Rojin Nair, Advisor
June 1st, 2021
At Incyub8 Inc, Rojin is focusing on nurturing and guiding various national and international start-[...]
Category Archives: Equity Crowdfunding
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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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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Support NCFA by Following us on Twitter!Follow @NCFACanada |
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.”
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
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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.
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
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Support NCFA by Following us on Twitter!Follow @NCFACanada |
JOBS Act 4.0: Association of Online Investment Platforms Sends Letter to Congress
Crowdfund Insider | | Jul 17, 2022
The Association of Online Investment Platforms (AOIP) has forwarded a letter to members of Congress in support of the JOBS Act 4.0 legislation.
In the spring of 2022, Republicans on the Senate Banking Committee submitted draft legislation on the 10th Anniversary of the JOBS Act of 2012, labeling the bill the JOBS Act 4.0. The JOBS Act of 2012 was the bipartisan legislation that legalized online capital formation or investment crowdfunding. Three exemptions, Reg A+, Reg CF, and Reg D (506c) were created or updated to enable firms to raise money online from investors.
Other aspects of the JOBS Act of 2012 have also been credited with aiding economic growth. Signed into law during the Obama administration, the legislation was heralded as an example of what both parties could do in partnership to support smaller firms and the economy in general. Now, ten year’s later, the economy is stumbling once again and a new economic impact bill, aiding entrepreneurs and innovators may be just what the country needs.
See: Improving the Regulatory Environment for Entrepreneurial Capital Formation: JOBS Act 4.0
Feedback on the draft legislation was accepted until June 3, 2022 (but they will probably accept more).
The JOBS Act 4.0 legislation incorporates bills that have previously been channeled through Congress but without becoming law seeks to:
- Encourage companies to be publicly traded – includes eight initiatives to encourage companies to become public, particularly during earlier growth stages, when investors have the chance to earn the highest returns.
- Improve the market for private capital – includes six initiatives to reduce costs associated with seeking capital by appropriately tailoring regulations for small businesses.
- Enhance retail investor access to investment opportunities — includes eight initiatives to prevent retail investors from being excluded from certain investment opportunities.
- Improve regulatory oversight — includes seven initiatives to enhance investor protection and privacy and to update outdated statutory and regulatory provisions.
See: Fintech Fridays EP57: 10 Years of Investment Crowdfunding: Past, Present & Future Since the JOBS Act
Around the time the draft legislation was introduced, David Burton, Senior Fellow in Economic Policy at The Heritage Foundation, noted that the JOBS Act of 2012 substantially improved the laws governing entrepreneurial capital formation having a positive impact on entrepreneurial activity. Burton wrote a comprehensive explanation of the JOBS Act 4.0 for CI this past May.
Signed by AOIP President, Youngro Lee, the states that the comments:
“…have been prepared based on actual, extensive experiences of some of the leading online investment platforms in the US that have successfully utilized existing private securities offering exemptions and deeply understand the difficulties and challenges associated with the current exemptions. We sincerely believe that codifying any of these suggestions would greatly facilitate broader adoption of private securities offering exemptions for the benefit of small businesses and everyday investors.”
So will the JOBS Act 4.0 become law?
Continue to the full article --> here
Download the 3 page PDF letter --> 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
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Support NCFA by Following us on Twitter!Follow @NCFACanada |
Startup CityFALCON raises $2m equity on Seedrs including participation from Holt
CityFALCON | Release | Jun 23, 2022
LONDON, June 23, 2022 /PRNewswire/ -- London and Malta based fintech CityFALCON closed an equity fundraising campaign on Seedrs of £1.65m ($2m) to scale up the business and bring even more insightful products to market faster.
On Seedrs, the leading UK private investment platform, CityFALCON has leveraged individual investors from their growing fanbase and onboarded institutional investors. The commpany boasts 2300 existing investors, with 1200 coming on in this round, including new and repeat investors.
See: Brex is Off-boarding Tens of Thousands of Small Businesses, Not Startups
eToro, the social investing network with over 27 million registered users globally, took a small position in the company. eToro is a client and powers its News tab with CityFALCON content, providing users with a quality contextual newsfeed to inform investment decisions and increase engagement.
As further validation, The Holt Xchange, a global early-stage VC firm and platform in Canada, and Terance Butler Holdings (TBH), a property investment company in the UK, have both taken stakes.
TBH's investment enhances their portfolio of high-growth, IP-based companies. Stephen Walker, Investment Director at TBH, said "We are excited to invest in CityFALCON at what we believe is a pivotal time for the company. Having gained traction, we believe now is the right moment for the company to scale up its sales & marketing effort whilst continuing to develop the product".
See: Are you a Pig, Gazelle or Bear? Beyond Unicorns, Zoology of startups
Managing Partner at Holt Xchange, Elisabeth Laett, stated:
The democratisation of financial information is the result of a global demand to access better education and deeper financial insights for a broader audience. We have been impressed with the team's mission at CityFALCON and pleased to further support them in this seed round.
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
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Support NCFA by Following us on Twitter!Follow @NCFACanada |
Hardbacon: Why we launched an equity crowdfunding campaign in the middle of a bear market
Hardbacon | Julien Brault | Jun 16, 2022
When we launched our equity crowdfunding round in May, the stock market was down 20% year-to-date and the value of Bitcoin had fallen 35%. While many of our investors were eager to reinvest, it was also obvious that many of our investors were impacted by the downturn and could decide not to reinvest in Hardbacon.
That said, postponing the round didn't necessarily seem like the right decision. First, I didn't have a crystal ball to tell me when, in the future, the markets would be more conducive to such funding rounds. Second, I knew that by successfully closing a round despite the economic environment, Hardbacon would be better positioned than ever for what comes next.
And it worked, since we reached our funding goal of $500,000 within a week of launching the round!
Right now, many fintechs are cutting positions in order to survive longer without seeking new capital. However, at Hardbacon, we’re actually looking to expand our team to accelerate our growth and to solidify our status as a key player in personal finance and financial product comparison tools in Canada.
As we plan to expand through acquisitions while simultaneously investing in our organic growth, the shortage of traditional sources of capital for start-ups could work in our favour. As VC funding is bound to get more scarce, our competitors will seek to sell themselves and we should be well positioned to snag the best in breed!
Hardbacon: a growth success story
As of today, Hardbacon reaches at least 232,000 unique visitors every month through its website, 38,000 registered users on its mobile app, and that doesn’t include our affiliate network and other owned websites! In February 2020, our website was only reaching 12,000 unique monthly visitors and our revenue was 10x lower than today. That’s what made people think that Hardbacon was an overnight success.
On Demand: Fintech Fridays EP51: Bacon and Eggs with Julien Brault, CEO, Hard Bacon
In fact, nothing could be further from the truth! We tested one-thousand-and-one business models, price structures, and market segments! Most of our hypotheses were rejected by the market up until we embraced our current business model back in 2020. It is the affiliate marketing model.
Realistically, it means that we help our clients, who for the most part are financial institutions, acquire customers. On the other hand, contrary to traditional media which sells ads, we invoice based on results, which might be a credit card application, an account opening, or a sign up. If you’ve ever used our credit cards comparison tool and found a card you liked, chances are that we earned a bit of money!
If you want to know more about our business model and the terms of our current round, I invite you to visit our FrontFundr page.
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 |
