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Category Archives: Leadership, Productivity, Competition

A Look at VCCI-2: Canada’s Venture Capital Catalyst Initiative Version 2

Private Capital Journal | | May 24, 2022

Venture capital program - A Look at VCCI-2:  Canada’s Venture Capital Catalyst Initiative Version 2The Canadian federal government released its Request for Proposals (RFP) for fund-of-funds and fund managers wishing to apply for its Venture Capital Catalyst Initiative-2 (VCCI-2) program in mid-May. This program follows upon the Venture Capital Action Plan (VCAP) of 2013 and the VCCI-1 of 2017. All three versions have had the express purpose of strengthening the Canadian venture capital (VC) industry by injections of public monies in partnership with private capital sources.

See:  Improving the Regulatory Environment for Entrepreneurial Capital Formation: JOBS Act 4.0

VCCI-2

  • VCCI-2 sets out a more ambitious target for attracting private capital than did VCCI-1 in that VCCI-2 requires fund-of-funds applicants under the $350 mm.
  • Stream 1 to secure $3 of capital for every $1 from the federal government.  The financial incentive does not appear as generous as that under VCCI-1 which was a $2.25 to $1 ratio.
  • Private capital remains the first to be paid with contributed capital returned plus 5% preferred return per annum (NB:  VCCI-1 fixed the amount at plus 7% per annum.
  • Requires detailed, intrusive some might find, reporting requirements regarding Diversity, Equity and Inclusion (DEI) measures that are designed to address shortcomings of certain disadvantaged groups, such as women.
  • It is assumed by the government that its own commitment to DEI (i.e., $300 million Equality Fund which was established to invest in womens’ movements in the global South and whose partners with Ottawa include one Schedule 1 bank and one venture capital fund) will not have a negative impact on the private sector’s assessment of the attractiveness of the VCCI-2 from a financial returns perspective.
    • This suite of DEI measures has been substantially expanded from the general call for greater gender parity under VCCI-1. Taken together, achieving the $3 to $1 target leverage ratio may prove difficult, if not unrealistic.

Stepping back and looking at the forest not the trees, VCCI-2 reveals the essential small ‘c’ conservative of federal venture capital support policy going back to Prime Minister Harper’s VCAP nine years ago.  A prime example of the inflexibility of the program design has to do with the list of industries in which successful applicants are forbidden to invest. These include the usual cast of suspects, namely tobacco, alcohol, gambling, pornography and weapons.

See:  Decentralizing Venture Capital: DAO

VCCI-2 is also a very big “L” Liberal entity that strongly reflects the ethos of the current federal government. Of course, it has long been criticized for neglecting National Defense and has been the subject of intense criticism on the procurement front and so the prohibition against investing in weapons firms under the VCCI-2 seems to provide further evidence of Ottawa’s reluctance in dealing with military hardware. That ethos extends to what it calls DEI which is a very important component of VCCI-2 and even includes a small $50 million amount for five to ten managers in this particular space. The political risk to the fund of funds, their LP’s and their investee companies and funds that choose to sign on to the VCCI-2 is that that very participation signals their concurrence with the political priorities of the current regime in Ottawa and in so doing makes less likely any future support program under a different government whose own priorities are likely to differ.

Continue to the full article --> here


NCFA Jan 2018 resize - A Look at VCCI-2:  Canada’s Venture Capital Catalyst Initiative Version 2The 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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Multinational Companies Who left Russia and Ones that Decided to Stay

Website Planet | Tom Read | May 24, 2022

Russia and Ukraine - Multinational Companies Who left Russia and Ones that Decided to StayList of all the companies that decided to leave Russia/stop business in Russia following the war // companies that decided to stay

Multinational companies can no longer ignore social and political issues. Their actions and policies must reflect the values of their customers.

See:  Ways you can help support Ukraine

We’ve compiled the most extensive list of multinational companies and their responses to the invasion. While some companies have been praised for their efforts, others have been justifiably accused of not doing enough.

This article will cover the companies that have left or partially left Russia, and those that stayed. We’ll provide regular updates to keep the information accurate and relevant, so make sure to check back in!

Finance

American Express

  • American Express stated that its payment cards would no longer work with Russian merchants and ATMs in a press release on March 6th.
  • American Express Chairman and Chief Executive Officer Stephen J. Squeri also stated that “cards issued locally in Russia by Russian banks will no longer work outside of the country on the American Express global network.”
  • Squeri said the company has “halted” its relationships with sanctioned Russian banks and added: “We are also suspending all business operations in Belarus.”
  • What’s more, Squeri highlighted American Express’ assistance to affected employees, its $1 million relief donation, and the company’s pledge to match colleague donations.

Goldman Sachs

  • Goldman Sachs was the first major Wall Street bank to cease business operations in Russia.   On March 10th, the financial firm said it was “winding down its business in Russia in compliance with regulatory and licensing requirements.”
  • A company spokesperson said: “We are focused on supporting our clients across the globe in managing or closing out pre-existing obligations in the market and ensuring the well-being of our people.”

ING: 

  • ING Group announced it would not take on new business with Russian entities in a March 2nd press release.
  • The Dutch bank’s Chief Executive, Steven van Rijswijk, said: “We strongly condemn the invasion of Ukraine, the devastating and heart-breaking impact it has on people’s lives, and the threat it poses to international stability and security.”
  • ING has offices and hundreds of employees throughout Russia and Ukraine. ING maintains that it is in close contact with those colleagues.

JP Morgan:  

  • JP Morgan is another US investment bank that’s leaving the Russian market. A company spokesperson stated that JP Morgan was “actively unwinding Russian business” and “[has] not been pursuing any new business in Russia.”
  • JP Morgan’s March 10th announcement highlighted that the company’s activities are “limited” in Russia. According to the statement, JP Morgan’s activities in the region include “helping global clients address and close out pre-existing obligations; managing their Russian-related risk; acting as a custodian to our clients; and taking care of our employees.”
  • JP Morgan had previously announced up to $5 million in donations for Ukraine relief organizations in a March 8th address.

London Stock Exchange Group

  • On March 3rd, the London Stock Exchange (LSE) Group temporarily barred trading in 27 Russian-linked companies, including Gazprom, Sberbank, and Lukoil.
  • Severstal is another major Russian company that’s blocked by the LSE. Russia’s richest man, Alexei Mordashov, owns the steel and mining corporation.
  • According to Reuters, LSE blocked any remaining Russian companies on March 4th “in order to maintain orderly markets.”

Visa

  • Visa Inc. Chairman Al Kelly said: “We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed,” in a statement on March 5th.
  • Visa announced it was pausing its services in Russia, including restricting Visa transactions in the nation. Russian-issued Visa cards no longer work outside of Russia, and Visa cards issued elsewhere won’t work within Russia.  “This war and the ongoing threat to peace and stability demand we respond in line with our values.”
  • Visa is also providing a $2 million grant to UNICEF, and double-matching employees’ charitable contributions up to $1 million.

Mastercard

  • In a press release on March 5th, Mastercard stated that it would halt support for Russian-issued cards, wherever they are used. Meanwhile, non-Russian Mastercards will no longer work with Russian merchants or ATMs.
  • Mastercard also highlighted its work helping affected employees and a $2 million donation to humanitarian relief organizations.
  • The company added that it wants to assist governments “to ensure the safety and security of the global payments ecosystem” while expressing a desire to one day “restore operations.”

Other Financial Companies Taking Action

  • Allianz is actively reducing its exposure to the Russian market 143
  • Adenza paused Russian business 144
  • Asian Infrastructure Investment Bank curtailed Russian access to capital markets 145
  • Assicurazioni Generali exited the Russian market completely 146
  • Bank of China diminished Russian access to capital markets 147
  • BlackRock reduced Russian access to capital markets 148
  • BNP Paribas curtailed access to capital markets for Russian entities149
  • Citi announced a phased exit from Russia 150
  • Commerzbank stopped new business in Russia and is winding down current transactions 151
  • Credit Suisse curtailed Russia’s access to capital markets 152
  • Deloitte exited the Russian market 153
  • Deutsche Bank is closing Russian business 154
  • EY exited its Russian operation 155
  • Fitch paused Russian business 156
  • HSBC reduced Russia’s access to capital markets 157
  • ICBC cut access to capital markets for Russian entities 158
  • Intercontinental Exchange diminished Russian access to capital markets 159
  • Moody’s suspended Russian operations 160
  • Nasdaq curtailed access to capital markets for Russian entities 161
  • New Development Bank halted Russia’s access to capital markets 162
  • Payoneer closed Russian accounts 163
  • PayPal suspended Russian business operations 164
  • Rabobank diminished Russian access to capital markets 165
  • Remitly Global blocked access for new users in Russia 166
  • S&P cut Russia’s access to capital markets 167
  • Societe Generale curtailed access to capital markets for Russian entities 168
  • State Street curbed Russia’s access to capital markets 169
  • Western Union suspended Russian business 170
  • Wise PLC paused its Russian partnership 171
  • The World Federation of Exchanges suspended its Russian members and affiliates 172

View full list of companies leaving or boycotting Russia due to the invasion of Ukraine --> here


NCFA Jan 2018 resize - Multinational Companies Who left Russia and Ones that Decided to StayThe 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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Canada’s Tech Adoption is Declining Compared to OECD Peers

Centre for Future Work | Jim Stanford | May 24, 2022

Business investment in RD Canada - Canada's Tech Adoption is Declining Compared to OECD PeersThere is little evidence that robots and other advanced technologies are displacing workers and causing technological unemployment in Canada. To the contrary, Canada’s adoption of new technology has surprisingly slowed down in recent years. That is the conclusion of a major new report on innovation and automation in Canada’s economy, from the Centre for Future Work.

The report, titled Where are the Robots?, reviews nine empirical indicators of Canadian innovation, technology adoption, and robotization. They paint a worrisome picture that Canadian businesses have dramatically reduced their innovation effort since the turn of the century, and are lagging well behind other industrial countries in putting new technology to work in the real economy.

See:  AI Will Transform 500 Million White-Collar Jobs In 5 Years; Silicon Valley Must Help

While there is no evidence that the quantity of jobs in Canada has been undermined by new technology, there are many signs that the composition and quality of work has shifted in negative ways.

“The failure of employers to implement new technologies is causing an over-reliance on low-quality work, holding back our productivity and incomes, and squandering the potential for safer jobs and more leisure time.”

The report makes 6 policy recommendations to improve innovation and technology adoption in Canada, including reforming fiscal incentives, expanding publicly-funded R&D, nurturing industries that use more robots and machinery, and giving workers more say in how technological change is implemented in workplaces.

See:

Jim Stanford, Economist and Director of the Centre for Future Work:

“Technology will be neither the hero nor the villain in the future of work – it all depends how technology is used, and how the costs and benefits are shared. But the reality is that Canada’s technological performance is flagging, fast. Revitalizing technological innovation and adoption, and ensuring that it enhances jobs not displaces workers, is vital to our future economic and social progress.”

Continue to the full article --> here


NCFA Jan 2018 resize - Canada's Tech Adoption is Declining Compared to OECD PeersThe 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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Galloway: Chrome has spread globally and controls 64% of the global browser market

Scott Galloway | May 24, 2022

global internet browsers - Galloway:  Chrome has spread globally and controls 64% of the global browser market

By far, Google Chrome is the most popular browser in the world

 

 


NCFA Jan 2018 resize - Galloway:  Chrome has spread globally and controls 64% of the global browser marketThe 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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China vs the US: The Lose-Lose Tech War

Project Syndicate | | May 20, 2022

China vs US tech war - China vs the US:  The Lose-Lose Tech WarThe increasingly bitter rivalry between the United States and China ultimately will leave both countries – and the world – worse off. While competition is unavoidable and even beneficial in some areas, comprehensive efforts to derail each other’s progress stand little chance of success, and will likely backfire.

SINGAPORE/LOS ANGELES – The Sino-American geopolitical rivalry is growing increasingly bitter, with Russia’s war in Ukraine only the latest source of schism. The mutual antagonism is deepening, with little effort on either side to stem the deterioration in the bilateral relationship.

It doesn’t have to be this way. To maintain global peace, and to address humanity’s urgent collective challenges, the United States and China need to find discrete areas where they can pursue cooperation and reverse the rot in their relationship. Science and technology – particularly as they relate to climate change – offer the best prospects for renewed cooperation. To take advantage of such opportunities, however, both sides will first need to reassess fundamental assumptions and lower the temperature of their rhetoric.

See:  Is productivity, wealth creation and competition at the forefront of Canada’s growth agenda?

On the American side, too many political leaders and commentators believe that an economic decoupling from China will cripple its ability to catch up, let alone surpass, the US as the world’s leading economy. The dynamism that China has exhibited for the past four decades suggests otherwise. As Graham Allison of Harvard University and his co-authors note in a recent Belfer Center paper, “In some races, [China] has already become No. 1. In others, on current trajectories, it will overtake the US within the next decade.”

On the Chinese side, there are many who believe that the country is now capable of going it alone. They think China has already learned all that it needed to learn from the West and the wider world. Homegrown innovations, in their view, combined with the strength of China’s governing structures, will be enough to sustain the country’s upward trajectory.Chinese who think this way should recall their country’s own history. It was a refusal to learn from the outside world, coupled with the belief that Chinese institutions were superior to all others, that helped to bring about the country’s long decline from its position as the world’s wealthiest and most advanced society.

See:  Canada’s Competition Problem: 7 Reasons

The world’s most pressing problems are global, not national. They will require not just competition but also cooperation. Two of the most obvious are COVID-19 and climate change. Neither problem observes national boundaries, and both demand human ingenuity.

The world needs the US and China to cooperate where necessary, and to compete where appropriate.

Continue to the full article --> here

 


NCFA Jan 2018 resize - China vs the US:  The Lose-Lose Tech WarThe 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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Improving the Regulatory Environment for Entrepreneurial Capital Formation: JOBS Act 4.0

Crowdfund Insider | | May 16, 2022

Washington  - Improving the Regulatory Environment for Entrepreneurial Capital Formation:  JOBS Act 4.0Passed with large bipartisan majorities and signed into law by President Obama, the 2012 JOBS Act was a bipartisan achievement of consequence. The JOBS Act substantially improved the laws governing entrepreneurial capital formation and has had a measurable positive impact on entrepreneurial capital formation.

On the 10th anniversary of the JOBS Act, Senate Banking Committee Republicans under Sen. Toomey’s leadership, have released a discussion draft of new legislation, called JOBS Act 4.0, that would considerably improve the regulatory environment for entrepreneurs seeking to raise capital. In all, it contains 29 discrete pieces of legislation, many of which have also been introduced as stand-alone legislation. The package, considered as a whole, can be expected to have a very positive impact comparable to that of the original JOBS Act. These bills were discussed at an April 5th Senate Banking Committee hearing at which the author testified.

Sen. Toomey is seeking public comments on how the draft legislation may be improved by June 3, 2020. Comments may be provided by email to submissions@banking.senate.gov.

See:  Fintech Fridays EP57: 10 Years of Investment Crowdfunding: Past, Present & Future Since the JOBS Act

The discussion draft is divided into four titles:

Title I—Encouraging Companies to be Publicly Traded (8 sections)

Title II—Improving the Market for Private Capital (6 sections)

Title III—Enhancing Retail Investor Access to Investment Opportunities (8 sections)

Title IV—Improving Regulatory Oversight (7 sections)

The discussion below addresses 15 of the bills included in the discussion draft. All bill numbers refer to the 117th Congress unless otherwise noted.

The Impact of the Original JOBS Act

In all, as the tables below show, JOBS Act offerings amounted to about three to seven percent of the private capital raised in the U.S. in 2018 and 2019. The Title I Emerging Growth Company (EGC) provisions account for additional capital raised (although this capital is raised in the public market). The graph below showing the number of listed companies is quite remarkable. The number of public companies was in a free fall prior to the JOBS Act. Now that number is basically flat. The number of IPOs in the nine years after the JOBS Act has increased by 43 percent relative to the nine years before the JOBS Act and the amount raised has increased by 57 percent. Precisely how much of that is attributable to Title I is not clear but roughly four-fifths of issuers conducting IPOs appear to be taking advantage of EGC status.

See:  More NCFA Advocacy

What's Included in the Jobs Act 4.0

  • Sec. 102: Emerging Growth Company Extension Act.
  • Sec. 103: Dodd-Frank Material Disclosure Improvement Act (S.3923).
  • Sec. 107: The Main Street Growth Act (S.3097).
  • Sec. 202: Expanding American Entrepreneurship Act (S.3976).
  • Sec 204: Small Entrepreneurs’ Empowerment and Development (SEED) Act (S.3939).
  • Sec. 205: Unlocking Capital for Small Businesses Act (S.3922).
  • Sec. 206: Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act (S.3391).
  • Sec. 301: Small Business Audit Correction Act (H.R.8983 S.2724, 116th Congress).
  • Sec. 303: Gig Worker Equity Compensation Act (S.3931).
  • Sec. 304: – Increasing Investor Opportunities Act (S.3948).
  • Sec. 305: Improving Crowdfunding Opportunities Act (S.3967).
  • Sec. 306: Equal Opportunity for all Investors Act (S.3921).
  • Sec. 307: Facilitating Main Street Offerings Act (S.3966).
  • Sec. 404: Protecting Investors’ Personally Identifiable Information Act (S.1209).
  • Sec. 405: Administrative Enforcement Fairness Act (S.3930).
  • Additional Proposals Relating to Entrepreneurial Capital Formation That Should be Added to JOBS Act 4.0.

Continue to the full article --> here


NCFA Jan 2018 resize - Improving the Regulatory Environment for Entrepreneurial Capital Formation:  JOBS Act 4.0The 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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Why BNPL Swedish giant Klarna has sights set on Canada

FP | Stephanie Hughes | May 17, 2022

Klarna - Why BNPL Swedish giant Klarna has sights set on CanadaSwedish fintech leader Klarna Bank is planning to establish a product development and tech hub in Toronto as it looks to grow its “buy now, pay later” model in the increasingly competitive North American market.  BNPL is already starting to take off in Canada and BNPL payments are projected to grow 63.5 per cent and reach $5.9 billion in 2022 (Source: Research and Markets).

Now, with more than 400,000 merchants on board and US$1.6 billion in net operating income, founder and chief executive officer Sebastian Siemiatkowski is looking to catch a ride on Toronto’s thriving tech scene and take advantage of the country’s shift into open banking.

See:  Welcome to the third largest tech-hub in North America

Why Canada?

  • Klarna initially set its sights on Canada in February, when it brought its “Pay in 4” (split payment) service to Canada in February and partnered with retailers such as Harry Rosen, Mejuri and Frank And Oak as well as hundreds of others.
  • Building a tech hub with up to 500 people would give the company a startup feel as well as a foothold in the North American market.
  • Being part of an ecosystem that helped startups such as Shopify Inc. thrive is another reason Klarna picked Toronto.
  • Canada’s shift to open banking is one reason Siemiatkowski is optimistic about the opportunity here. The regulatory framework, due to launch next year, would give consumers the ability to share their banking data with other financial institutions or move their information between institutions.

“We compared it with all of U.S. and Canada and so forth and concluded that Toronto had a fantastic amount of talent, fantastic positioning, (and) a very business-friendly government,” he said.

Continue to the full article --> here

 


NCFA Jan 2018 resize - Why BNPL Swedish giant Klarna has sights set on CanadaThe 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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