NCFAs innovation and funding ecosystem

Category Archives: Venture funding Best Practices

The Real Story of Access to Capital

SEC | Martha Miller | Oct 13, 2021

Martha Miller - The Real Story of Access to CapitalIf you’re taking in news by simply scanning the headlines—particularly those about capital raising activity—you’ve likely missed the story for some splashy titles. Today I’d like to delve into the story and facts behind the headlines about how entrepreneurs are raising capital from investors, deconstructing some of the big numbers we see in large print.

“Entrepreneurs Should Quit Their Day Jobs; Paychecks are Irrelevant”

Many assume that unless an entrepreneur is focused on their startup 100%, they’re not truly dedicated. The reality for most entrepreneurs is that sticking with their day job before their side hustle has been de-risked is not only a smart financial decision, but often a necessary one. Our Office regularly hears from minority and women entrepreneurs who talk about building their companies while maintaining a stable income stream to support their families, pay off student debt, and avoid taking on too much dilutive capital too early. Their decision is a smart one. Entrepreneurs who keep their day jobs while building their businesses are 1/3 less likely to fail than those who quit and go all in from the beginning. Wharton Professor and author Adam Grant attributes this phenomenon to building a balanced risk portfolio, with the stability of the full-time job affording entrepreneurs the freedom to be more creative in their side hustle.

See:  Culture and Diversity Leadership: Tale of Two Doors

“Who Needs Diversity? The Market Will Intuit Solutions for All”

It is also easy to buy into the narrative that if there is an unmet need among customers, the “market” will recognize that gap and deliver a solution. The reality is that problem-solvers only set out to solve the problems that they personally understand. Put another way: I can appreciate the challenges that you face, but I cannot fully understand or know them—much less solve them—unless I live them.

This is often the story with underrepresented entrepreneurs who see a need that majority entrepreneurs and investors have not experienced. For fans of Guy Raz’s How I Built This, you may be familiar with the story of Tristan Walker’s company Bevel.  As a black man, Tristan battled embarrassing razor bumps from shaving. After surveying the market, he discovered that many men of color with coarse or curly hair shared the same struggle, which could be solved with a single-blade razor system. He began pitching a direct-to-consumer solution to investors, only to be repeatedly dismissed with “if this were really a problem, the incumbent players would have addressed it.” After a disheartening number of rejections, he finally secured funding, ultimately building a wildly successful brand that subsequently sold to Proctor & Gamble, making Tristan the first black CEO of a P&G subsidiary. His story demonstrates the importance of people who live the problem developing the solution.

While many sophisticated investors recognize the perils of pattern-matching, it is critical that we empower diverse investment decision-makers who can support solutions to problems that they too face.

“If You’re Not First, You’re Last”

See:  Why Older Entrepreneurs Have the Edge

If I were to poll the audience on who has the best competitive advantage: first movers into a new product category, or follow-on market entrants, most of you would probably assume the early bird gets the worm, corners the market, and dominates. The headlines you see likely have skewed this perception. However, when measuring across hundreds of product categories, a classic study found that first movers are 6x more likely to fail—a 47% failure rate—than second movers—an only 8% failure rate.

For those scratching your heads and wondering “yes, but I bet the first movers who do survive capture greater market share,” wrong again. Even for the first movers who survive, they capture on average only 10% of the market share for their category. The second movers capture 28%, almost 3x as much.

We need first movers, and plenty of second movers, to drive innovation forward.

To build successful companies, startups need savvy investors who bring industry experience, customer connections, and strategic guidance for the companies to scale and thrive. However, the accessibility of professional angels and venture capitalists are outside of many entrepreneurs’ personal and geographic networks, which can dramatically impact survival versus failure prospects.

Read:  Penrose Report: Power to the People: Stronger Consumer Choice and Competition

Investing in the startup ecosystem likewise demands a big picture mindset.

Competition among startups breeds success. That competition among companies pushing each other to develop a better solution is the cornerstone of our capital markets.

Continue to the full speech --> here


NCFA Jan 2018 resize - The Real Story of Access to Capital 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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VCs are becoming modern-day investment banks

Sifted | Nicolas Colin | Oct 13, 2021

funding continues to evolve - VCs are becoming modern-day investment banksThese days, a closely watched phenomenon is the growth and diversification of Andreessen Horowitz, one of the most prominent venture capital firms in Silicon Valley. Not only is it hiring new partners and employees by the dozens, but it is also expanding its approach to the market, going well beyond the usual artisanal approach of early-day venture capitalists.

For a long time, such firms would simply sign a cheque in exchange for equity at a given stage — whether seed or Series A or beyond. Now some of them are doing much more than that: investing across various stages, exploring new geographies and designing new financial instruments to adjust their offering to the specific needs of startups in sectors such as crypto, real estate, healthcare, financial services and others. It makes sense because, more often than not, startups now need more than just equity: they also need debt financing, working capital, structured financial products, access to specific counterparties and more.

See:  European Government Funds May Get Distributed by European Crowdfunding Platforms

If we look a bit more broadly, we see that this model already exists: it’s called an investment bank! Financial behemoths such as Goldman Sachs, Morgan Stanley and JPMorgan effectively act as one-stop shops for their clients. They provide equity capital, debt capital, asset management, liquidity, sophisticated risk management, market research and opportunities for mergers and acquisitions.

If a single firm can do it all for its clients, then there are economies of scale on both sides. The more capital providers you’re connected with, the more you can tailor your offer to your clients’ specific needs. In the other direction, the more clients you have, the more you can market your portfolio of opportunities to those who can provide capital. And you can already spot these networks at work in the tech world.

It is logical, then, that the most successful VC firms are slowly morphing into a new breed of investment banks — gatekeepers of the capital markets for tech startups and tech companies.

“The most successful VC firms are morphing into a new breed of investment banks — gatekeepers of the capital markets for tech startups”

What today’s startups need

Compared to the tech businesses of the past, today’s startups do have more diverse needs. For example, the rise of revenue-based financing, dominated by the likes of Pipe, Capchase, and Uplift1, has made startups offering SaaS products realise that they could fund part of their endeavour with non-dilutive debt capital rather than costly equity capital. Could the same investment firm provide the equity capital to kickstart the venture and then the debt capital to fund its growth once revenue flows? American VC General Catalyst sure thinks so.

Read:  Doug Ellenoff on US Reg CF Increasing Issuer Caps to $5 million: Investment Crowdfunding Will Challenge Traditional Venture Capital

On the other hand, those with capital on their hands feel that technology is where you can enjoy outsized returns over the long term; therefore, they’re seeking more exposure. As they realise it’s not always easy to access the best deals, maybe they’ll start thinking about trusting an investment bank with large amounts of money to be deployed across its client portfolio to generate the best returns.

It is no coincidence, then, that indexing, a concept long confined to the stock market, is becoming more visible in venture capital (see John Luttig here, and Tomasz Tunguz here). Instead of chasing a few deals a year, just trust a large, established firm with your money and let it index it on the entire tech market! A traditional VC firm can’t do that, but an investment bank does.

Continue to the full article --> here

 


NCFA Jan 2018 resize - VCs are becoming modern-day investment banks 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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NCFA’s Fintech Confidential Magazine (Issue 4 October 2021)

It's here!  Checkout the latest issue of Fintech Confidential, NCFA's digital magazine

Checkout FFCON21: BREAKING BARRIERS for more information about the annual conference, on-demand videos and ways to participate


NCFA Jan 2018 resize - NCFA's Fintech Confidential Magazine (Issue 4 October 2021) 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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Hot off the press: NCFA’s Fintech Confidential Issue 4, October 2021

About NCFA Canada | Craig Asano | Oct 7, 2021

NCFA Fintech Confidential Issue 4 cover - Hot off the press:  NCFA's Fintech Confidential Issue 4, October 2021

Welcome Letter

Dear Global Fintech & Funding Communities,

The National Crowdfunding & Fintech Association of Canada (NCFA) and partners are excited to present Vol. 1 Issue 4, FINTECH CONFIDENTIAL, a digital pop-up of the 7th annual 2021 Fintech & Financing Conference and Expo (FFCON21) held virtually from May 11-13 and co-hosted by NCFA and Toronto Finance International (TFI).

As global economies strive to contain the latest Covid outbreak and recover fragile sectors, fintech innovators continue to ‘BREAK BARRIERS’, the main theme of this year’s conference, and the second year in partnership with TFI, reflecting the growth and emerging challenges that the Canadian Fintech industry must navigate to achieve mass adoption and scale.

Fintech is not a niche but a permanent technological evolution that is changing the world of finance by high growth fintech companies and incumbent financial institutions.  It’s setting new standards and demanding new regulations.  It’s about delivering better financial products, services, and outcomes for everyone especially consumers and small to midsize enterprises (SMEs).

It’s been another unprecedented year with covid accelerating trends such as bitcoin’s institutionalization, the growing power of retail investors, the 2nd round of Open Banking consultations and the advisory committee’s recommendations to the federal government, payment modernization efforts, adoption of harmonized Crowdfunding regulation, AI roadmap, emergence of digital identity as a ‘right’ and core data infrastructure (ie., vaccine passports), growing support for Purpose (not just shareholder profit), green finance solutions tackling shared global problems such as SDGs and climate change, EDI (equality, diversity and inclusion), and regulatory push back and a firm ‘line in the sand’ for Big Tech.

FFCON21 was a successful event attracting over 100+ thought leaders, 75 partners, 500+ attendees, an NFT charity fundraiser in partnership with CanadaHelps for front line workers, and our second annual 2021 Fintech Draft competition -- a pitching event inspired by sports league drafts and designed to identity emerging high growth fintech ventures.  A hearty congratulations to the winners:  Agryo (Overall) and Copia Wealth Studios (People’s Choice)!

NCFA Fintech Confidential Issue 4 featured article TOC - Hot off the press:  NCFA's Fintech Confidential Issue 4, October 2021

Thank you to all the partners, speakers, attendees, volunteers, and the entire organizing team for making ‘Breaking Barriers’ an impactful and amazing online experience and for being part of Canada’s fintech and funding community.  We hope you enjoy reading this special edition of Fintech Confidential.

Finally, we continue to encourage the community to be mindful of others, and to do the right thing.  Dream big, be open to partnerships, and execute like your life depends on it -- it’s not too late to participate.  The world is changing because of you but there is a long bridge to cross, and more glass ceilings to break.  Onwards and upwards…

All the best
Craig Asano
Founder and CEO
NCFA Canada

 

Read the 85 page Fintech Confidential Issue 4 Digital Magazine --> Now

Note to readers:   the publishing platform's 'hot spot editor' is currently down (but we wanted to publish before Canada's Thanksgiving Long Weekend.  We'll add in audio and links to the document shortly.  Thanks for your patience!

 


NCFA Jan 2018 resize - Hot off the press:  NCFA's Fintech Confidential Issue 4, October 2021 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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The Holt Xchange Kicks off 2021 Investment Program

Holt Xchange | Jan Arp | Oct 7, 2021

NCFA Fintech Confidential article on HOLT Xchange new - The Holt Xchange Kicks off 2021 Investment Program

During this year’s investment period, The Holt Xchange hyper-targeted 7 main verticals that deemed most promising: digital identity, regtech, insurtechs, cybersecurity, digital lending, wealthtech, and digital assets. As a result, this led to better targeted candidates and as such, a greater number of applications were a better fit for our investment program and Holt Ecosystem.

As a way to engage with fintechs in these verticals, Holt hosted the ‘Holt Invests’ Webinar Series featuring special Holt Advisors and alumni portfolio companies who are experts in this space. As such, we were able to engage in some engaging conversations as they shared first-hand insights on the current trend and opportunities.

The webinars consisted of the following:

  1. The I AM Webinar explored trends and opportunities found within RegTech & Digital ID industries. It’s clear that compliance costs are surging and expected to continue this trend. For instance in 2018, businesses spent $1.3 million on average to meet compliance requirements and were expected to put in an additional $1.8 million (IAAP). In Europe, GDPR played a large role in compliance related cost increases for business, with more expected to come. Given Canada is moving forward nationally with programs like Bill C and provincially, such as Quebec’s Bill 64, we expect compliance costs in Canada to further continue. Additionally, FAbout 25% of all financial services applications are abandoned due to friction in the Know Your Customer (KYC) process, in part because current Identity Verification (IDV) procedures fail users. Need for consumers to support. To better prepare for these proposed legislative changes (ie. among many others), as well as support KYC / AML process, this year we invested in following regtech companies:
    1. RequirementOne com: Supercharge compliance power users and their ecosystem as Apple did for the mobile phone user.
    2. DigiPli com: We're redefining how financial institutions onboard customers by bundling a SaaS-based, end-to-end onboarding tool with ongoing support from AML experts.

See:  Where the UK is heading with Smart Data and why Fintechs want a cross-sectoral access

  1. The I BORROW Webinar explored the opportunities and trends found within Digital Lending space. There continues to be an emergence of alternative lending options, pushing lenders to compete on price, demographics and ancillary product offerings. Additionally new offerings such as revenue base financing, and buy-now-pay-later, are received with greater comfort by investors and customers alike. As such, while looking into alternative financing options and recognizing the lack of options for first time buyers in a surging real-estate market, we invested in a new financing product of:
    1. FirstStep Financial ca: Opening the Door to Home Ownership. Digital Lending
  1. The I EARN Webinar explored the opportunities and trends within Digital Assets, Investment & WealthTech industries. For instance, A survey conducted by the Alternative Investment Management Association and SS&C found that out of 100 global hedge fund managers, 69% of the market leaders use alternative data to boost performance. Also considering property earning assets, the real estate market showed no sign of slowing, and real estate sector funding appeared to be making a comeback early in the year, with VC funding to proptech companies growing 29% to $2.4B for Q1’21. Given the need for better solutions in trading and real-estate, we invested in:
    1. CityFalcon com: Using Big Data, AI, and NLP, we democratize access to financial content, personalize it, add analytics, and deliver it in real-time in 50+ languages. Capital Markets
    2. Reitium com: REITIUM is a blockchain real estate marketplace where everyone can be an investor starting with $100. PropTech

See:  Tokenizing Assets and Unlocking Value on the Blockchain

  1. While not a webinar in itself, the theme of I TRANSFER emerged throughout the series, focusing on payments and banking. Payments remains the largest attraction for VC investment, whereby funding for payments companies tripled compared to the previous quarter, with over $6 billion in funding. The number of deals (114) increased by 50%, with 18 mega-rounds accounting for over 75% of the total funding. From a banking side, according to Accenture, over 50% of banking tasks are still manually performed. By using technology, banks in North America can save more than 70 billion USD through 2025. Not only can technology improve the bottom line for banks, but we are witnessing better customer centric designs to better tailor and serve  niche demographics and communities. As such, we invested in the following payment and niche banking companies:
    1. Payzel com: Forged out of frustration we are building the GE Capital for Innovative Industries like cannabis. Digital Payments
    2. Phaze io: A prepaid payouts API for fintechs. Digital Payments
    3. PeopleHedge com(MAYBE)

The Holt Xchange has just invested in 8 of the best fintechs that build solutions for our society’s greatest challenges. They kicked-off their Growth Acceleration Program and are already in the process of working closely with the portfolio companies and leveraging their global advisory network to help drive their business growth.

I am very excited to work with this year’s portfolio investments, complemented with 500+ Advisors, and to have the backing of key partners like Fairstone, RBC, MNP, BDC and Montreal International.”  stated founding managing partner Jan Arp.

If you are interested to learn more about us, or meet our portfolio companies or Advisors highly suggest you attend our Fintech Show 2021 either remotely or in-person: Fintech Show 2021.

Read:  Tiger vs. SoftBank: Inside the investing playbooks that upended Silicon Valley

What’s Next for the Holt Xchange?  The Holt Fintech Show

  • When: Tue Nov 16, 2021
  • Where: Rialto Theatre (Montreal, QC)
  • Agenda:
    • 6 PM - 7 PM: Doors Open
    • 7 PM - 8:15 PM: Fintech Show
    • 8:15 PM - 9:00 PM : After Show
  • Tickets to register: https://bit.ly/3tdicJA

The world-famous Holt Fintech Show, in which our Holt 2021 Portfolio Companies will pitch their progress to date and share their next key milestones that the audience may want to get involved with, such as investing, partnerships, new clients, mentoring, etc.

This is a great networking opportunity for anyone looking to get more involved in the fintech ecosystem.

* If you can't make the in-person event, virtual options are available.

Join the LinkedIn event page here and remember to register a spot as spaces are limited!

 

About Holt XChange

Driving Canada’s Fintech leadership, The Holt Xchange is a global early-stage fintech fund headquartered in Montreal. Backed by Holdun, a 5th generation multi-family office, The Holt Xchange is focussed on building off of the legacy of Sir Herbert Holt. As the Holt family has done before, they are enabling Canada to take a technological lead in the next generation of financial services, known as Fintech. As Canada's most active seed fintech investor, Holt has spent the last year tracking over 10,000 early stage fintechs globally, soliciting the ones that presented a best match with their 500+ Advisor network, and then investing in the top 1% of applications globally, resulting in 35 investments to date.

 


NCFA Fintech Confidential Issue 4 250 - The Holt Xchange Kicks off 2021 Investment Program

This article is featured in NCFA's digital magazine, Fintech Confidential (Issue 4 Oct 2021). Click to read the latest thought leadership, insights and trends about Fintech in Canada:

Checkout NCFA's digital magazine, Fintech Confidential (Issue 4) --> here

 


NCFA Jan 2018 resize - The Holt Xchange Kicks off 2021 Investment Program 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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Wealth Owners Can Unlock Insights With Machine Learning

Copia Wealth Studios | Michael Sikorsky | Oct 7, 2021

NCFA Fintech Confidential article unlocking wealth - Wealth Owners Can Unlock Insights With Machine Learning

Did you know, society generates 1.145 trillion megabytes of data every single day? Most of us don't crunch numbers for a living, so organizing data and displaying it intuitively really matters. With all this data sprawling the planet, one of the most significant challenges is using it effectively.

Luckily, we can use artificial intelligence and machine learning in our investment portfolios to help us better understand the data. Yet, this idea can still be very overwhelming. Where do you start, and what do you track and measure? How do you know your data is working for you, and how does your data compare to your peers?

The good news is that artificial intelligence and machine learning work together with big data, making it easier than ever to benefit from the tech. One area this technology can be applied is to our own investment portfolios. After all, we're all looking for a more comprehensive understanding of our strategies and wish we could make much more confident decisions.

Artificial Intelligence and Better Data Visualization Are Your Competitive Edge

People have been trying to understand and exploit data for decades. From Bloomberg Terminals to Robo-advisors in your pocket, there's been an explosion of financial visualization tools for people of all skill and knowledge levels. They allow just about anyone to interpret signals and make predictions based on their own perspective. We can leverage those advances in visualizations and add machine learning algorithms to make the insights sharper and more helpful.

See:  As financial institutions buy into AI, these factors will be key to successful transformations

Until recently, these algorithms were out of reach for the average investor. This is changing rapidly as today, developers build platforms and services that make deep learning accessible to everyone. There are obvious use cases such as interactive graphs or elegant charts. But from there, it's easy to imagine a world where your portfolio is benchmarked against others in a similar cohort, allowing you to fine-tune your strategy.

Using the right wealth management platform further allows wealth owners and family offices with complex portfolios to access these data visualizations and unlock a complete picture of their overall wealth in exciting new ways.

Fundamental Analysis

AI-powered visualizations can help investors gain perspective into what's going on with each of their asset classes. Adding algorithms to the mix can uncover hidden correlations between those same asset classes. From there, we can use this data to suggest which investment opportunities may outperform others and which positions we might have to reconsider.

Another example would be using AI to scan documents such as annual reports, economic articles, and other financial datasets to better understand a company's fundamentals.

In other words, AI can lead to a more healthy asset management strategy.

Stronger Portfolio Understanding

Artificial intelligence can also help us better predict future outcomes or expected returns, which can help with optimal asset weighting. This is like having a magical crystal ball. We can understand what our present-day portfolio looks like versus our dream portfolio with a couple clicks. We can run and re-run scenarios or ask the AI to help us know what might happen to our portfolio based on specific criteria.

See:  KPMG Pulse of Fintech Report H2 – 2020

Algorithms are also capable of handling complex optimization problems. For instance, they can restrict the number of assets or set minimum holding thresholds. When you couple these ideas with user-friendly visualizations, things really start to get interesting.

Risk Management

AI can likewise help us analyze qualitative data, like news reports or social media, to assess the risk curve of a particular investment. It can forecast risk variables ensuring absolute risk falls within bearable levels, whatever those might be.

Another great example is assisting with transaction costs for large purchases. An AI can find the best prices for breaking up big trades into smaller chunks. These kinds of algorithmic traders already exist and use artificial intelligence (we just call them Robo-advisors.)

Artificial Intelligence Improves Accessibility to Data Visualization

These tools can supercharge your visualizations. Wealth owners can capitalize on the advancements and availability of algorithms to find insights in the same way financial analysts of the past did without the need to manually calculate outcomes.  We're all looking for ways to improve our portfolio management. It might be time to ask ourselves if the AI and data visualizations we use are up to the task.

See:  For Digital Assets, Private Markets Offer the Greatest Opportunities

About the Author:  Michael Sikorsky (@mjsikorsky) is an EY Entrepreneur of the Year Winner, Deloitte Fast 500 Recipient, and serial innovator - he sold his first company to ThoughtWorks at age 28. His current company, Copia Wealth Studios, is a financial intelligence platform on a mission to Simplify wealth. He is also the Chief Investment Officer of his family office, Sky and Ray. Michael is passionate about education and has guest lectured at Harvard Business School, Stanford, MIT, Columbia Business School, and the World Economic Forum.


NCFA Fintech Confidential Issue 4 250 - Wealth Owners Can Unlock Insights With Machine Learning

This article is featured in NCFA's digital magazine, Fintech Confidential (Issue 4 Oct 2021). Click to read the latest thought leadership, insights and trends about Fintech in Canada:

Checkout NCFA's digital magazine, Fintech Confidential (Issue 4) --> here

 

 


NCFA Jan 2018 resize - Wealth Owners Can Unlock Insights With Machine Learning 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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Startup Genome: Canada Ranks 14th in The Global Startup Ecosystem Report 2021

Startup Genome | Sep 29, 2021

Global startup ecosystem report 2021 - Startup Genome:  Canada Ranks 14th in The Global Startup Ecosystem Report 2021State of the Global Startup Economy

In March 2020 startups’ prospects looked bleak. Consumer demand had cratered. Travel ceased. Struggling businesses shed workers or closed. Global VC spending dropped 17% in the first quarter compared to the preceding one, with the number of rounds down 5%, according to Crunchbase. In China alone the number of venture rounds plunged 74% in just two months.

See:  Are you a Pig, Gazelle or Bear? Beyond Unicorns, Zoology of startups

Then everything changed. Covid-19, which made rapid adopters of us all, slashed a bright line between how we once lived and how we will live. It is a line across which entrepreneurs are uniquely positioned to ferry us. That is why, for many economies, startups are leading the way back to economic vitality.

The pandemic—dire for humans—has been fuel to technology’s fire. Last year Internet capacity rose 35%, reports market-research firm Telegeography. Global broadband traffic in the fourth quarter increased more than 51% over the previous year: a combination of more subscribers using more data during Covid-19, according to OpenVault, which tracks broadband consumption. Global e-commerce shot up to $26.7 trillion, according to the United Nations, with countries like the Republic of Korea, the United Kingdom, and China experiencing especially dramatic spikes. The number of people buying food and household items online grew an average 30% worldwide.

Businesses, meanwhile, pivoted to remote work, with a corresponding bump in productivity of 3.1%, according to Goldman Sachs. Companies also sped up digitization of customer and supply-chain operations by three to four years, reports McKinsey & Company.

See:  Lobbying: it’s high time startups up their game

Investors surged into these and other opportunities. In the first half of 2020 venture funding worldwide was $148 billion. In the first half of 2021 it had soared 95% to $288 billion, with increases at every stage, according to Crunchbase. Startups also are benefiting from new investment channels, including democratizing startups like Robinhood; crowdfunding; and special purchase acquisition companies. (Although some increasingly are skeptical of SPACs.)

The term “unicorn”—an indicator of extreme rarity—is becoming a misnomer. As of August there were more than 800 startups around the world with valuations above $1billion, for a cumulative valuation in excess of $2.6 trillion, according to CB Insights. Just between October 2020 and June 2021 their number rose 43%. Although U.S. companies dominated, China, Canada, India, Germany, Israel, the United Kingdom, and France produced between 7 and 10 unicorns in the first half of 2021, according to Crunchbase. Meanwhile, VC-backed exits are smoking hot. Startup Genome’s data show a 20% year-over-year growth in the dollar value of exits in startups globally.

For entrepreneurial ecosystems, 2021 is turning out to be a year of remarkable growth and productivity. And the dispersal of success—already underway before the pandemic—has only accelerated.

Read:  From Global Leader to Follower, is Canada losing its FinTech edge?

Key Insights

  • Despite a turbulent year for many, the top five global startup ecosystems maintain their reign at the top, with Silicon Valley in the #1 position, followed by New York City and London tied for #2 for the second year in a row. Beijing and Boston follow at #4 and #5, respectively.
  • North America continues to dominate the Global Rankings, with 50% of the Top 30 ecosystems coming from this region, followed by Asia with 27% and Europe with 17% of the top performing ecosystems globally.
  • The global startup economy is worth over $3.8 trillion in Ecosystem Value, more than the individual GDP of most G7 economies, not including the value of exits prior to 2018.
  • There are now 79 ecosystems generating over $4 billion in value which is more than double the number identified in 2017.
  • 91 ecosystems created unicorns in 2020.

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NCFA Jan 2018 resize - Startup Genome:  Canada Ranks 14th in The Global Startup Ecosystem Report 2021 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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