Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Category Archives: Equity Crowdfunding, Alternative Funding
Reg A+ Offering Platform Announces Expansion into Canada: Issuance
Crowdfund Insider | | Dec 6, 2022
Image: Pixabay/TheDigitalWay
Issuance, a platform that specializes in aiding issuers raising capital under Reg A+, has announced its expansion into Canada.
- According to a company statement, Issuance is now an “endorsed service-provider partner” of the Canadian Securities Exchange (CSE). The arrangement allows Issuance to offer preferred rates for CSE-listed companies, including reduced onboarding fees.
- Issuance said that it sees Canadian digital markets as underserved, representing an opportunity for firms enabling online capital formation. That being said, Issuance will have multiple competitors that facilitate private securities sales for a market that tends to punch above its weight class.
Darren Marble, co-founder and CEO of Issuance, said they are excited to partner with CSE, an exchange known for supporting Canadian entrepreneurs.
See: Listed Issuer Financing Exemption: Canadian Securities Regulators Adopt Streamlined Capital-raising Option
“As one of the limited number of platforms approved by the CSE as a recommended service provider for issuers, we believe this supports our position as one of the top platforms in the space.
“With equity crowdfunding limited in Canada as compared to the United States, we continue to see a growing number of Canadian issuers looking south to raise capital from both accredited and non-accredited investors,” said Marble. “The CSE has served these entrepreneurs well, and we at Issuance look forward to doing the same.”
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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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Canadian Equity Crowdfunding Firm, DealMaker, Named 3rd Fastest Growing Company in Canada
Crowdfund Insider | | Sep 23, 2022
DealMaker, a crowdfunding company based in Canada but providing services across the US, has been named the 3rd fastest growing company in Canada – reporting a huge 500% rate of growth. While based in Toronto, DealMaker reports 124 employees with a presence in both the US and South America.
- Co-founded by two attorneys, Rebecca Kacaba and Mat Goldstein, DealMaker is a Toronto-based company that offers sophisticated capital raising tools for companies raising money by selling securities online.
- DealMaker powers a portfolio of primary issuance, shareholder management, and capital raising solutions that includes equity crowdfunding, investor ranking algorithms, and data tools to support all capital raise types and all securities.
- DealMaker enables the full stack of securities exemptions in both the US and Canada – including Reg A+, Reg CF, and Reg D as well as the OM exemption [Offering Memorandum] and private placements.
See: JOBS Act of 2012: Ten Years of Legalized Investment Crowdfunding
- Since the firm’s launch, DealMaker has processed a whopping $1.6 billion in funding enabling more than 650,000 investments. The company claims to have enabled more funding than any other competitor in North America.
- They have a Broker Dealer license, operating via DealMaker Securities
“Our innovation is advancing the equity crowdfunding space by increasing access to capital to founders who previously have been under-funded while also providing pre-IPO investment opportunities for those not behind the gilded gates of Wall Street. We have always been issuer-focused. We’ve built a platform that allows issuers to white-label our technology so they can effectively raise capital on their own website. This is a far cry from the competition, which aggregates multiple deals with a focus on attracting and delivering value to investors,” explained Kacaba.
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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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Reg CF in the U.S. Created 300,000 Jobs and Boon for Local Economies, Women. and Minorities Seeking Funding
Crowdfund Insider | | Sep 29, 2022
In 2021, the SEC took an important step in helping the ecosystem by increasing Reg CF from an anemic funding cap of $1.07 million to $5 million. Industry insiders believe the cap should actually be more than that – at least $10 million, or higher. The JOBS Act 4.0 seeks to improve upon Reg CF alongside other capitol formation policy goals. Hopefully, Congress will bump #J4 to the top of the legislative list, by now, the benefits should be clear.
See: JOBS Act of 2012: Ten Years of Legalized Investment Crowdfunding
This past week, the Association of Online Investment Platforms (AOIP) visited with multiple House and Senate offices, along with the Securities and Exchange Commission, to share the success of the exemption, alongside the other exemptions that help companies raise money online.
Crowdfund Capital Advisors (CCA) was helpful in providing an update on Reg CF. Sherwood “Woodie” Neiss, Principal at CCA, stated that Washington, DC needs to be reminded of the success. Some key points provided by CCA, include:
- Companies that have raised funds online have pumped over $3.4 billion into local economies by purchasing goods and services mainly from local vendors.
- Another interesting data point is that women and minority founders are seeing a higher success rate (67%) than white male founders (48%).
- The economic value of successful issuers is scaling and will lead to some sizable returns for investors
- Companies are receiving funding all across the USA, in more than 1,500 cities, and in over 500 different industries
- The success rate of issuers raising funds online is greater than other forms of financing which is why women and minorities are turning to investment crowdfunding as their preferred method for capital formation
- Over 300,000 jobs have been created or supported as a direct result of investment crowdfunding proving it can be a jobs engine and live up to its namesake, the JOBS Act.
See: Fintech Fridays EP57: 10 Years of Investment Crowdfunding: Past, Present & Future Since the JOBS Act
“As we enter this uncertain period for our economy, we are reminded that the key to keeping local economies strong is supporting local businesses.These local businesses include small/medium businesses as well as pre-IPO startups that aren’t heading to Silicon Valley anymore. As the capital markets recoil, investment crowdfunding will play a larger role in supporting these businesses and our overall economy.” Sherwood Neiss
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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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FrontFundr Launches Its Own Fundraising Campaign to Raise Up to $5M | Open to the Public Until Nov 4
Betakit | Josh Scott | Sep 21, 2022
FrontFundr has launched its own fundraising campaign on FrontFundr, which the company said will remain open to the public until November 4.
- Toronto-based FrontFundr has announced that it has helped startups raise over $140 million across more than 100 fundraising campaigns using its equity crowdfunding platform.
- Since Canadian regulators introduced harmonized crowdfunding rules across Canada, making equity crowdfunding more accessible, Van Hoeken has seen its popularity rise, especially as broader economic conditions have worsened.
- So far, FrontFundr has raised a total of $7.3 million CAD from over 900 investors. The company aims to raise another $2.5 million to $5 million through its latest offering to support its product development plans and boost its sales.
- To date, FrontFundr has built a community of more than 30,000 users. The startup’s platform has helped Canadian tech startups like Manzil, Caary, and FrontFundr itself raise capital.
- Van Hoeken also sees a future where FrontFundr can help more public companies raise money using its platform. Over the longer-term, FrontFundr has ambitions to “spread [its] wings” across North America and into the United States.
See: Fintech Fridays EP57: 10 Years of Investment Crowdfunding: Past, Present & Future Since the JOBS Act
Peter-Paul Van Hoeken, Founder/CEO, FrontFundr:
As interest rate increases restrict available capital, more founders and growth stage companies will be looking at alternative financing options to bolster their available capital options along different funding stages, from pre-seed and seed to Series A. Investment crowdfunding offers founders an attractive and viable alternative or additional source of funding to traditional angel and VC investment. As a result, we’ve seen an increasing amount of funding raised through investment crowdfunding.
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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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Support NCFA by Following us on Twitter!Follow @NCFACanada |
CI Interview: Securities Crowdfunding Under Reg A+, Reg CF, Fractional with Etan Butler of Dalmore Group
Crowdfund Insider | J.D. Alois | Sep 8, 2022
Dalmore Group is a regulated broker-dealer that is very active in the securities crowdfunding sector, helping firms raise money using Reg A+ (Regulation A), Reg CF, as well as Reg D. Dalmore not only enables funding via exempt securities offerings but it also provides secondary share access, including fractional share offerings.
While Reg D (both 506c and 506b) is only available to accredited investors, Reg A+ and Reg CF allow non-accredited investors to gain access to private securities. Last year, the Securities and Exchange Commission made several material improvements to the private securities marketplace including increasing the funding cap under Reg CF to $5 million, from an anemic $1.02 million and Reg A+ from $50 million to $75 million. These changes, along with several others, have been good for the securities crowdfunding market as funding portals and broker-dealers work to assist private firms to gain the growth capital they need to thrive.
As the online investment market has grown, several broker-dealers have risen in prominence in this business – Dalmore is one of them. Their name is frequently listed as the broker of record on securities offerings (think the recent Boxabl success) – including Reg A+ issuers which do not need to be listed on a platform. According to the company’s website, Dalmore has worked with over 230 issuers having facilitated over $3.6 billion in live Reg A+ offerings – including a pipeline of a whopping $4.3 billion in future securities offerings.
See: Regulatory Committee: SEC Small Business Advisory Votes to Improve Secondary Trading of Reg A+ Securities
Recently CI connected with Etan Butler, the founder and Chairman of Dalmore Group – to discuss online capital formation today and his expectations for the future:
Select Interview Highlights
- Hockey stick growth: Asked if the COVID health crisis, and rising inflation have impacted Dalmore’s operations – similar to what we are hearing about VC funding – Butler said, no it hasn’t and the number of clients and inbound calls has increased consistently.
- Online funding channels gaining popularity: Butler added that more companies are showing a preference for online capital formation as opposed to being forced into it – say a SPAC has fallen through. While there is risk in choosing any path, the option to crowdfund and raise on own terms is gaining in popularity said Butler.
- RegA+ specialists: “We work with companies looking to raise $3 to $5M which is often a bridge to a Reg A”+, he said. Butler added that they do a lot of Reg Ds but, at this point, the vast majority of their clients are Reg A+ issuers with Reg CF and Reg D offerings growing. There are also a number of Reg S (international) offerings they have enabled.
See: Free to Trade: Securities Issued Under Reg A+ May Trade in Canada
- On deal quality: Butler acknowledged that when you open up the private securities market there will be more deals that are “subpar.” But at the same time, there will be more deals that come to market that can be the “next big thing.”
- You highlight fractional shares on your website. This allows the issuer to fractionalize the asset. At the time of our discussion, Dalmore had worked with more than 35 Series issuers. Butler said these can help an investor diversify their portfolio too as they can determine what assets they hold as opposed to someone else’s fund. There is a caveat that some of these assets may have very little liquidity.
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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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Equity Crowdfunding Growth: It Took UK Seedrs 8 Years to Raise the First £1Billion and Only 2 Years for the Next Billion
Crowdfund Insider | | Aug 24, 2022
Ten-year-old securities crowdfunding platform Seedrs has recently posted a blog on platform capital raising, which highlights sector growth. Seedrs reports that it took 8 years to top £1 billion in funding raised, but two years later, Seeders has doubled that amount surpassing £2 billion this month (or £2.1 billion according to their website).
The money raised represents 1722 deals, with probably a good number of follow-on rounds. Investors come from 90 different countries to back these private ventures.
See:
$100M Crowdfunding Deal: Republic acquires the UK’s Seedrs for European expansion
While not all of these early-stage firms will generate significant returns for investors, some do – just like a professional VC expects. At the same time, the money invested in these companies gets spent on running a business, jobs are created, and employees gain valuable experience in the real economy. A thriving, innovation-driven economy that generates wealth and prosperity by default entails risk.
Jeff Kelisky, CEO of Seedrs, said the company’s performance validates “all that hard work” as they focus on building a truly global investment platform:
“It really is the most revolutionary time for Seedrs and I can’t wait for our next chapter.”
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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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Support NCFA by Following us on Twitter!Follow @NCFACanada |
Regulatory Committee: SEC Small Business Advisory Votes to Improve Secondary Trading of Reg A+ Securities
Crowdfund Insider | | Aug 2, 2022
The Securities and Exchange Commission (SEC), Small Business Capital Formation Advisory Committee (SBCFAC) met today to discuss liquidity for certain exempt securities in the form of secondary trading. More specifically, the Committee addressed securities issued under Reg CF (Regulation Crowdfunding) and Regulation A (Reg A+).
In opening remarks, SEC Chairman Gary Gensler stated:
“I look forward as well to the Committee’s discussion on secondary market liquidity for investors in Regulation A and Regulation Crowdfunding companies, and for smaller public companies. I would be interested to learn about the Committee’s thinking on these matters as it relates to promoting investor protection and facilitating capital formation.”
Ryan Feit, CEO and co-founder of SeedInvest:
- Highlighted multiple successful offerings listed on SeedInvest that generated significant returns to investors, said there were two major outstanding hurdles to the market.
- First diversification. Given the high rate of failure for younger firms, Feit advocated for the ability to create funds of early-stage firms under the exemptions.
- Second liquidity - Waiting five to ten years to get a return, even when the firm is performing well, ultimately leads to less capital for these businesses. The lack of liquidity is a “huge issue,” and regulatory changes could create a “vibrant secondary market.” He also shared that greater clarity on digital securities would be helpful as distributed ledger technology could drive efficient trading in a number of ways.
Joan Adler, partner at Ellenoff, Grossman and Schole:
- In the early days of the JOBS Act, great focus was on primary issuance. Now there is interest in secondary transactions, yet individual investors are challenged to sell shares, and issuers must manage a fragmented regulatory environment as secondary trading does not benefit from state pre-emption – meaning you must deal with the peculiarities of all 50 states and territories. A herculean task.
See: Private markets propelled by ‘push and pull’ have grown exponentially
Andrea Seidt, the Ohio Securities Commissioner and representative of NASAA:
- She understands the need for capital formation, but she “strongly opposes” a statement in support of secondary trading.
- Pre-emption will lead to harsher outcomes. She also said Feit’s examples of successful offerings that generated returns for investors was “cherry picking” and demanded more data on the success and failure rate of crowdfunded securities.
Outcome
In the end, the Committee voted on a recommendation to request the Commission allow pre-emption for securities issued under Tier 2 of Reg A+, an exemption that enables issuers to raise up to $75 million and must be qualified by the SEC. The Committee described it as a “pilot program” to support secondary trading that will provide for a harmonized environment to address the issue – one that the Committee has been discussing for years.
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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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Support NCFA by Following us on Twitter!Follow @NCFACanada |
