Category Archives: Equity Crowdfunding, Alternative Funding

December 2, 2019   Enterprise, Scaleup, Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fintech Canada Directory, Fintech Services, Fundraising, Investing, Trading, Online Funding / Investing Campaigns, Online Funding / Investing Portals

Fintech Canada Directory Category: Capital Markets | DeFi | Crowdfinance

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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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights

NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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November 25, 2019   Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fintech International, Fundraising, Investing, Trading, Innovation and Resources, Legal Issues, Regulation, Consultation, Stories, Venture Funding and Building   No comments

Getting In Early: SEC Sees Growth In Equity Crowdfunding

Financial Advisor | John Bowens | Nov 20, 2019

early stage capitalLike the small businesses it was designed to help, equity crowdfunding is still in its start-up stage. But the U.S. Securities and Exchange Commission reports that it’s rapidly growing into a viable source of financing – and a new investment option for those who want to own a piece of an early-stage company.

Equity crowdfunding allows investors to become part owners of companies by trading their investment for shares of private stock. As with traditional crowdfunding, investments usually take place through a funding portal like Kickstarter, StartEngine or Republic. Investments may also be made through a broker-dealer’s online platform.

There are 45 such portals registered with the Financial Industry Regulatory Authority (FINRA), according to the SEC, but the top three account for about two-thirds of all offerings and proceeds raised. Wealthforge lists Reality Mogul, AngelList and FundersClub as the top three platforms.

RegCF SEC update Jun 2019 1

Signs Of Success

While equity crowdfunding is still relatively small, it’s showing signs of success. Companies such as Beta Bionics, which is developing a bionic pancreas, and craft beer company Hopsters Brewery each raised $1 million in crowdfunding campaigns. Beta Bionics recently raised $63 million through Series B equity financing.

In fact, a majority of crowdfunding campaigns have been successful, according to a new analysis by the SEC, which found that the success rate for crowdfunding companies increased from 58.9% in 2017 to 63.9% in 2018.

The SEC estimates that 1,351 offerings took place between May 16, 2016 and December 31, 2018. Offerings that were completed raised an average of $208,300 and a total of $107.9 million. The number of investors participating in successful offerings increased from 77,558 in 2017 to 147,448 in 2018.

While the U.S. market for equity crowdfunding is still small, globally equity crowdfunding has raised $2.5 billion, according to Startups.com.

Continue to the full article --> here

US Offerings by Stage

RegCF SEC update Jun 2019 4

Types of offerings

RegCF SEC update Jun 2019 3

The potential

RegCF SEC update Jun 2019 2

Download the 59pg PDF SEC report:  'Regulation Crowdfunding - Report to the Commission (June 2019)

 

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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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November 19, 2019   Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fundraising, Investing, Trading, Innovation and Resources, Legal Issues, Regulation, Consultation, Stories, Voices   No comments

US Reg CF Funding Portals: 50 in Total with Several Exits and Several Additions. Is Reg CF Ready to Scale?

Crowdfund Insider | JD Alois | Nov 18, 2019

US fundingPeriodically, Crowdfund Insider revisits the Reg CF sector of online capital formation. Reg CF or “Regulation Crowdfunding” may have garnered most of the attention from popular media but really there are three individual crowdfunding exemptions including Reg A+ and Reg D 506c.

Under Reg A+ you must file an extensive offering circular with the entire offering process costing around $300,000, according to one estimate. But Reg A+ enables an issuer to raise up to $50 million from both accredited and non-accredited investors.

Under Reg D 506c, you may raise an unlimited amount of money but only from accredited investors. This is the most popular crowdfunding exemption and Reg D (5o6c and 5o06b) is a trillion-dollar market.

Issuers using Reg CF may only raise $1.07 million and must utilize a FINRA regulated Funding Portal or a broker-dealer. Due to the low cap on funding, frequently issuers will do a side-by-side Reg D 506c offering to circumvent the extremely low amount you may raise.

Last time CI revisited the number of approved Funding Portals was in July. Since that time, several new funding portals have joined the approved list and several have exited.

See: 

 

Regarding Reg CF funding portal exits – two more have departed this sector of crowdfunding.

EquityBender based in Charleston, South Carolina, is no more. The domain just indicates a private site.

Seeding VR is the other exit. As the name indicates, Seeding VR was targeting the virtual reality sector. Apparently, it even attempted to launch a crowdfunding platform in the UK. Today, both domains simply time out.

This brings the total of funding portal exits to 12 with at least two the direct result of some time of enforcement action: UFP LLC and DreamFunding Marketplace.

The three additions to the list bring the total to 50 FINRA approved funding portals with one in question as Fundpaas has long been on the suspended list and is expected to join the exits.

The three recent additions include:

Fundopolis has yet to list its first offering but appears ready to launch its first issuer. According to its website, Fundopolis expects to also enable issuers to raise capital under both Reg A+ and Reg D as well.

Infrashares is described as follows:  “InfraShares is a crowdfunding platform that pools investment from individuals into large sums of development capital for critical infrastructure projects (roads, bridges, airports, mass transit, water systems, renewable energy and schools).”

This platform is utilizing Reg D as well. Currently, there are two issuers posted on the site -both under Reg D 506c.

Prospect Equity does not appear to have a live site as of yet.

As Crowdfund Insider reported in October, Reg CF has raised over $300 million in securities offerings since the exemption became actionable in May of 2016, providing capital to over 2000 campaigns. This is according to a report by Crowdfund Capital Advisors.

See:  When fintech met crowdfunding

Overall, Reg CF can be called a success as it has helped smaller companies raise much-needed growth capital while creating new jobs. But multiple shortcomings hobble the exemption thus undermining its potential success.

First, the fund cap is widely recognized as far too low.

Average seed rounds in the US stand at about $2.2 million – typically using Reg D. A good number raise much more.

In the UK, the most robust crowdfunding market in the world, issuers may raise as much money as they want. A prospectus requirement at €8 million creates a virtual speedbump for issuers looking to raise more than that amount.

Continue to the full article and list of 50 US RegCF platforms --> 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, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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November 7, 2019   Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fintech International, Fundraising, Investing, Trading, Innovation and Resources, Legal Issues, Regulation, Consultation, Stories, Voices   No comments

What the European Crowdfunding Industry Recommends for Harmonized EU Rules

Crowdfund Insider | JD Alois | Nov 5, 2019

EuropeLast month, Crowdfund Insider reported on comments by EC Vice President Valdis Dombrovskis, a Commissioner whose portfolio includes Financial Stability, Financial Services, and the Capital Markets Union, indicating harmonized crowdfunding rules may be forthcoming before the end of the year. In a tweet, Dombrovskis stated there is a “willingness to move forward and find compromises, hopefully still this year” (on investment crowdfunding).

Harmonization across all EU member states could dramatically help European SMEs and entrepreneurs access much-needed growth capital.  Platforms could operate across national borders with the assurance of a single set of regulations.

Currently, investment crowdfunding platforms must adhere to national, member state rules which vary dramatically across Europe. This fragmented ecosystem stands in stark contrast to what the European Union ostensibly seeks to achieve. Capital Markets Union has been a longstanding and obvious policy goal of Europe, but while simple in concept, the reality has been far more difficult to accomplish.

The most robust market for investment crowdfunding remains the UK – a country that will sometime soon exit Europe. While the UK platforms will continue to provide online capital formation across the continent, a single set of rules will help all involved. It will also foster competition between crowdfunding providers.

The leading voice for the sector of Fintech has been the European Crowdfunding Network (ECN) an association that has long advocated on behalf of a common-sense approach to regulation. Last month, the ECN published a position paper on what they expect the Commission should produce.

See: 

 

Currently, there are three proposals for regulatory harmonization as the European Parliament, European Commission and the Council have each had their say.

While it appears something (at some point) will be agreed upon, the ECN has itemized its point of view that, hopefully, the Commission will abide by as the industry understands the sector of Fintech better than anyone else.

So what does the ECN seek in final rules?

The ECN has published a position paper that outlines what the industry needs to succeed. The guidance comes in a 12 point outline of key issues. Below is a summary some of the more important aspects of the ECN’s recommendations:

  • Investment crowdfunding should be capped at €8 million. “A limit below €8 million is likely to exclude many of the types of businesses that the Regulation is intended to cover, explains ECN. Currently, the €8 million amount aligns with the prospectus requirement and is the de-facto cap utilized in the UK.
  • Conflict of interest: ECN states that it is very important that CSPs [crowdfunding service providers] be able to align their interests with those of sheir investors by investing in projects and/or charging carry as part of their fee model.
  • Investor classification: ECN believes sophisticated investors must meet one of a set of criteria to be deemed sophisticated:
    • (a) EUR 100k own funds; (b) EUR 2m net turnover; (c) EUR 1m balance sheet; and (2) natural persons that meet two of the following: (a) income of EUR 60k or investment portfolio of EUR 100k; (b) has worked in financial sector, or as an executive in a sophisticated legal person, for at least a year; (c) has carried out 10 significant capital markets transactions per quarter over past four quarters

See: 

 

  • Bulletin Board: This references secondary transactions. The ECN agrees that a buyer and seller should be able to transact on crowdfunded securities while stating there should not be an internal matching system.
  • Customer due diligence KYC: CSPs must apply due diligence measures including identifying the residency of an investor
  • Due diligence on issuers: ECN believes that due diligence is very important but the Parliament’s version (the only one provided) is not practical.
  • Entry Knowledge Test – consequences of failure: This has to do with risk notifications and the reality that many early stage investments have a high risk of failure. The ECN believes CSPs must warn non-sophisticated investors who fail or refuse to complete test but may still allow them to invest
  • Investment limits – There should be none.

Continue to the full article --> 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, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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October 23, 2019   Blockchain, Crypto, Digital Assets Regulations, Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs, Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fundraising, Investing, Trading, Innovation and Resources, Legal Issues, Regulation, Consultation   No comments

OSC LaunchPad approves TokenGX (Tokenfunder) for Secondary Trading of Digital Securities

OSC Launchpad | Pat Chaukos | Oct 22, 2019

FreedomX

TokenGX is the first company approved for pilot testing secondary trading of digital securities in Ontario and announces its disruptive FreedomX blockchain-powered marketplace.

October 23, 2019 – Toronto, Ontario – TokenGX Inc. (TokenGX) and its affiliate TokenFunder Inc. (TokenFunder) are pleased to announce that TokenGX has received approval from the Ontario Securities Commission (OSC) for pilot testing a secondary trading marketplace of digital securities.

The Ontario Securities Commission approved ground-breaking exemptive relief for TokenGX to launch and operate FreedomX, a secondary trading marketplace for security tokens issued by Issuers on the TokenFunder platform. FreedomX will be powered by TokenFunder’s leading edge blockchain technology. All participating investors will finally be able to buy and sell private market securities directly between themselves.

TokenGX Co-Founder Laura Pratt says “As part of the current Creative Destruction Lab blockchain cohort, our FreedomX platform will define the next generation of trading in Canada and unlock enormous value in the private markets. We envision a world where all assets will be tokenized and tradeable.”

TokenGX Co-Founder Alan Wunsche adds, “We are excited to receive the support of the OSC and specifically the OSC LaunchPad. The OSC LaunchPad team clearly understands the transformative potential of blockchain technologies in capital markets. Their willingness to grant exemptive relief in the private markets demonstrates a commitment to supporting innovation while putting investors first. This is an extremely important day for Canadian competitiveness in a global financial market.”

Wunsche continued, “TokenFunder’s leading edge security token issuance platform has a full investor onboarding and investing experience for retail and accredited investors. With today’s announcement, TokenFunder will now power the FreedomX secondary trading marketplace. With digital shares recorded on a public blockchain, we will not only dramatically reduce the cost of capital for Issuers compared to traditional platforms, but also provide liquidity through the secondary trading marketplace, which also includes critical ongoing management disclosures and investor relations services for our Issuers. These ongoing services will be good for both investors and issuers on the TokenFunder platform.”

For more information, the Decision Order is available at: https://www.osc.gov.on.ca/en/SecuritiesLaw_ord_20191023_tokengx.htm

Issuers interested in raising capital and marketplace liquidity are invited to apply at www.tokenfunder.com/onboarding/issuer

 

About TokenFunder and TokenGX

TokenFunder (www.tokenfunder.com) provides Canada’s leading security token issuance platform and investing experience designed for all investors. Its affiliate, TokenGX, is Canada’s first security token exempt market dealer. TokenGX provides high-potential startups, scaleups and mature businesses with proprietary technology and a clear regulatory path to execute Security Token Offerings (STOs) to raise capital and provide liquidity for their investors.

tokenfunder_new

Background

The Ontario Securities Commission (OSC), through the OSC LaunchPad, engages with fintech businesses that have innovative products, services or applications that benefit investors.  OSC LaunchPad assists businesses in navigating regulatory requirements and offers flexible approaches for them to fulfill regulatory requirements, including time-limited registration or exemptive relief from securities law requirements to allow them to test their innovative business models.

The Filer wishes to create a blockchain-based security token(token) trading platform for the trading among investors (investors)of their tokens that were distributed under prospectus exemptions in order to facilitate capital raising for issuers and to provide liquidity for the investors.The Filer is currently participating in the Creative Destruction Lab’s (CDL) Blockchain Incubator Stream, a 10-month program in which blockchain founders are mentored by veteran entrepreneurs, investors and visionaries in artificial intelligence and blockchain. CDL is an Ontario-based incubator program with locations across Canada and the UK that provides assistance tovarious seed-stage businesses, including technology businesses with a focus on blockchain applications.

See:  TokenFunder announces Canada’s first Security Token Exempt Market Dealer

Generally, some liquidity and transferability of tokens isdesired by investors to access their funds and for issuers in the development or growth stage of their business. Liquidity is limited for offerings of tokens under a prospectus exemption as the tokens issued are subject to resale restrictions.

The OSC recognizes that to keep abreast of and facilitate innovation, an environment to conduct commercial tests of novel business models, products and services is required. The Filer is seeking exemptive relief, as described below, to conduct a time-limited pilot test in order to gather data and operational feedback in a controlled environment, to assess the appropriate regulatory requirements, and to foster capital raising by innovative businesses in Canada and some liquidity for investors.

In the context of the OSCLaunchPad, the Filer submitted its business model and subsequently filed an application to the OSC as principal regulator to be exempted from certain requirements under applicable securities legislation to pilot test its proposed business model in a sandbox environment for a time-limited period. This Decision is based on the unique facts and circumstances of the Filer and for the limited purpose of allowing the Filer to pilot test its business in a limited commercial setting. Accordingly, this Decision should not be viewed as a precedent for other filers.

Continue to the Release --> here

View the OSC Decision Order --> 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, 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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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October 22, 2019   Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fintech Services, Fundraising, Investing, Trading, Innovation and Resources, Online Funding / Investing Portals, Press Releases   No comments

NEO and Silver Maple Ventures Inc. Introduce DealSquare to Disrupt Canadian Private Markets for the Better

DealSquare | Peter-Paul Van Hoeken | Oct 22, 2019

dealsquareLaunch of Canada’s first B2B centralized digital platform for private placements

Toronto, October 22, 2019 – NEO is pleased to introduce DealSquare, Canada’s first centralized platform to simplify private placements in Canada, by digitally connecting capital raisers to dealers and their investment advisor networks. DealSquare is a technology solution developed by NEO in partnership with Silver Maple Ventures Inc., the company behind Canada’s leading online B2C private markets investment platform, FrontFundr, DealSquare will support the entire private placement process from marketing investment opportunities and electronically managing the due diligence and subscription process, through to efficiently closing the deal.

By utilizing NEO Connect technology, exempt securities will be seamlessly integrated into client accounts and back office systems. With broader and more efficient access to private placement offerings, the costs and operational risks of raising private money will go down, ultimately expanding investment opportunities. It’s a win-win for capital raisers, dealers, investment advisors and investors.

Over the past ten years, investors have flocked to the private markets looking for superior returns and to add balance to their portfolios. However, despite the overall growth in private markets compared to public markets, asset managers and capital raisers of all sizes and stages are still limited in their ability to complete private placements without facing debilitating financial, operational and regulatory burdens.  Private placements have also traditionally relied on friends, family and business relationships, inefficiently raising money from a very small subset of the investing community.

See:  FrontFundr announces new chair of the board

DealSquare officially launched today, with three dealers immediately connected to the platform and six active private placement offerings.

“Private market investment continues to outpace the public markets; however, access to private offerings has been fragmented, marketed through word-of-mouth and transacted using archaic technology. Today, that changes,” stated Jos Schmitt, President and CEO, NEO. “Together with the team from Silver Maple Ventures, we are making access to private markets easier, more efficient and with less operational risk through DealSquare.

At NEO, our vision from day one has been to bring competition and innovation to all facets of the Canadian capital markets, including the private markets space. We are very proud to continue to deliver on our vision with the introduction of DealSquare. As of today, asset managers and capital-raising companies of all sizes can now partner with NEO to raise capital through multiple channels, whether through the public or private markets, on or off exchange.”

How DealSquare Works

Dealers connected to DealSquare can publish their approved deals to their investment advisors in an organized and centralized manner. They also have the option to open their deal rooms to other dealer networks. Due diligence teams can review all deal information in one place, then choose to approve an offering to be marketed to the advisor network. Registered advisors can download investor-ready documentation and share deal pages with their clients. Investment documents will be digitally executed on the platform, with reporting documentation instantly consolidated and organized. Upon closing, NEO Connect technology will be used to facilitate the electronic settlement of exempt securities into dealer
back office systems and client accounts.

“The private markets have been lagging the public markets with regards to access and efficiency in processing investments,” says Peter-Paul Van Hoeken, Managing Director of DealSquare. “With DealSquare, we simplify the private placement exchange and transaction between dealers and advisors in a fully digitalized and efficient online environment.

We are thrilled to partner with NEO on this opportunity. Our online capital raising and investment processing capabilities, combined with the NEO Connect technology, delivers a highly innovative and powerful private markets solution to the Canadian investment industry.”

See:  Why Partnerships Are the Future for Fintech

Dealer and Investment Advisor Access to DealSquare

DealSquare is available to all Canadian investment dealers. Independent investment dealer Aligned Capital Partners Inc. is one of the first three dealers to pioneer DealSquare.. Investment advisors from these firms can request access to DealSquare to open a registered account and access, analyze and transact private market deals. For more information on how to register, please visit the DealSquare website

“We recognize this innovative solution will give our advisors access to private investment deals that will add opportunity and balance to their client portfolios,” said Christopher Enright, Founding Partner, President & Managing Director, Aligned Capital Partners.“ Like Aligned Capital, NEO is focused on providing efficient services and innovative solutions that put the needs and interests of their clients at the forefront. As a strategic partner they helped forge our relationship with DealSquare and we are proud to pioneer this private market deal platform.”

Digital execution will be enabled with the full roll-out of the DealSquare platform, expected during the first half of 2020. During the pilot phase, PDF documentation and manual execution will be faciliated by the DealSquare team.

Raising Capital on DealSquare

Any Canadian private or public company – large or small - can use the platform for private placement offerings. Asset managers can also leverage DealSquare to provide investors with innovative investment opportunities. Working with a dealer to market a private placement on DealSquare will provide broader reach to secure investment interest. A streamlined, electronic investment process will make it easier and more efficient for advisors to subscribe and invest on behalf of their clients. This will lead to a reduction in the cost of raising capital, as access and interest in the private investment opportunity goes up.

See:  Debt vs. Equity Financing: Pros And Cons For Entrepreneurs

To learn more about how DealSquare connects Dealers, Advisors and Capital Raisers and how it makes it easy to find, analyze and share private market opportunities, please visit:
https://www.dealsquare.io/About

About DealSquare

DealSquare is a centralized digital platform that gives registered users the ability to efficiently find, analyze and transact private market deals. With the complete roll-out of the platform during the first half of 2020, this dealer-to-dealer platform will digitally support the private placement process: capital raisers publish their private placement opportunities; dealers complete their due diligence; and advisors electronically subscribe to a deal, with exempt securities seamlessly integrated into client accounts and back office systems utilizing NEO Connect technology. DealSquare is a joint initiative between NEO and Silver Maple Ventures to make private markets better and more efficient.
https://www.linkedin.com/company/dealsquaretech/ | https://twitter.com/dealsquaretech

About NEO
NEO or the NEO Group comprises Aequitas Innovations Inc. and its subsidiaries, a group of established fintech companies that provide capital markets infrastructure designed for and led by the industry. Our competition, innovation and advocacy enable change, for the better. NEO is currently home to two capital raising solutions, NEO Exchange, a progressive stock exchange that brings together investors and capital raisers within a fair and transparent environment, and NEO Connect, a technology platform that enables the distribution of financial assets not listed on a stock exchange. To learn more, please visit:  https://www.aequitasneo.com

 

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

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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October 21, 2019   Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fintech International, Fintech Opinions, Innovation and Resources, Online Funding / Investing Portals, Voices   No comments

When fintech met crowdfunding

AltFi | Luke Lang | Oct 21, 2019

luke lang crowdcubeSomething special is happening at the intersection of retail investors and financial technology, writes Crowdcube's Luke Lang.

It became clear that fintech companies began to prize crowdfunding three years ago. Monzo crashed our servers in 2016 when it raised £1m in 96 seconds. Last December, the now-serial crowdfunding neobank raised £20m from retail investors.

The staggering thing about Monzo’s raise – and it speaks volumes about where crowdfunding and fintech have reached – is that it did not need to raise the £20m from any of us on the street. In October – i.e. just two months shy of the raise – the bank had closed an £85m round led by VC firm Accel. Raising £20m is no walk in the park. You need to build a prospectus, which is a lengthy and expensive process. Monzo’s crowdfunding raise capped all investments at £2,000, meaning the team chose to have more investors to look after.

See:  Canada Update: Alberta Updates Crowdfunding Regulations but Where Does Canada Stand in the National Harmonization of Rules? What about Fintech Development?

The world’s leading fintechs are using crowdfunding to cement and enhance their relationship with their customers. The latest Unicorns report from Beauhurst, an independent analysis firm, identifies the UK’s 21 unicorn companies – those worth $1bn (around £760m) or more. Of the 21, six are fintechs, and two are digital banks: Monzo and Revolut. Both have turned to crowdfunding – at a time when they are the darlings of the tech scene and its investors – to raise capital.

Why?

To answer that, I believe we have to go back to the financial crisis. After 2008, a chasm opened up in financial markets, encouraged by a profound lack of trust. We’re well-versed with the outcomes. The banks that survived had to change their ways, and new players came onto the scene. A decade later, it is the novel relationship between these latest entrants and consumers that gives us an idea of what the future looks like: a world where any business-to-consumer company knows that sharing ownership with its customers is fundamental to long-term success. This is the cooperative movement of the twenty-first century, and it is driven by technology.

Curve, Nutmeg, Freetrade – all these leading fintech companies that want as many as possible to profit from their success. In the last 12 months, we have facilitated the raising of £67m across 21 fintechs. By giving people skin in the game, these firms are securing a base of customers, and champions. From a commercial perspective, each customer’s lifetime value is hugely enhanced. Our customers find that their shareholders are less likely to move providers, more likely to refer friends and family, and more likely to buy more products and services.

Making consumers owners and giving them a say has become integral to how these companies run. Indeed, many are now building their own platforms to manage ownership. What does this tell us about the future? Here are businesses offering equity – not for money, not because they want to list, but to build an affinity with their customers. As these relationships evolve, both sides benefit: greater engagement – better products – more customers – growth – profit – both sides capitalise.  It could be called the democracy of building business.

See:

Technology is making this shift around the consumer possible not just in finance, but across markets. While the former has emerged as the vanguard, there are other non-tech sectors that have leapfrogged traditional ownership structures and cemented their own success. Food and beverage, historically underserved by the financial world, was an early adopter of crowdfunding. BrewDog is the poster child for this – a four-time Crowdcube funded brewery. It has 120,000 investors, aka Equity Punks, who, in its words, kick-started the craft beer revolution and, presumably, enjoy its beer. The prospect gets so much more exciting when you start to think of the markets that are hardest to disrupt, build a community around, and fight injustices: insurance, mining, the coffee industry, healthcare.

We are going to see another huge change: big businesses are signalling they’re stepping up beyond paying lip-service with grandiose CSR initiatives.

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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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