintech in 2024 was a reflective year, fintech in 2025 offers some big opportunities in blockchain, AI, and cross-border payments. Embedded finance will continue to expand to new industries, creating new ways for customers to engage. Create scalable ideas, form smart partnerships and stay ahead of key trends in this fast changing market. Learn more, download the full 200 page report from CB Insights.
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, artificial intelligence, 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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Founder Salaries: Insights from Europe, U.S., and Canada
Salary Report | Jan 13, 2025
Image: European Median Salaries By Stage 2023 vs 2024 (Creandum Compensation report 3.0)
What Startup Founders Really Earn: Lessons from Creandum and Insights for Canada
Have you ever had the task of determining how much to pay yourself? Well it's a key question that Startup founders face around the globe who must balance the company's growth (and runway) with a founder's personal compensation needs and sustainability. Creamdum recently published their third annual Founder Compensation 2024 report based on responses from nearly 700 founders at various development stages from bootstrap to Series B.
See: The Rise and Implications of a New AI Software Workforce
The report finds that 2024 startups have given themselves a pay increase due to being in a more stable position, post covid pandemic. Some sectors like climate tech and healthtech are thriving but regional differences, gender pay and equity dilution are still key topics. This article breaks down some of the data to serve as practical benchmarks for founders and boards to make informed decisions around compensation.
Creandum’s 2024 Survey of Salaries in Europe
1. Founder Salaries Increased Across Nearly Every Stage
- Bootstraped founder median salaries doubled from €15,000 to €30,000 (that's a significant hike!)
- Pre-seed is up 37% from €35,000 to €48,000.
- Seed increased a bit and is now at €85,000.
- Series A didn't change given slower growth in funding rounds. €120,000
- Series B grew 13% with median salary reaching €159,000 and total compensation with bonuses almost €200,000.
For many early stage company founders their salaries are closely tied to funding milestones.
2. Bonuses Are Back
Performance bonuses help founders stretch their rewards without overextending base salaries.
See: Canada’s $300M AI Funding Targets SMEs for Growth
- Bootstrapped founder bonuses represent 26% of total pay, boosting total compensation by 138%.
- Meanwhile only 5% of pre-seed founders receive bonuses at this stage.
- 24% of Series B founders get bonuses based on their performance targets and milestones.
3. Regional Pay Differences
Founder pay across Europe varies significantly.
- France jumped a whopping 60% from 2023 to €124,000 and are now near the top paid in the region.
- UK founders pay €107,000 which is a decline from last year given shifting regional competitiveness.
- Nordics €100,000 (steadily increasing due to strong tech funding).
- DACH (Germany, Austria, Switzerland) get paid €95,000.
- Southern Europe is €70,000, quite a bit lower due to limited funding pools and lower cost of living.
- Baltic countries (Latvia, Lithuania, Estonia) highest paid founders in Europe due to Estonia's tech boom and entrepreneurial talent including influx from Russia.
4. Change in Sector Trends
For the past two years, Fintech founders were the highest earners however now in 2024, Climate Tech and Health Tech founders have taken the lead at later stages with large funding increases.
See: Green Fintech 2.0 Shows Progress in the UK
Climate Tech raised €7.7 billion in equity funding as of H1 2024 while Health Tech raised $2 billion in Q3 2024 alone. Both of these sectors require major upfront investments which translate to higher founder pay as these companies mature.
5. Gender Pay Gap is Shrinking but Challenges Remain
- Bootstrap female founders earn just 3% less than male founders.
- At Pre-seed the largest gender pay gap exists with women earning 23% less than men.
- Seed and Series A female founders actually earn MORE than male founders (report does not express exact percentages)
- Series B female founders get paid 13% less than their counterparts.
- One of the major challenges is just representation given that male founders outnumber female founders 6:1
Comparing Europe, the U.S., and Canada
- The U.S. consistently leads globally in founder pay across all stages due to its larger funding ecosystem and higher valuations.
- Europe compensation follows the U.S. but varies widely by region.
- Canada trails Europe and the U.S. with founder pay aligned to smaller funding pools. Founders should push for more funding options and stronger policies to attract investment.
See: What Toronto Can Learn from Tel Aviv’s Start-Up Scene
| Stage | U.S. (USD) | Canada (USD) | Europe (USD) |
|---|---|---|---|
| Bootstrap | N/A | $29,600 | $31,579 |
| Pre-Seed | $50,000 | $44,400 | $52,632 |
| Seed | $133,000 | $59,200 | $89,474 |
| Series A | $183,000 | $81,400 | $126,316 |
| Series B | $218,000 | $111,000 | $167,368 |
Notes:
Figures below are all expressed in USD for an apples to apples comparison.
US salaries from Kruze Consulting CEO salary report
Canadian salaries from Talent.com and Glassdoor
European salaries from Creandum's 2024 salary report
Equity Trends You Need to Know
Image from Creandum Compensation 3.0 report
1. One of the biggest drivers of dilution is the number of co-founders in a company, regardless of stage.
- For example, solo founders hold onto about 80% equity during the early years of a startup but that drops to 30% equity by Series B.
- Then compare that with a venture with five co-founders, by the time Series B rolls around individual co-founders retain often less than 7% equity.
- Having said that, multiple co-founders can also bring diverse skill.
2. Founders of bootstrapped companies keep a larger share with a median of 44% equity.
- This is common sense since this type of company trades off slower growth for more control.
3. Equity dilutes with each funding round.
- For example, founders typically still retain about 20-25% equity at Series A but that drops to 10-15% by Series B. The trade off here is ownership versus the need to secure growth capital
Closing Thought
Founders have been through a lot with covid, geopolitical risks, and economic stability. The 2024 Creandum compensation 3.0 report clearly shows key compensation trends including rising startup founder salaries, return of bonus incentives, and regional/sector trends.
See:
UK Banking Competition Remedies, Lessons for Fintech Growth
BoE Report: Open Banking Boosts Productivity, Competition
Higher startup CEO salaries are driven by ecosystem strength. Canadian founders should learn from the U.S. and other regions by addressing funding gaps and advocating for stronger policies that strengthen the local ecosytem, attract investment, attract/retain top talent, and make Canadian companies more competitive on the global stage. Want to learn more? Checkout Creandum’s Compensation Calculator as a valuable resource to help align pay with funding stage and industry trends.
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, artificial intelligence, 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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Book: The Law for Founders – Protecting Your Startup
NCFA Advisor Book | Jan 9, 2025
The Law for Founders by John Wires 💡 Essential Read for Every Canadian Entrepreneur
The National Crowdfunding & Fintech Association (NCFA) is thrilled to shine a spotlight on one of our founding members and esteemed advisors, John Wires (JW), as he launches a must read book for every Canadian entrepreneur, "The Law for Founders" or as we like to call it Founder Law. It's a toolkit to empower founders, entrepreneurs, and innovators to 'stick handle' the legal and strategic challenges involved with building a successful business.
About the Author
Author, John Wires
John Wires is a champion of innovation and seasoned Canadian corporate lawyer since 2013 (the year we met). JWs friendly, fair, and direct approach combined with a deep understanding of both the legal and entrepreneurial landscapes made him a cornerstone of the NCFA community in the early days. At that time, we learned that JW played in the Ontario Hockey League (OHL), a very high level of hockey. It taught him how to battle and compete to win. A trait that many high level athletes transfer into successful business careers and ventures. Since then, he's dedicated his career to helping entrepreneurs reduce legal risks, close successful deals, and build thriving companies in a multitude of high growth tech, e-commerce, and digital media sectors. Now, with Founder Law, he's sharing his expertise in an accessible and actionable format that promises to inspire and guide founders at ever stage of their journey.
Why This Book Matters
Entrepreneurs face countless challenges when launching and running their businesses. Unfortunately, many founders avoid key legal concerns until it’s too late, leading to costly mistakes. The Law for Founders is packed with practical legal advice tailored to the unique challenges of building and scaling a business in Canada, and is designed to equip founders with the tools they need to succeed.
What You’ll Learn
The Law for Founders dives deep into the critical topics that every founder must master, blending legal expertise with relatable stories and case studies:
- Choosing the right legal structure
- Raising capital and using holding companies
- Negotiating founder and shareholder agreements
- Securing intellectual property rights
- Hiring and firing employees
- Preparing for mergers, acquisitions, and exits
With nine chapters and 237 pages of insights, this book is a comprehensive resource for navigating the legal landscape of Canadian entrepreneurship.
Who Should Read This Book?
- Aspiring Founders > Gain confidence and clarity as you turn your idea into a revenue growing business.
- Startup Entrepreneurs > Learn about the legal complexities of early-stage ventures, from incorporation to employment law.
- Scaling Businesses > Protect your intellectual property, secure funding, and prepare for expansion or exit with the right legal strategies.
- Advisors and Business Professionals > Enhance your ability to support entrepreneurs by understanding their legal needs.
Special Discount for NCFA Readers
As a member of the NCFA's community, JW is offering a 25% discount on any digital version (PDF or EPUB) of the book. Simply use the code “NCFA” at checkout when you purchase:
- Buy Digital for $25
- Buy Paperback for $32.99
If you’re serious about building a successful business, The Law for Founders is a resource you can’t afford to miss. Grab your copy today, protect your vision, and take control of your entrepreneurial journey.
Buy the book with 25% discount code 'NCFA' --> Here
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, artificial intelligence, 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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RBC and Cohere Partner on ‘North for Banking’ AI Platform
AI Banking | Jan 9, 2025
Image courtesy of Freepik AI
RBC Teams Up with Cohere to Lead AI Innovation in Financial Services
Today, the Royal Bank of Canada (RBC) announced a partnership with Toronto-based AI powerhouse, Cohere, to develop an innovative AI platform for the banking sector called 'North for Banking' that prioritizes security, efficiency, and innovation. The platform will incorporate RBC's proprietary models and internal data systems and use Cohere's enterprise AI expertise to set a new standard specifically designed for the financial industry.
Ivan Zhang, Co-founder of Cohere:
"North for Banking will be an end-to-end AI solution that financial industry firms can seamlessly integrate to increase workforce productivity and operational efficiency. By prioritizing security and data privacy protections, companies can have peace of mind as they deploy it internally at scale."
See: Canuck Startups Cohere and Clio Secure Major Funding Rounds
Dr. Foteini Agrafioti, Senior VP of RBC Borealis and CSO at RBC:
"RBC is on a path to redefine what a bank is capable of, and AI will play an important role in our future success,"
RBC’s Decade of AI Leadership
RBC isn’t new to AI, and in fact, has been at the forefront of AI to make banking smarter and more efficient for the better part of a decade. In 2016, RBC launched an AI research institute Borealis AI to advance AI in finance, which has been key to launching a number of AI tools that are making a big impact on clients and internal operations today.
For example, RBC's mobile app launched NOMI, an AI tool that provides personalized financial insights to help customers by tracking spending, automating budgeting, suggesting savings opportunities, and forecasting future cash flow. Since launching in 2017, NOMI has saved clients over $4.5 billion.
Then in 2020, RBC launched a trading platform called Aiden that adapts in real time and uses AI to optimize trade execution pricing, reducing slippage and improving trading outcomes for clients.
Also in 2020, RBC partnered with tech firms Red Hat and NVIDIA to develop a cloud-based AI computing platform that improves RBCs ability to scale research and deploy machine learning applications and AI services efficiently across the bank.
AI also plays a huge role daily in responding to customer questions in a streamlined and accurate way.
Implications and Why This Matters
RBC's collaboration with Cohere will most certainly catch the attention of its competitors, putting industry on notice and spurring more capital investment and innovation. Other major Canadian banks, such as TD, Soctia and BMO are likely to accelerate their own AI initiatives to keep pace, either through their own AI industry collaborations or building internally. Smaller financial institutions and credit unions may look to strike partnerships with larger players or fintech firms to integrate similar capabilities.
See: OECD-FSB Discuss New AI Trends in Finance
Also, it's conceivable that the North for Banking platform could eventually be licensed to other financial institutions, adding a new revenue stream while advancing adoption and industry standards. For fintech companies, the platform could potentially serve as a hub that they can tap into to develop specialized applications in areas like decentralized finance or green finance.
Outlook
This is one to watch at large, as the platform rolls out over the next several months to boost productivity, improve security, and deliver new customer experiences. RBC's commitment to AI innovation is already paying off.
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, artificial intelligence, 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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Fidelity Report Insights on Digital Assets in 2025
Digital Assets | Jan 8, 2025
Image: Fidelity Digital Assets Look Ahead 2025 (Fidelity report)
Fidelity's Digital Assets 2025 Report Shows Innovation and Global Adoption
Since launching in 2018, Fidelity Digital Assets (FDA) provides secure custody, asset management, 24/7 trading, and crypto market analysis and develops blockchain solutions to bridge traditional finance with decentralized systems and helps institutional clients adopt digital assets confidently. FDA recently published 'Fidelity Digital Assets 2025 Looking Ahead' (34 page PDF report) offering some key data points and trends at the forefront of digital asset markets. This article provides an overview of the report to keep you informed.
Spot Bitcoin ETPs Continue to Grow
Investors seem to love Spot Bitcoin exchange-traded products -> view Bitcoin ETF Volume Tracker. By the end of 2024 they held over 1 million Bitcoin, which is equivalent to 5% of the total supply and assets under management of $114 billion. Comparatively, this growth far outpaces the adoption of early gold ETFs. 80% of the investments come from retail but institutional participation is rising due for advanced investment strategies to manage exposure and hedge risk.
Stablecoins Transactions Rival Visa Volume
Stablecoins processed (trading, remittances, cross border payments) $12 trillion in transfers in 2024 which is darn close to competitor Visa’s $13.2 trillion annual transaction volume. Daily trading volumes broke a record of $120 billion in November 2024.
See: National Bank Doubling Down on MicroStrategy’s Bitcoin Boom
Layer 2 solutions have drastically improved scalability by reducing fees by over 90% making stablecoins suitable for everyday transactions. Regulatory clarity in the EU and other regions will likely fuel further adoption.
Ethereum’s Scaling Upgrades Pays Off
Ethereum’s network upgrades are making transactions faster and cheaper. Rollups and Layer 2 solutions like Optimism and Arbitrum have cut fees by over 90%. The upcoming Prague/Electra upgrade will make Ethereum even quicker and more efficient by improving how it handles data. This is all to say that Ethereum is still a top choice for decentralized finance and digital assets.
Bitcoin Miners Adapt
Declining transaction fees on Bitcoin’s network is pushing miners to innovate. Protocols like DATUM are decentralizing mining which gives participants more control. Further, countries with low cost energy are emerging dominant players in the Bitcoin mining sector due to cost/margins.
Tokenization Expands
The tokenization of real world assets (RWAs) like real estate, bonds or even car titles into digital formats grew to $14 billion in 2024 ($8 billion in 2023) with projections reaching $30 billion by 2025. For example, California’s DMV is digitizing 42 million car titles using Avalanche to reduce costs, increase transparency, and democratize access to assets.
Governments Turn to Bitcoin
Governments are also increasing their Bitcoin reserves. The United States holds 198,000 Bitcoin ($20 billion), followed by China with 190,000 Bitcoin. Smaller countries like Bhutan and El Salvador are leveraging Bitcoin for economic security.
See: Investing in the Future of AI and Blockchain
While many of these bitcoin/crypto reserves are actually seized assets from various fraud cases, any active Bitcoin accumulation by governments is viewed by the market as a positive signal of the growing acceptance of Bitcoin as a financial reserve.
DeFi Lending Grows
Decentralized finance loans reached $55 billion in total value locked in 2024, up more than double from $22 billion in 2023. Also, Bitcoin’s integration into DeFi is creating new opportunities for collateralized loans. More and more traditional financial institutions are looking at these markets due to higher yields and the fact that President-elect Donald Trump's administration is pro-crypto and will provide much needed regulatory clarity.
Conclusion
The Fidelity Digital Assets 2025 Look Ahead Report provides a simple overview of some key trends that are moving crypto from a niche and volatile investment towards a mainstream financial investment and tool. The world has finally reached its tipping point of embracing these new technologies and is at work to redefine the global financial system of digital modern times.
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, artificial intelligence, 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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2024 Investment Crowdfunding Ecosystem Report Insights
Investment Crowdfunding | Jan 4, 2025
Image: Investment Crowdfunding Ecosystem Report 2024, Crowdfund Capital Advsiors
CCA's 2024 Investment Crowdfunding Report Tells a Story of Resilience, Growth, and Transformation
Thanks to NCFA Advisor and Principal at Crowdfund Capital Advisors, Sherwood 'Woodie' Neiss for putting together and publishing the 2024 Investment Crowdfunding Ecosystem Report which is available for download at no charge. It's a mammoth task to track and analyze so much transactional data, year after year, so hats off and much credit where it's due.
This article draws on the data and insights from the report to keep you informed of the latest equity crowdfunding trends. In a high interest rate environment where traditional venture capital slowed, investment crowdfunding continued to forge new capital volumes while creating jobs and reinvesting billions (yes, that's billions) back into local economies in the U.S. the focus of the report.
See: CCA Policy Proposal to Expand Investment Crowdfunding
Sherwood Neiss, Principal of Crowdfund Capital Advisors:
"Crowdfunding isn’t just about raising money—it’s about fostering ecosystems of innovation, jobs, and intergenerational wealth."
Key Report Takeaways - Impact, Impact, Impact
1. Record Capital Raised
Equity Crowdfunding campaigns raised a total of $547 million in 2024, thanks to parallel offerings, which combine retail and accredited investor funding. Without parallel offerings, standalone Regulation Crowdfunding (RegCF) from retail investors only raised $375 million (down from it's peak of $554 million in 2021), continuing a 3 year slide. In our mind, equity crowdfunding always combined retail + accredited investors but parallel offerings makes strategic sense as they can tap into different networks with the appropriate exemptions.
2. Job Creation Soars
One statistic that jumps out is the impact that RegCF has had on job creation. In 2024, investment crowdfunding supported companies created 110,976 jobs which is a whopping 1625% increase from the 6,432 jobs that were generated from crowdfunding in 2016.
See: Public Market Challenges and Equity Crowdfunding Capital
The average crowdfunded company employs approx 10 people, which is also double the workforce size from earlier years. These businesses are small to medium sized enterprises (SMEs) that are often community-focused and reinvest in their growth locally creating a positive ripple effect in the economy.
3. Strong Valuation Growth
Investors are becoming more and more confident in crowdfunded businesses, as there are more and more success stories and a broader range of companies that are raising investment crowdfunding capital.
Pre-revenue startups that were crowdfunded, achieved an individual median valuation of $10 million, which has doubled from $5 million in 2016. Post-revenue companies achieved an individual median valuation of $20 million, demonstrating that scaling companies with proven revenue models attract greater interest in investment crowdfunding markets. These trends reflect the maturity of crowdfunding markets and the ability to facilitate capital for companies of all stages of development. See: Revolut’s Crowdfunding Success from Start-up to $45 Billion
4. Economic Ripple Effect
Crowdfunded businesses reinvested $26 billion back into the economy in 2024, according to the report. That's an astonishing figure but not entirely surprising given that many are local, community-based SMEs who understand organic growth and the need to reinvest in their communities and local economies.
See: How Fintechs Are Unlocking Value in Private Markets 2024
This reinvestment figure works out to a 10x economic multiplier. By way of comparison, we've been in many meetings where either government or philanthropic entities are seeking ROIs of up to 3x for their capital commitments. 10x ripple can make waves.
Investment Crowdfunding Trends
1. Parallel Offerings Maximize Dollars and Impact
The combination of parallel offering by raising capital via RegCF AND Rule 506(c) exemptions is a growing trends that allows companies to attract capital from both retail and accredited investors. It also streamlines their campaigns and messaging, and demonstrates how crowdfunding markets are evolving to meet the needs of all types of investors.
2. Flexible Funding Models
As original visioned, investment crowdfunding isn't just about 'equity offerings'. In fact in 2024, 32% of campaigns were structured as debt or revenue sharing agreements. Model flexibility offers a variety of businesses more ways to crowdfund while catering to varying investor preferences, and ensures there are options for a wide range of industries and companies of various sizes/types.
3. Capital Distribution Beyond Major VC Hubs
Equity Crowdfunding continues to break down geographic barriers. In 2024, over 53% of capital was invested outside traditional tech hubs like California, New York, and Massachusetts.
See: Corporate Venture Capital in Canada: Insights and Challenges
As access to capital is democratized, innovators and entrepreneurs in smaller cities and even rural areas are becoming empowered to brings their ideas to life, levelling the playing field while promoting innovation across the country.
4. Resilience and Long-Term Value
Crowdfunding capital is more resilient than traditional VC/PE capital, as it is stickier and their own capital invested for the right reasons which is often beyond pure profit and aligned to support innovation, a community venture or aligned value/purpose. With enough years behind its belt, investment crowdfunding capital is finally showing it's strength as a reliable alternative to traditional channels. And with a 10x multiplier ripple effect on local economies and job creation, it's long term value is evident in community development and economic growth.
Why It Matters
Investment Crowdfunding is not just about raising money but about connecting everyday investors with innovative businesses and creating ecosystems of growth. In 2024, crowdfunding proved its ability to democratize finance, empower entrepreneurs, and drive measurable economic impacts. For entrepreneurs, policymakers, and investors, the message is clear:
"Crowdfunding is a vital tool for raising capital and driving innovation and economic growth in today's inclusive economy."
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, artificial intelligence, 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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OSC Crypto Trading Platform Compliance Review Findings
Regulation | Dec 20, 2024
Image: Freepik/upklyak
Are Restricted Dealer Crypto Platforms Doing Enough to Protect Investors? The OSC Weights In
The Ontario Securities Commission (OSC) recently conducted a compliance review of 6 restricted dealers operating crypto asset trading platforms (CTPs) in Ontario, and published a summary of their findings, "Staff Notice 33-757" (see press release). The results? A mix of compliance successes and serious gaps, especially in investor protection practices. Here’s what the OSC found, why it matters, and key takeaways.
Focus of the Review and Findings
This was about the fundamentals: are platforms doing enough to ensure that the people using them actually understand the risks involved? Are they setting limits to protect clients from losing more than they can afford? Specifically, there were 3 areas of concern being investigated:
1. "Account Appropriateness Assessments"
Are platforms making sure accounts are appropriate for their users,based on their individual financial situations and crypto knowledge? CTPs are required to evaluate clients based on their experience with crypto assets, financial circumstances, and risk tolerance.
See: OSC Urges Stricter Rules on Gamified Investing Features
The OSC found that some platforms are using inadequate processes, such as relying only on self-reported user information without sufficient verification. Many platforms use a bare-bones approach to assess whether accounts are appropriate for their clients. They rely too heavily on online forms and didn’t follow up on inconsistencies or update/maintain client information over time. This means people are being approved to trade without a clear understanding of whether the crypto investment is the right fit for them.
2. "Investment Limits"
Are clients being prevented from investing more than they should in a high risk investment or asset? The OSC sets investment limits on certain crypto assets to protect investors (especially retail investors).
The OSC found that most crypto trading platforms implemented the 'investment limits' but lacked an effective monitoring system. CTPs need a good mechanism to enforce the limits and also prevent clients from exceeding them, which is a problem because of crypto's volatility.
3. "Client Limits"
Are there suitable safeguards in place to stop users from losing too much money? Client limits refer to the maximum value of crypto assets a client can hold on a platform.
See: Regulatory Updates for Crypto Asset Trading Platforms
The OSC observed that some platforms do not have clear policies or systems in place to monitor client holdings (and compare them against the limits). This appears to be the biggest issue in the compliance review since CTPs are supposed to restrict people from losing more than they can afford. Too often platforms either ignore the limits or don't act quickly enough if client limits are breached. Clients aren't being warned in time and in some cases no action is taken at all.
Takeaways for Your Business
These findings should be a wake-up call if you operate a fintech or crypto business. The OSC is sending the industry and specifically CTPs a message to review their policies and internal systems to ensure they comply and tighten the ship. Here are some takeaways.
- Think of on-boarding as your chance to really understand your clients. what their financial situation is, their knowledge of crypto, and how much risk they can handle. Make sure you check in with them regularly and all information is verified and documented. Not just once a year but whenever things change for them or in the market.
- Limits are there for a reason. It's how much a client can invest or how much they can lose, so baking these guardrails into your system is critical. Have systems in place to monitor and track these limits in real time. Don't wait until it's too late - automate the alert process.
See: UK vs. Canada: A Tale of Two Different Crypto Consumers
- Communication is key. When clients are getting close to their limits, let them know. But do it in a way that’s clear and educational. This isn't financial advice. You're giving them the tools to make better decisions.
- Stay up to date with all regulatory updates and changes that may impact your business, and to remain compliant.
Final Thought
Consider this your advanced warning. Are your processes strong enough? Are your systems up to date? Are you putting your clients first? The OSC’s findings are an opportunity to plug gaps, strengthen your approach, and turn compliance into a competitive advantage.
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