NCFA Canada | Aug 31, 2018

FINTECH FRIDAY$ (EP7-Aug 31):  How to Structure an ICO and the Mind of a Fintech-preneur

About this episode: This week our host Manseeb Khan sits down with Gary Schwartz the Managing Director of Pegasus Fintech Inc.. They covered how to structure an ICO, to surgary donuts , and impacting investing. Enjoy!

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: Gary Schwartz, Managing Director, Pegasus Fintech Inc.

Over the past 20 years, Gary has played a leadership role in the high-tech industry founding, investing and managing a number of companies in the health, marketing, social media, automotive and financial sectors.  He is a six-time recipient of the Deloitte Fast 50 Award and was recognized as the "2013 Mobile Commerce Evangelist of the Year" and "2014 US Retail Innovator of the Year."  Gary is a Simon & Schuster NYC author with titles that include "THE IMPULSE ECONOMY," "FAST SHOPPER, SLOW STORE" and is presently writing a book on the AI called "IF THINGS COULD SPEAK."  He is president of the Canadian Lenders Association and Managing Director of Pegasus Fintech. Gary is alumnus of Columbia University in New York and the Stanford University Center in Yokohama, where he was the recipient of the Asia and Japan Foundation Fellowships.

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Transcription of Interview

Manseeb Khan: Hey everybody Manseeb Khan here and you are tuning into the Fintech FRIDAY podcast today I have an incredible guest. You may have heard of them before I got from Pegasus fintech. If you haven't seen any news blog post on Medium or if you haven't seen any of his stuff on LinkedIn, you are truly missing out It's an absolute goldmine of information.  Gary thank you so much for making it here.

Gary Schwartz: Thanks for having me I appreciate you inviting me on.

Manseeb Khan: No absolutely. So, I guess for the audience could you just give a minute of who you are, and a little bit of what Pegasus is?

Gary Schwartz: Sure. So, I'm you know I'm a fin-tech guy. I've been in space for 25 years as an entrepreneur. Right. So, I've started a number of companies in the space everything from obviously fin-tech through to health-tech, Mar-tech, ad-tech, social-tech etc. You know starting them as baby upstarts in the garage and taking them through to exit.  So that's what I do. And its sort of a natural progression that the block chain space is hugely attractive for an entrepreneur because it facilitates the growth of the business in a very aggressive fashion. And a Pegasus was conceived of about a year back with a bunch of folks with different skill sets that go together to accelerate incredible use cases on a block chain. And we will bring different skill sets the table our CEO headed up blockchain for Accenture in the valley. She did all the due diligence on Ripple, she comes with a wealth of information and insights into you know framework and governance and other team members you know focus on structure and compliance. And you know I'm the soapbox guy works on strategy and positioning and we've got amazing team and we work with companies all around the world in accelerating the use case and driving their capital formation goals.

Manseeb Khan: That's incredible. Could you. So, speaking of Ripple could you I guess deep dive a little bit and talk about the difference between a crypto investor compared to the regular traditional street investor?

Gary Schwartz: I think that's what really, we're all grappling with right now is you know the crypto community is evangelist community they're very different from what we would treat up as the incumbent investor. They serve the anti-investor right. So, you look at them as sort of a little bit libertarian you know wild west posse guys that at least out of the gates in the 90s that that was birthing ground up of you know what we now know as a block chain. It was very much of zip drive and shotgun under the pillow. You know very anti-establishment which is fantastic right, because that's the root of what we know as a block chain and that the first currencies that came out like Bitcoin,

Gary Schwartz: right? But when you're an incumbent investor you look at and it is incredibly scary right. There’s not the structure that you expect of as a traditional mainstream investor. At Pegasus look at this. You know we talk about you know we have this analogy where we talk about there's a mountain right in it and it's sitting right smack in the middle of this marketplace. On one side of the marketplace you get these crypto bugs on the other side the marketplace you get your incumbent investors in street and they really can't see each other and they just they look across and on one side they think of you know incumbent investors look across and go. Oh, it's a wild west I don't want to touch it. And then the crypto investors look across the street and think of them you know think of the street as dinosaurs. Right our job is to tunnel a hole between these two sides. Really when you think about it the crypto community know that they need more structure. They know that they need things that the Street has nailed the street wants to you know take advantage of this new marketplace with this fluidity the opportunities that are obviously in this new more fluid marketplace.

Gary Schwartz: So, the whole goal is to really get the vernacular consistent across both sides and get the things in place. So that you know what the crypto community self-policed now becomes more what the street sees as compliance and so that whole structure and nomenclature around compliance you know for the street to know that there is they are investing in something that's the security that they're holding provisions. that that people aren't taking their, you know cash out early and leaving the other investors you know holding the bag. The early days of folk taking their money and buying Lambo's I think is gone. The two sides are meeting. What I find so interesting about community is libertarian the crypto community is very much what I refer to as a ME and WE marketplace. So, they like the street they care about making profit. They care about you know doing well with their investments. And so that's the ME. You know what's in it for me. But isn't there it much. I think a huge group of individuals that care about the we. What does this mean to the global economy? What does this mean to the future of the marketplaces?

What does this mean to the environment? What is this an impact investment, or do you think of this as my analogy is sort of like you know it's a sugary doughnut right. So, you have sugar on one side you know the me, you want the sugar on the other side. But there's a big hole in middle and the hole in the middle is great because these guys don't want the middle. They don't want government banks, multinationals. they want that minimize. Now that that story is great and if it's optimized it creates huge opportunities for incumbent investors to come in and appeal to me. create a me scenarios that they know how to do. You know how to take advantage? How to drive liquidity and a website? What are the models for the new economy? models that will really not just make the middle fatter but actually get to the end constituents the people that really need their cash to drive their businesses, to drive their services. So, it's huge. Advantages to this new economy and we just have to make sure that the incumbents street you know sees how they can play safely.

Manseeb Khan: I absolutely agree with you. I think it should be interesting to see how regulation and institutions come in and build that bridge between crypto investors and Street investors.

Gary Schwartz: the boat slipped the harbor it's not just S.E.C. throwing out subpoenas. it's guys proactively understanding that they need to work within the structures that are out there. so, you know security is a security is a security. Yes, a utility token is not a security, but it still needs to be on a compliant exchange. It needs to drive liquidity and therefore needs to be on the exchange which can manage that to the highest possible standards the marketplace.

Manseeb Khan: I know that you focus on market use cases right. So, what is a key use case for most ICOs that you're seeing?

Gary Schwartz: Yes, you know there's such exciting stories out there of companies that are trying to solve. Using the blocking and we read about them every day. for me I want to get back to you know fundamentals. One of my partners says there's no fun in fundamentals but I personally think that fundamentals are the most fun because people understand them. They will invest in them. So, for me the block chain the biggest use case the block chain is capital formation and as you guys you know as national crowdfunding and FinTech association, you understand the need you know how hard, it is to drive you know capital engagement marketplace. how to create that market that you can get investors to come in and support your ideas like go back to Bill Clinton's campaign. You know I remember James Carville you know who his campaign strategist was.  He coined the expression which was “the economy stupid”. that was getting back to fundamentals. Dude it's about the economy. I like to sometimes just turn off the hype on the block chain and say what the block chain does fundamentally is allows for crowd sales structure globally sort of structure allows for capital formation. That is the underpinning of most businesses that are out there and that's what they need to establish as a bulkhead no matter what. There is no specific dynamic you use cases on the block chain an ICO is about driving engagement around the investor community and around participants.

And why is that so exciting. You guys get this at the NCFA is that a crowd sale or you know reaching what we call a democratized audience has two goals right. One is you're going out to a global community and say invest in me. Right. Here's the value proposition. Here's my white paper. Here's my OM. Here's my you know almost prospectus style document and I want you to invest in me. At the same time because you not going to 100 people to give you a million bucks. You're going to a million people to give you a hundred bucks. You're building a loyalty network of folks that believe in your solution and will use your solutions. The whole crowd sale process and the capital formation process is also a way of evangelizing your solution to the marketplace and creating a network effect and ultimately the investor piece. And you know loyalty to your specific solution and new technology is like the Met cafe network effect right. The more people you get in the more successful you're going to be. And that's why we at Pegasus we like B2B to B2C models because it's exponential growth right you're going from a business to another business that has a community of interest and they are amplifying your use case. So, we love that network effect because it drives investment and it drives and loyal supporters of your solution.

Manseeb Khan: The fundamentals are really like that because there is a lot of hype behind Crypto and there's a lot of hype behind any ICO that you're seeing that up and coming and it's like OK well what does it actually do. how is this going to be an integral part of the block chain.

Gary Schwartz: more fundamentally how is this make money. Exactly. Absolutely right. Explain to me how I am going to get a security token a return and a utility token how is it going to drive scarcity and value in the market explain to me from a fundamentals perspective what is the team? What is the solution? How are you going to make money? who are the initial investors and how is this going to drive democratized flood of investors to the table? What's your long-term strategy? At the end of the day a company that is not going to make it raising capital through traditional means is probably not going to make it on the block chain. block chain not a place you can hide. It's just a way of accelerating a good business use case and that's exciting.

Manseeb Khan: Yes. No, I absolutely agree with you I think because of block chain and everybody's kind of getting exposed is a lot of light being shed and there's slim to none that you can really hide when it comes to starting a crypto, starting a block chain company. Could you talk about regulation and could this be the answer for instability and unpredictability?

Gary Schwartz: When we started Pegasus think a lot of people sort of looked at us the cross-eyed and said What the hell are you doing. I mean the whole beauty of the block chain is there's no regulation. What are you doing talking about regulation? what are you talking doing talking about compliance? And we stayed the course and really 2018, 2019 what we evangelize is become common practice you know an ICO is a new asset class in the marketplace. it's different as it is not unlike a stock you don't have an equity position. It's more like an investment in future success of the company right. But we know whether it be a security token. Looking at the value of that token it's a utility token you're looking for potentially scarcity as a play and demand that utility that will drive up the value. but ultimately the asset cost must be treated. in a way that will drive confidence in the marketplace. If it's a security or treated a security if it's an it's utility you still must treat it as a compliant play. And so, regulation is not only a good idea. It's a central component to the ecosystem. that oversight is there to protect all players. Right. And regulation. Yes, it does potentially slow down certain components of the process, but it also speeds up liquidity and it allows you know feel confident in what they do because there have been bad actors right there. There's no doubt. And so how do you navigate this marketplace?

Gary Schwartz: How do you know that you're swimming in a pond that is that you can feel confident? that the company and the stakeholders are a you know a kosher and that you're not going to get screwed. That's the regulation is important and it's one of our pillars, right? The key is balance because that's So to foster the libertarian values, the block chain you want to drive that fluidity. But you know a little bit of KYC upfront. a little AML making sure that you're on the right exchange. Make sure that you've done the right due diligence on the team that they passed they perps. All these things are fundamentals. These are fundamentals and running a company and the block chain doesn't change that.

Manseeb Khan: I absolutely agree with you the touch a little bit on liquidity right is it crucial for crypto investors to consider liquidity?

Gary Schwartz: Oh yes, I mean you know at the end of the day especially if you're holding a security look how do you make money right. You buy something, you hope that it has increased the value. you hope you get some yield on it some dividend. You hope that whatever you buy grows in value. you believe the business you believe in the marketplace but that value you know even if you have a hard luck mentality and you want to hold that as a crypto gold at some point you've got to pay your bills. at some point.

You want to cash out at some point you want to say look I made you know 200 percent, maybe 300 percent or a thousand percent on my investment. I want to cash out so liquidity with the structure that facilitates. liquidity is essential to consider and essential to offer your community. And so, when you run a nice ICO, you have to put it on an exchange which allows for that liquidity and so there are tons of compliant exchanges that are coming on line. that we work with very closely is the GBX the Gibraltar block chain exchange. which is a utility exchange it's a peer to peer exchange. which is a compliant exchange and we one of the sponsors to that exchange. So, we use that exchange as a marketplace for a number of our ICOs. We do the due diligence, we position them and we on board them onto the exchange because that exchange now allows for that token to trade, to grow in value for the investor or the participant in the situation. to have some sort of approach to value and to exit that value. into other investments or interfere. The World Goes Around everybody's happy right.

Manseeb Khan: No, I totally agree with it. How can I make money right? If I'm going to invest in a coin and I can pull out.

Gary Schwartz: Yeah, I mean to ultimately again as Bill Clinton quote it's about the economy stupid right. It's about how do I get my money right. My money's valuable.

Manseeb Khan: Exactly right. Tell me a little about, some of the ICO's that you're watching and some of the technologies that you are kind of keeping your eye on.

Gary Schwartz: I'm sure you stay all day and talk about all the different ones that I find interesting, but I'll tell mention maybe a few that are from different verticals that I'm excited about with we are participating in as an accelerator. is one technological cabin network cabin spelled K A B N, KABN.network a very exciting play.  For me sometimes you know the gold rush you have to look at the picks and shovels and the KABN is a great play because it is again a fundamental technology .it allows in a very innovative way in the market to grow to accelerate compliance by facilitating KYC AML. So what it does is it allows participants token sale to come in to go through the compliance checks to verify their documentation in an active way , in a bank grade way.  Not only do that only do what's so they hold the registry on the block chain which allows hundreds of thousands if not millions of Accredited Investors to come in do a check and then all ICO has to do is go in and ping the registry and they are either compliant or not. So instead of a lot of the solutions out there focus on doing a sovereign identity check of the consumer. We do it once and put it in a registry so that again you can come back time and time again. And it allows for and facilitates the speed that we need in this marketplace. So that’s a great technology because it's facilitating business as usual in the block chain space. There's another company that is Europe that other working on which is called GEON, geon.network which is a location-based marketing solution. Basically, it allows brands and retailers to mint and mined coins to drive their brand objectives. so, to drive people into their store, to reward people based on being in a certain place and for that again business as usual. we've been using location as a way of driving value for brands for a long time. But there's no way of doing it with a block chain layer. So, these guys allow brands to participate in a block chain to mint and mine their own coins and to reward their customers using a blockchain currency.

There is another company called mortgage blox, B l o x which is again this is such a fundamental business. hey, we will raise capital to invest in real estate. Well here's a 200-million-dollar pool, that is has me tokenize. so instead of going to one or two or 100 investors. you can go to thousands of Accredited Investors and pool those funds. So again, a fantastic use of capital formation. a company which is a spinoff from a hard fork of a ripple called Yaka labs and we're doing a lot of consulting with them in the valley. Another great use case because what they are trying to do is use the ripple backend to create a new coin and you transactional economy for certain global marketplaces. I mean there's so many fun and powerful use cases again you know as an investor and as an accelerator. we look for great teams we look for are really good business plans that we can see how they can generate revenue. how they can scale? how they're going to use network to scale and we know that with those fundamentals and with the compliance that we throw into these deals. we can help them reach the marketplace and hit their capital formation goals. So you know maybe one thing I'll mention because it's come up recently is people think that a lot of use cases out there are frivolous and some of them have had a lot of attention over the last few months sort of waned in participation and a lot of people are sort of nay saying the block chain and I refer to one because it was just put up this week which is crypto kitties basically this collectible game where people collected literally Kitty's.  They used ERC 721 which is basically an Ethereum coin which has certain attributes to allow it to be a collectible, but you know maybe people lost interest in collecting kitties. But the whole idea of digital collectibles is a phenomenal use case. Oh my gosh. You know the Pokémon and on steroids. the opportunity for sports and for music to use this as a new currency to engage with the fans is phenomenal. When you look at something like crypto kitties you don't want to look myopically these things in the actual content use case may have failed but the underpinnings of the technology. the underpinnings of what it can do globally to drive engagement and to make money for Marketplaces that had a hard time raising money on their base. like music, sports need to accelerate the way that it drives mech because cannibalized by fraudulent merchant you can't control that. suddenly these immutable structures like ERC 721 there going to change the way business works substantially. so, I'm hugely excited and so many use cases are out there right now.

Manseeb Khan: I love it. I think the GEON one's very interesting the location-based marketing is very interesting it’s that in Toronto probably is not going to work in San Francisco because San Francisco has a sort of culture of what have you compared to Toronto so that I like that one.

Gary Schwartz People don't change the way run businesses, the way we see value doesn't change the mechanisms for allowing us to make money on that. The structures change my background is more about technology, so I made a lot of money on SMS estimates gave birth to ringtones as a content phenomenon ringtone if you remember them were just a little smidgen of a song.  I mean it was it was ridiculous. Songs were to be downloaded for free on Napster, but you had a pay 5 bucks for a few seconds of a cannibalized version of a course Why. Because they were a business model, around the a closed network which was telecom provider and the OEM the handset will because their business model.  There were billions of dollars of wealth created around the world. well the blockades the same, block chain is another mechanism to create value and create a new distribution mechanism around that. So, if you can create a mutable asset, asset class like ERC 721 you can really exploit that and make you know copious amounts .value in that new model but it's the same business it's the same. at the end of the day we're still humans. we have the same motivations.

Manseeb Khan: I absolutely agree with you. It's like Pokémon way back when and then when Pokémon go came back the exact same thing Could you tell the audience a little bit more about block chain what should we focus on?

Gary Schwartz: One of the big things that people chat about is that the technology will not scale that sort of like you know a one to one panel that every single blocking conference that I go onto. You know it's not scalable.

Gary Schwartz: You know look at Ethereum and look at Bitcoin. Bitcoin 10 transactions a second, Ethereum 25 transactions a second and then everybody turns around and looks at VISA these and says oh well they have a peak transaction rate of 65000 transactions per second. You know we'll never get it. And I've always said you know this is the Internet back in the late 90's your dial up modems and you have these primitive browsers and you have to try and explain it to your mother and she didn't know what the hell you were talking about Nothing new. This is just another wave of technology, which we all know is accelerating much faster than internet.

You know I like to look at you know the advances that we've made even in the last year like your proof of work networks like block chain like Ethereum through there hashing process. It's how they achieve the desired difficulty, through the random number hashing it is a very slow process. And we know that’s not optimal, you know sustainable in network model, but you have new chains like Solana that work fundamentally differently they work by starting with a random hash value and then hashing from the prior hash value which basically makes it much faster to get to consensus right. Guys like that say at least that they can you know do upwards of you know 700,000 transactions per second. You know that's phenomenal. And if they can do that and then they put Visa and MasterCard networks to shame. Right. So, the technology will scale.  And because we have so many smart people that are focused on making this work. because it's a trust-less economy because it's open and it's an open source economy. You have so many people incentivized to make it better and work to make it better. I think that's a crucial piece. You know to throw out there to the audience.  I mean what else to say. I mean we all know that that a lot of people think bitcoin is block chain, but we know that that not the case that block chain is powering bitcoin and fundamentally block chain is an enabler for so many other technologies  But you know ultimately a distributed ledger technology has so much power in solutioning and we've talked about some of the solutions earlier. Scales for me I think is the big one to nail because those are where all the naysayers go whenever they talk about the block chain.

Manseeb Khan: A lot of people may have heard of it in the news. I know I've seen a couple articles here and there Could you talk a little bit more of what impact investors are. And I guess a little bit why it's important to you?

Gary Schwartz: impact investment that's a little bit like me and we thing. it's more the we like. What are we doing here? What are the businesses we're creating?

Gary Schwartz: How is it having impact on our world. How is it having impact on to better our economy to drive sustainability to drive. You know empowerment for women and all those things. Those are crucial, and I think very passionate goals of a lot of people in the block chain give me some examples of how this is going down, but I was born in Africa. I was born in a small country called Zambia. And if you look at those economies and you look at Africa I mean they there is so much graft, there is so much corruption. Money doesn't get where it needs to go and even if it gets there the process is also cumbersome. And there's no transparency, there is no efficiency in a lot of the solution in the block chain really can make a difference it can it can help. And this is not just Africa, but it can help with you know security and transparency and voting. You know which a big thing is obviously globally. Voting fraud and optimizing that process Accessing ownership of data, medical data. how do you in a lot of these places. There's no I.D. So how do you identify somebody. How do you create some sovereign wallet which with? which can hold their personal information, so that they can get information, can be connected to them in a more efficient way. Obviously, land is a big thing in Africa. So, the reliability, reliable secure you know a land registry are essential. And then you know the whole idea of managing money.

Your audience knows about M-Pesa and other payments. But in Africa you can use your phone to transfer money through SMS is called M-Pesa. And again, a primitive solution that is solved so many problems for the continent. Well those a digital wallet using and M-Pesa. Now can it can be a distributed ledger. So that not only are you using your phone to move money, but you're moving money which is tokenized. which can be controlled in such a way that it doesn't end up as graft it gets directly to a farmer. The farmer uses that. that it doesn't get affected by the vicissitudes of the local currency. This is exciting stuff and it empowers women because it gets to farmers which are much part of you know women in market place that's just an example from Africa. But this is happening all over the world. We're optimizing urban cities, we're creating solutioning around and micro loans. A guy I know in Berkeley in the U.S. is trying to put together a solution to solve for solutioning around a municipalities in Berkeley. looking at bonds optimizing process you see taking out the guns the existing solution and getting more money to the end recipient. So, to all these that this stuff is part of this new economy. The distributed ledgers allow for optimization of certain business processes and transparency. And so, it's a brave new world it's very exciting.

So, imagine using remittance services to send money from one country to another. you have to go to a money market. You have to pay a service fee. first, you must take a time of your day to go somewhere. Physically you must send money with the fee. It takes a long time to get to the end. The other person must go to the next town potentially to pick it up. They pay there's their exchange rates. It's an it's a mess.so this time and there's capital impact. well if you using the you know the block chain as a remittance service. That huge efficiencies because It's instantaneous. There are fewer hands in between two to take fees and you don't have the same issues with the arbitrage on currencies and so you don't get dinged on the FX. So those exciting things that we all know need to change and are changing as we speak.

Manseeb Khan: I absolutely agree with it. So, to wrap this up Gary could you give us some tips on an ICO structure.

Gary Schwartz: No absolutely. I mean that's sort of I guess that's a really good way of summing up because really you know all of this comes down to running a good initial coin offering. We talked about a lot of those elements compliance make sure the team your team, it's a good business model. It's a good block chain use case. There's a market for that use case that that you put it you structured in such a way that there's liquidity for investors. All those things are key. But we maybe one of the things I'll leave you with then is to talk about. difference maybe between what I would run as a startup and how the block chain and for me. When I run startups the last 20 years I never really care too much about the advisor. A quick cohort around me it was all about my core team. But with a block chain thing are different and this is one thing that strikes me is when somebody at least when you're a Crypto investor and investing in an ICO. You know they may read the white paper they'll probably actually just read summary, but they look for certain shorthand due diligence when they when they are looking at an ICO.

And one of the things that they look at and they there's a lot of scrutiny on is the advisers that you have in your ICO. And it's interesting for me because yes, it's important to have advisers is no doubt and to have you know good people around you in any business no doubt. But for some reason in the ICO world because this is a global economy. People are moving very fast on decisioning they are looking at who's in it now. who is advancing things initially you would look at early investors in ICO that would be then advisers to the ICO as a shorthand way of seeing a credible and investing with them. But now you know I think there's a bit of maturity now. You're looking for advisers who explain your business that they come from the vertical that you pushing into. and that that's all good. But it is important to build, narrative around those advisers. so that when somebody comes to your ICO and they and they are paging down and they see the description of the business and they see that is they read.

Again, the probably the summary the white paper and they go through things and they get to the advisers. It needs to tell a story and it needs to tell a story that it really screams credibility. It shows that that you have stakeholders in there that not just stakeholders that have invested in you but that are known in the investor community it can be which is obviously very important. But also, people who understand your business and having them attached to your business really speaks to the credibility of your business. So, for example if you have a location-based marketing know arena. you'd want to have people in there that really can talk to and brand engagement. If you're in the payments base in the identity space like KABN you want to make sure that you have people in there have a background in identity in record management, in payments from the incumbent world that speak to the fact that that you nailed this. that's probably one thing that I think we all know it's important. But I think it's probably one of the most important things in fashioning your narrative to the marketplace.

Gary Schwartz: we could speak for hours but this kind of cool and we touched on some fun things and hopefully you'll invite me back and we can take a deep dive into some other areas.

Manseeb Khan: Oh no I can't wait. I'm so excited for that they are a sponge. I want to learn as much as I can. ` from amazing people like an industry. So, Gary thank you so much for sitting down with me today.

Manseeb Khan: This has been an amazing time. I learn tons I'm pretty sure the audience has learned a lot. And thank you so much for dropping by. And I can't wait to have you again.

Gary Schwartz:  Yeah. If I could just end up just if anybody wants to reach us and find out more information just go to Pegasusfintech.com. So that's one-word Pegasus as in the flying horse and fin tech dot com. look forward to being heard from anybody if you want to directly reach me it's gary.schwartz@pegasusfintech.com

Manseeb Khan: So, on the behalf of the NCFA Canada's leading crowdfunding fintech association we wish you an amazing fintech Friday and weekend.

End of Podcast

Interested in getting involved as a partner or participant? info@ncfacanada.org

The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with fintech, alternative finance, blockchain, cryptocurrency, crowdfunding and online investing stakeholders globally. NCFA Canada provides education, research, industry stewardship, services, and networking opportunities to thousands of members and subscribers and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: ncfacanada.org

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Why MSCI Is Removing Strategy From Its Indexes

November 12, 2026

November 12, 2026 | NCFA Fintech Market Insight | Digital Assets Blockchain And Tokenization, Capital Markets Infrastructure And Funding, Wealthtech Investing And Trading Strategy still runs a software business, but Bitcoin now dominates its assets and capital raising. MSCI no longer treats that balance as an index eligible operating company. November 11, 2026, MSCI confirmed Strategy’s removal from the MSCI USA and MSCI World indexes after the November 30 close under its new methodology for non operating companies. MSCI is one of the world’s largest index providers, and its benchmarks are followed by funds investing across global equity markets. Japan’s Metaplanet is also being removed from an MSCI index. MSCI has decided that Strategy no longer qualifies for its equity indexes because Bitcoin now dominates its assets and much of its capital raising. Strategy still sells software and reports operating revenue, but MSCI is drawing a line between a business that holds investment assets and one where those assets have become the main financial story. Why Is MSCI Removing Strategy From Its Indexes? MSCI first looked at a rule aimed specifically at digital asset treasury companies. It later dropped that proposal and change it's methodology to cover companies whose finances ...

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How Is Crypto Market Cap Calculated? What a Change in the Top Coins Really Tells You

November 12, 2026

Nov 12, 2026 Crypto market cap is calculated by multiplying an asset's reference price by its circulating supply. A token priced at $2 with 50 million units circulating has a market cap of $100 million. The calculation estimates the value of that supply at the reference price; it does not total the money investors deposited. To understand a change in the ranking, examine both inputs and the provider's definitions. A larger number can result from price changes, supply changes, or revised reporting. Establish what the two inputs represent The arithmetic is simple, but neither input is self-explanatory. “Price” may be a reference assembled from selected trading pairs and venues, rather than the last transaction on the exchange you use. A provider may exclude observations or convert quote currencies. Two services can publish different estimates because their source selection and methods differ. Circulating supply is an estimate of units treated as available in the market under a provider's rules. It may differ from the number minted, the total recorded by a contract, or the maximum permitted under a protocol's current design. Locked balances, treasury allocations, burns, and scheduled releases require interpretation. A transparent methodology matters because identical arithmetic can still use ...

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What Happens When AI Agents Start Trading Together?

November 12, 2026

November 11, 2026 | NCFA Fintech Market Insight | Artificial Intelligence And Data, Capital Markets Infrastructure And Funding, Risk Compliance And Regtech Financial firms are putting AI agents into production well before giving them broad financial authority. That creates time to set identity, permissions and transaction controls before autonomous execution becomes common. On November 11, 2026, Bank of England Financial Policy Committee external member Jonathan Hall used his final FPC speech to examine what happens when AI agents get more authority inside financial firms. A Bank of England and FCA survey of 196 firms found that 80% already deploy AI agents and another 14% plan to within 12 months. Only 2% reported agents with broad autonomy, and none of those were in trading and payments. Finance is adopting agents quickly, but firms are still keeping people and hard limits around the decisions that can change money, positions or customer outcomes. AI Agents Are In Finance But They Are Not Trading Alone The 2026 Bank of England and FCA survey separates four levels of authority: Decision support lets an agent recommend an action while a person decides and executes it. Constrained execution lets the agent act inside preset rules. Conditional autonomy ...

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Canada’s VC Totals Are Reliant On Mega Deals

November 11, 2026

November 10, 2026 | NCFA Fintech Market Insight | Capital Markets Infrastructure And Funding, Entrepreneurs Startups Small Businesses, Equity Crowdfunding And Alternative Funding A small group of large rounds is carrying Canadian venture totals while deal count and growth stage financing remain well below recent norms. On November 10, 2026, the Canadian Venture Capital and Private Equity Association published its Q3 2026 venture capital report. Canadian companies raised $4.3 billion across 397 deals through September, only 1% less capital than a year earlier. But 23 rounds of $50 million or more represented just 6% of disclosed deals and absorbed 58% of all venture capital invested. Deal count has also fallen every year since 2021. The national total is holding up far better than the number of companies getting financed. Six Big Rounds Carried 59% Of Q3 Venture Capital Q3 produced $1.35 billion across 129 deals. Capital was 1% higher than Q2, but deal count fell 15%. Six rounds above $50 million accounted for $793 million, or 59% of the quarter’s capital. That's a decent quarter for the companies that closed those rounds, but a weak quarter for everyone else. Mega rounds above $50 million totalled $2.5 billion across 23 transactions ...

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Why Canada Is Making It Cheaper to Leave Your Bank

November 11, 2026

November 11, 2026 | NCFA Story Intelligence | Competition And Market Structure, Wealthtech Investing And Trading, Regulation And Policy Canada is cutting bank fees and switching barriers after years of weak competition, high concentration and poor productivity. On November 7, 2026, the federal government proposed something Canadian investors have complained about for years. Banks would no longer be allowed to charge most investment account transfer fees, which typically cost about $150 per account. Ottawa also wants clearer transfer information and tighter timelines for moving investments to another financial institution. The fee matters because leaving can already be slow and frustrating. Receiving firms often reimburse the outgoing charge to win the account. That means a fee collected by the institution losing the customer can become part of the acquisition cost for the institution trying to win that customer. Canada's six largest banks hold roughly 93% of banking assets. The Competition Bureau was warning about barriers facing fintech competitors in 2017. Ottawa began reviewing open banking in 2018. A federal advisory committee later recommended an operating system by January 2023 and warned that government should not delay. January 2023 came and went. Real Time Rail also slipped years beyond its first expected ...

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CSA Tokenization Report Shows Where Canada May Scale First

November 11, 2026

November 10, 2026 | NCFA Fintech Market Insight | Digital Assets Blockchain And Tokenization, Capital Markets Infrastructure And Funding, Regulation And Policy Funds, Collateral And Settlement Lead Canada’s Near Term Tokenization Opportunity On November 10, 2026, the Canadian Securities Administrators published its Project Tokenization Phase 1 findings, setting out where Canadian market participants see the strongest commercial opportunities for tokenization and what regulators plan to test next. The report draws on 233 organizations, 21 bilateral meetings and 80 survey responses, along with workshops attended by 281 people in Calgary and 491 in Toronto. Participants put investment funds, private assets, collateral, treasury and settlement infrastructure ahead of public stocks as the strongest near term opportunities. The report also cuts through one of tokenization’s biggest sales pitches. Blockchain can change how an asset is recorded, transferred or settled, but it doesn't automatically create liquidity, investor demand, broader eligibility or stronger ownership rights. Those outcomes still depend on the product, market, legal structure and infrastructure around it. The CSA now plans to take specific projects into Phase 2 through a 120 day public call for proposals. Firms may be able to use existing regulatory processes, tailored regulatory treatment or bounded testing in a ...

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Creative Ways to Boost Team Morale

November 11, 2026

Nov 11, 2026 A positive work environment is key for any team that wants to succeed. Team morale is crucial for productivity, motivation, and job satisfaction. Engaging in activities that lift spirits and strengthen connections can lead to great results. Creating a positive team environment requires creativity, engagement, and some fun. Each activity can strengthen connections, boost motivation, and improve workplace dynamics. When teams focus on strategies to boost morale, they work toward shared success. These activities can lead to lasting memories and help build a stronger team culture. Here are some fun strategies to help improve your team's morale and make the workplace livelier. Fun at the Arcade Visiting an arcade spot is a great way to enjoy time together and build teamwork. Imagine your team facing challenges with various games. Whether it's racing or playing team games, the arcade encourages friendly competition and bonding. These fun experiences can help reduce stress and improve relationships among coworkers. Arcades offer many options to suit diverse interests and skill levels. The lively atmosphere invites everyone to relax and take a break from their daily tasks. Shared laughter and enjoyment can lead to better communication and teamwork when you return to the ...

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Webull Adds Free Data as Canadian Brokers Compete Beyond Fees

November 10, 2026

November 10, 2026 | Market Activity | Fundraising, Investing, Trading, Leadership, Competition, Human Capital, Health A Brokerage Race Beyond $0 Commissions On November 10, 2026, Webull Canada added Nasdaq Basic Canada, giving clients free real time Level 1 quote and trade data across Canadian listed equities. The feed provides best bid, best offer and last sale information for stocks listed on the TSX, TSX Venture, CSE and Cboe Canada. Nasdaq says its consolidated feed can reduce Level 1 market data costs by more than 60% compared with traditional Canadian data packages. Webull isn't first to give Canadian investors free real time information. The more interesting story is how quickly another paid feature is becoming part of the basic brokerage account. Wealthsimple helped normalize $0 trading in 2019, Questrade followed in 2025 and Webull dropped its own commissions in April 2026. With the headline trading fee largely gone, brokers now need other reasons for investors to move money and keep it on the platform. Who Led Canada’s Race To $0 Trading And Free Market Data Wealthsimple Trade launched nationally on March 13, 2019 with $0 commissions on Canadian and U.S. stocks and ETFs. Questrade removed commissions on listed stocks and ETFs ...

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BBVA Deploys Canadian AI for Derivatives Pricing

November 10, 2026

November 10, 2026 | Market Activity | Artificial Intelligence And Data, Capital Markets Infrastructure And Funding A Toronto Fintech Riskfuel Analytics Brings AI Pricing Into BBVA’s Global Markets Workflow On November 10, 2026, BBVA deployed Riskfuel Analytics' neural pricing technology inside the pre-trade structuring workflow for autocallable products on its ePricer platform. Riskfuel is a Toronto fintech founded in 2019 that builds AI models for derivatives pricing. BBVA is a global bank with a large corporate and investment banking business. The deployment puts Canadian built AI directly into the calculations used to design complex structured products at a major global bank. Riskfuel's model is trained on BBVA's own pricing engine and uses more than 4,000 market and product inputs. The company says the surrogate was tested against more than 100,000 trades and can evaluate thousands of candidate structures in under a minute. BBVA had already added AI generated investment ideas to ePricer in September. Riskfuel goes further into the workflow by speeding up the numerical pricing work while BBVA's own model remains the reference. How Riskfuel Speeds Up BBVA's Autocallable Pricing Autocallables can depend on volatility, interest rates, dividends, maturity, coupon levels and several barrier conditions. Autocallables are structured investments ...

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