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Fintech Fridays EP62: The Future of Investment Crowdfunding: Innovations, Data, and Opportunities

About NCFA Canada | Craig Asano | Apr 5, 2024

EP62 Sherwood Neiss Banner - Fintech Fridays EP62:  The Future of Investment Crowdfunding: Innovations, Data, and Opportunities

EP62 Sherwood 'Woodie' Neiss

Apr 5, 2024: NCFA's Fintech Fridays podcast episode 62

The Future of Investment Crowdfunding: Innovations, Data, and Opportunities

Featured Guest: 

SHERWOOD 'WOODIE' NEISS, Principal, Crowdfund Capital Advisors (LinkedIn)

Mr. Neiss, based in the US, is at the forefront of the investment crowdfunding industry, from issuance to data analysis, to secondary trading and liquidity.  He co-authored the "Crowdfunding Exemption Framework," which became the basis of Title III of the U.S. JOBS Act to legalize equity and lending-based crowdfunding.  He co-founded Crowdfund Capital Advisors ("CCA"), a consulting firm serving certain governments and multi-lateral organizations, including the Inter-American Development Bank, the World Bank, governments of Chile, Malaysia, Israel, and the UAE.  He is also a co-founder of GUARDD, the EDGAR of financial disclosures for private companies, and is a General Partner of D3VC; a Venture firm focused on diversified investing among investment crowdfunding issuers.  He is the chief architect of the CCLEAR Regulation Crowdfunding Database, which tracks and monitors online security transactions for investors, regulators, platforms, and the media.  Before crowdfunding, Mr. Neiss co-founded FLAVORx, Inc., acted as its chief financial officer, and won Ernst & Young's Entrepreneur of the Year award, as well as the Inc. 500 award three years in a row.  He's also a long standing advisor at NCFA.

About Crowdfund Capital Advisors

Crowdfund Capital Advisors (CCA) is a crowdfunding advisory, implementation and education firm founded by Jason Best and Sherwood Neiss, the leaders of the securities-based crowdfunding movement. CCA provides comprehensive advisory solutions to both public and private institutions.

Links

About this episode

In this enlightening episode of Fintech Fridays, Season 4, Episode 62, host Craig Asano, founder and CEO of NCFA Canada, sits down with the distinguished Sherwood 'Woodie' Neiss, a pioneer in the investment crowdfunding industry and an advisor to NCFA. Together, they delve into the evolution of investment crowdfunding, its impact on startups and investors alike, and the potential for future growth. Woodie shares his journey, from the inception of crowdfunding regulations to leading the charge with data-driven insights and AI technology in investment strategies. Listeners will gain an insider's perspective on the latest developments, the significance of data in shaping the industry, and the role of technology in advancing investment opportunities. Whether you're an investor, entrepreneur, or fintech enthusiast, this episode offers a comprehensive look into the dynamic world of investment crowdfunding, revealing how it's reshaping the landscape of finance and opening new doors for innovation and growth. Enjoy!!

Duration:  45 mins

 

Episode Jump Links:

00:00 Episode introduction

03:22 Meet Sherwood 'Woodie' Neiss

04:55 Investment crowdfunding and its evolution

06:34 Genesis of D3VC.ai, AI driven venture fund, and GUARDD

11:40 RegCF data access, reports, algorithms

13:47 Current state of U.S. Regulation Crowdfunding 2024

15:00 Impact of Crowdunding, innovation, job creation, economic stimulus ($6.8 billion)

16:15 Value creation, circular impact and velocity

18:50 JOBS Act 4.0, RegCF regulatory improvements

21:25 Investment Crowdfunding vs Angel-VC-seed/pitchbook

22:00 RegCF attracting more mature issuers and investors, removing FUD

23:38 RegCF diverse and inclusive, 41.7% offerings from women or minority

26:00 RegCF is scaling towards $1 billion annually

29:18 Platform dynamics and opportunities

31:28 Global expansion and tokenization

35:30 AI and technology's impact on RegCF markets

37:12 How to get started in industry, job insights and opportunities

40:05 Rapid fire questions

42:25 How to get in touch with Woodie

43:41 Episode close

 

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Fintech Friday Transcript of Episode 62:

SHERWOOD 'WOODIE' NEISS, Principal, Crowdfund Capital Advisors

Intro: Welcome to fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners. Covering all things fintech, blockchain, AI and alternative finance.

 

Craig Asano: Hello everyone. My name is Craig Asano, the founder and CEO of NCFA Canada, welcoming you to another episode of Fintech Fridays. This is season four, episode 62 of NCFA's weekly podcast together with partners, where we uncover the latest and greatest and sit down with fintech founders, investors and talk about innovations, the developments, news and in today's instance, the latest and greatest in Investment Crowdfunding in 2024. Today we have an incredible guest. He's been on here before, so don't be shocked if you recognize Mr. Sherwood Neiss, aka 'Woodie'. So I'm going to from this point on, refer to him as Woodie. It's a very affectionate, nickname, but he's based in the US, he's also an NCFA Advisor, but I cannot think of someone better who's at the forefront of investment crowdfunding industry and has been so since its inception. So they're involved, and Woodie particularly, with data analysis right from Stem to stern of all aspects of crowdfunding. And they specialize in investment crowdfunding, secondary trading, liquidity, all the latest, topics. So, a long time ago, uh, we even had, for those of you who might actually have been there, Woodie, we flew him up. He came out to Vanfunding conference in Vancouver, talked about, uh, what he was doing at that time. Fast forward many years into the future, we have the privilege of looking at the data.  Everything's data driven, a lot more insightful. There was a lot of unknowns, I wouldn't say, looking back, a tremendous amount of risk. But we're very excited to dig in to the latest data of what's happening in investment crowdfunding and also cover off the future. So, just very quickly, because, we do have a hard stop at 45 minutes for this podcast today. And I just want to say that Woodie has been an author. He's been a global speaker. He's launched a variety of crowdfunding related brands, and we're going to give him an opportunity to talk a little bit about, Crowdfund Capital Advisors. What's going on there? He's the co-founder of a company called GUARDD. So we'll let him talk about that later. He's got CCClear or all the regulation crowdfunding data project on the go and all the data pipelines and partnerships with all the various data sources, as well as his background. He was always, even pre-crowdfunding, he had won awards. He's Ernst and Young's entrepreneur of the year award. I bet you you don't hear that as as often as you do crowdfunding these days, Woodie. But he was a triple (3 years in a row) Inc 500 recipient as well. So, Woodie, I just want to welcome you back to the show. Thanks for agreeing to sit down to share your knowledge and experience with us.

 

Sherwood 'Woodie' Neiss: Hey, it's great to be here, Craig. It's just funny story, if you remember, I was late for the event in Vancouver because I had told the immigration people that I was here in Canada to legalize crowdfunding, and so they detained me. And then they they wanted to know everything that I was doing. And I was just like, maybe I used the wrong word, and so I, showed up to your event like ten minutes late but it made for a funny story when I got on stage.

 

Craig Asano: Yeah, it was very uncomfortable. I remember I was sitting there at the podium. You were the keynote speaker, and I just had to cover off ten minutes. That's okay. We've been there and done that. but, as just someone who's so involved with the space, very few OGs I guess we can say, that can sit down. Actually, both you and I and reminisce about old times. We always say it that we'd like to do sort of an episode that's just storytelling What it was like and more shoot from whatever is on the mind but today we're a little bit more focused because we want to cover off the report. We want to dig into the data, find out what's going on. But to kick things off, like we always do with with the format of the podcast here, we just give the speakers an opportunity to talk about, how you got involved with the sector that we're covering.   Today it's all about investment crowdfunding. What was that journey for you? What were the motivations? And maybe you can kick it off with a very high level definition from your perspective, the guru, what is investment crowdfunding and what are you doing with all these other projects you got on the go?

 

Sherwood 'Woodie' Neiss:  Investment crowdfunding is really Kickstarter, Indiegogo, but with securities regulations attached to it. So instead of people giving money to people with good ideas, people are investing money in people that have great business ideas. And in exchange for that, you're getting either an equity instrument or you're loaning money, so it's a debt instrument. This industry really started in 2016 here in the United States. It was something that, of course, accredited investors could be doing prior to this. It couldn't happen online but what we did in the Jobs Act of 2012 was to open the door to both retail investors as well as general solicitation. So now we enable these funding platforms that look like Kickstarter and Indiegogo, but are now regulated by the SEC and overseen by FINRA here in the United States to actually be a matching service. And so people with great ideas can list their businesses up there to raise capital. Investors can look at these deals. There's all these disclosures related to it. That's what we sort of capture information on 125 data points on every single company, and we've been doing that since 2016. We write this annual state of the investment crowdfunding industry report. It's only 150 pages long this year. So you could see, like in the first year when it was eight pages long, the industry's only grown just a tiny bit since then. No, it's grown tremendously and I think actually one of the things that might be helpful in this conversation is maybe if I share some of the slides, related to that as well.

 

Craig Asano: Yeah, absolutely. Did you want to talk about what you're doing I'm kind of interested to hear a little bit about the D3VC and the definition that I got for that project. It's all around AI venture and it's on top of the investment crowdfunding industry. So what's going on there?

 

Sherwood 'Woodie' Neiss: So, we wrote the law. We wrote the dummies guide to investment crowdfunding. We wrote the world Bank report. We traveled to 43 countries around the world. When the industry launched in 2016, we launched the database that we call CClear, and that collects the information on every company that's raising money online. That data in the beginning, was just so we could track what was happening in the industry, with all these offerings, because there's only a certain amount of information that the SEC collects and so we wanted to expand upon that. Have things like what industry are you in, what valuation are you does the company have if they're doing multiple rounds of financing online, that really becomes a valuable information. As this data set grew, we realized a few things. So we were just sitting in front of our computers every day looking at the new companies coming in, and we're thinking, wow, you know, fascinating company. You know, team that's got great experience. They've clearly done this before. They've raised VC capital. I would invest in them. with 8000 companies that are doing this, it gets to be a little overwhelming. So which ones do you decide to invest in? And with the beauty about machine learning and artificial intelligence and these large language models that we're seeing today is you can take data and you can feed it into these algorithms, and you can train these algorithms to look for signals depending on what you're doing.  In our case, I sat down with three PhDs that are in data science, and I said, listen, I want you to take the data that we have, and I want to develop an algorithm that compares the companies in the data set that have graduated either out of it or gone on for follow on rounds of financing at a higher valuation to companies that are coming into the data set. So when they come in, I want to look at all the data that we have on them to see if there's signals that match those companies that have gone on for great things and if there are those signals there, then we want to have that, algorithm feed us up a weekly report that tells us which companies we should apply a human layer of diligence to. Because algorithms are great when they're looking at data, but that's very quantitative. It's very black and white. What we are trying to do is use take the data, let's take the human element out of that.  A machine can do all that. You tell us which ones we should look at, and then we'll do our own human layer of diligence around it. So D3VC is an AI driven venture fund where we've taken all our data and we use it to look for deals on a weekly basis that we should be doing diligencing. And it's really fascinating. I mean, the companies that are in the data set are not startups that are unproven. These are early stage companies that have proven business models. They've got patents pending on a lot of their technology. A lot of them are at first revenue and so they're looking for money now to scale. And this is a great place to sort of play in and invest in because, if you're in this early stage investment arena, you know that early stage investment far outperforms late stage investment. I think it's 19.1% to 11.7% or something like that. So there's a there's a great delta there to get in at an early stage. So we're trying to apply AI to what we're doing with this investment thesis. That's D3VC. So the other flip side of this is, is when do I get out of these investments. You know, do I have to sit on this investment until the company has an exit, a sale, a merger, an IPO? And within the regulation that we have here in the United States, we put a 12 month holding period on these securities, after which they can be freely transferable.  Now, the problem at that point is you just can't sell it to anyone. You actually have to go through a process, and you usually list it on what we call an alternative trading system. But in order for these securities to trade on an ATS, they have to comply with state securities laws as opposed to federal securities laws. And the state securities laws require that companies do ongoing disclosures so that investors, when they're looking at a company to buy or sell that stock, they have all the information, the most recent information on them. And so GUARDD is a company, a fintech company that we built to actually collect current information on companies that want to sell their securities on these ATS's so that they can comply with state securities laws that freely allow these securities to trade in all 50 states here in the United States. So we're at this sort of, you know, convergence of data, liquidity and venture capital. And all three of them coalesce under Crowdfund Capital Advisors.

 

Craig Asano: That's awesome. So if any of our listeners like investing in investment crowdfunding companies, can they access the intelligence that's coming out of the D3VC fund, and do they just get in contact with you there?

 

Sherwood 'Woodie' Neiss: Yeah. So it's a venture fund, so like any venture fund people are investing into the fund as an LP, and so that's a typical fund structure. So you know, we talk to people all the time that are interested in that. But people can also access the information that we produce through CCLEAR through a lot of what you're seeing behind me, which are reports that we publish, we have a daily, uh, a weekly tear sheet, which is free for anyone to get that shows percentage changes and what's happening in the marketplace. We have the biweekly report that really digs into what what's happening over a two week period and compares that. You can see what's happening in terms of investors investment sentiment, deal flow. So it's high level and then we've got a monthly report that really digs into like the top ten offerings. You've got an industry breakout there where we dig into software industry and show the trends over the past 12 months in that industry or sector and we've done that for restaurants. We've done it for beverages, we've done it for health care. So that's another report that people can subscribe to. And then I think the coolest thing that we have, which is a direct correlation to D3VC is our capital pulse ratings report, and so each week that comes out with the top 15 offerings that our algorithm says that we should look at, it's not necessarily the ones that we will be investing in because like I said, we do our human layer of diligence. But it's a great tool for people that are interested in just seeing, you know, you've got an algorithm that's already looking at this. Maybe I can use that to help my investment decision.

 

Craig Asano: Fantastic. Well, I think this is a perfect segue to actually crack open that report in terms of slides and have a look at what kind of data we're tracking and, you know, get some insights in the trends. And if we have a specific question, we'll maybe just pause you here and there, but we'll spend a little time going through at a high level what your, your take on some of the key slides and where you think it's headed.

 

Sherwood 'Woodie' Neiss: Okay. Um, I think you see the whole slide thing right now. Yeah.

 

Craig Asano: Got the whole slide and, yeah.

 

Sherwood 'Woodie' Neiss: All right. So again this um, this trends report, it was it's 200 slides long. Anyone can download it. Um, that QR code will take you right to where you can download those 200 slides related to the 150 page report. It's completely free. This is an abbreviated version of it. I am just going to quickly fly through a few things on it that are of, I think, of interest, Just the highlights and this is as of December 31st, 2023, there were 6800 issuers that ran 8000 plus offerings. So that means issuers are running multiple rounds online. We're seeing that more and more, which means that people are finding investment crowdfunding to be a viable means to access capital. And right now, of course, you know, we're almost the end of March. We're over 7000 issuers. We've got 8300 deals taking place. So you can see that that compounded annual growth rate at the bottom there, that 59% is really what's happening. This industry is not slowing down. It is just getting traction. Whether you're looking at it from the number of deals, the capital that's flowing in or the number of checks that are being written. Now, again, we only focus on what's happening in the United States. So the data that you're looking at really just shows you how this is democratizing access across the United States. With 1800 cities that have been funded, we've had 2.2 billion. It's over 2.3 billion now as of March, invested into these companies that have been successful with investment crowdfunding. There's been over 2 million investors that have written checks and these companies are creating jobs and they're pumping money into local economies all across the nation. Those are two critical things that governments, local governments, state governments, federal governments should be focused on. Because if you're looking at how you can stimulate not just entrepreneurship, innovation, but jobs and economic stimulus, this is a great way to do it by promoting, investment into startups and small businesses. These companies, for the most part, when they raise capital, hire people, okay. A lot of it goes into hiring people. A lot of it goes into scaling a business. That's why so many jobs have been created. But it's not just direct jobs. It's indirect jobs that companies use because they have to have service providers come in and help them with their business. These companies are, you know, they take in money, but they've got a whole expense expense lines on their PNL statement. And those expense lines are really money that's being pumped back into these local communities, and that's really important because that money circulates in these local communities. Right now, it's about $6.8 billion annually. So you can see we're having a sizable impact on what's happening. We think, granted, our economy's tremendously huge, but $6.8 billion is nothing to sneeze at.  The other final thing on this slide that's really important to point out is these companies start at an early valuation, a very low valuation typically, and then they grow and as they hit their milestones, they can raise money at a higher valuation. So the latest valuation related to these companies that are raising money online is $75.6 billion. So what does that mean? It means that when these companies do have their exits, someone's going to get rich because that $75.6 billion is tied up, but it will be returned to investors. So we love that sort of part of the story. The other thing about this is the industry started here in 2016. So we're in our seventh year of it. If you look at venture investing, they have a 7 to 10 year horizon because that's usually when the exits start to happen. That's what we're seeing here in the United States. And so we're starting to see these companies being acquired, go public. And that's where these returns are starting to happen for investors. So we've got the 2016 vintage starting to have their exits. We're going to start seeing the 2017 and 2018 coming up. And remember I told you there's more deals happening. You know, we started with just a few deals in 2016. So you can see the velocity of the exits will be rapidly increasing over the next few years as well.

 

Craig Asano: That's fantastic. Before you go on to the next slide, just go back for a second. How supportive has the US government been to investment crowdfunding and what are they doing? Are they funding education? Are the economic development agencies involved with promoting investment crowdfunding as a source of job creation, everybody. Just looking at these numbers, I'm just interested to hear your perspective on in 2024 or maybe 2023-24, in current times, how involved is the government in promoting crowdfunding?

 

Sherwood 'Woodie' Neiss:  Not at all.

 

Craig Asano: Not at all. Okay, so that's an interesting response because through the media we've seen the original Jobs Act and we've seen an evolution of sorts. And we catch wind of the Jobs act is evolving. They're constantly tweaking the rules. And now we got a Jobs Act I think it's called 4.0 Can you provide your perspective on how that might impact investment crowdfunding markets, maybe not the, or are they more around the laws?

 

Sherwood 'Woodie' Neiss:  So currently in front of Congress, there's a bill that passed the House called H.R. 2977. And a part of it is includes improvements to regulated investment crowdfunding that would increase the cap from 5 million up to 10 million. Also have fixed some things in there that, were part of that created problems like funding portals could be liable for material misstatements but in fact, if, you know, funding portal is just a listing agent, they're not doing diligence on the details of an offering that's really for the investors or the crowd to do. So there were fixes like that in there, but the reality of things here in the United States is quite dismal when it comes to policy happening. We've got such a divided Congress. No one wants to have the other side look like they're getting a win and so this passed the House on strict party line votes, essentially. And the House is Republican controlled right now, so all the Republicans voted in favor of that, and currently the Senate is controlled by Democrats. So we are trying to get the message out there that this is good for our economy. But again, I don't think any Democrats want to show Republicans that they can have a win and so I don't think this is much opportunity for anything happening in the Senate until something changes here in the United States.

 

Craig Asano: Well, caps of issuer caps of 5 million and potentially 10 million are staggering numbers when you compare them to the Canadian, uh, investment crowdfunding landscape. So that was just one of the points that I wanted to flesh out there but okay, back to you, to the slides. Okay.

 

Sherwood 'Woodie' Neiss: All right. So let's just hit on a couple of these things. This shows you the deal flow over time. I told you in 2016, that's when the industry started, you could see that there was less than 250. It's steadily grown in 2023 was a tough year here in the United States for investing, whether you're in venture capital or in investment crowdfunding. I think a lot of these issuers saw that as well and decided to hold back on their offerings. So they're waiting to see and probably time the market. We're already seeing an uptick in 2024. So I think that issuer sentiments coming back where they'll be coming into the marketplace, more so than they did in 2023. But the industry is still growing, and we are just in inning two of this and you will see thousands of these companies raising money online. I guarantee you, within the next five years.  This slide shows you what to happen in the VC world in comparison to investment crowdfunding. The yellow line is venture capital, early stage investments as tracked by PitchBook. The blue line is deal flow activity through a regulated investment crowdfunding. So what got a little crazy in 2022 and 2023 but there's this general upward trend that we're seeing here. So VCs pulled back, but the crowd didn't in terms of wanting to invest in these deals or issuers coming into the marketplace.  These slides that I'm going to hit on next really go to prove that there was a lot of fear, uncertainty and doubt when the industry got started. And Craig, you mentioned that as well in terms of what kind of companies are people investing in? These are really risky. Maybe you shouldn't be investing in them. And then when the industry launched, we had a lot of young companies two years, less than two years old, but now we're seven years into it and the average age of a company is four years old. So the risk profile that I'm going to show you over the next few slides is changed dramatically, which means that it's a better pool for fishing in because it's less risky investments. So you can put your money in and maybe not worry so much, particularly if the companies, you know, established and they're post revenue and generating revenues. This slide just shows you how the established revenues has grown. The startup where 73%, 73.4% in 2016. That's dwindled down to 52%. You can see the established companies has grown dramatically, up to 47% in 2023. And to my point, average revenues in the beginning, these companies barely had any revenues. In 2023, they have over $1 million in revenue. That's what you want to see. You want to see a company that's proven that there's a customer that is willing to buy your product or service, and you want to invest in it. And a company that needs capital to scale and so that's what we're seeing come into this pool. These post revenue issuers in the beginning were not the majority, it was 63% Pre-revenue now it's 63% post revenue. I love pointing this stuff out. Again, less risk, less risk. Here we track in our data set, women and minority founders, 41.7% of all the offerings in 2023 had at least one woman or minority founder. I mean, that blows past what happens in Silicon Valley, where only about 2% of women are minority founders get funded. So granted, the dollar amounts are much, much smaller, and you know what VCs can do, particularly with this, the few that they invest in far eclipses what we're doing right now. But if we stay on this trend, we're just going to see a lot more capital getting into the hands of women and minorities. And we also can look at those companies and we see that they run pretty solid companies, you know, stronger revenues, less losses as well. We track annual reports for the companies that raise money online and through tracking annual reports, we can see how the revenues changed from the year in which they were funded to the following year. And what we've seen by looking at that is these companies that have been successful in their investment crowdfunding offering have seen a 284.5% increase in revenues from the year in which they raised capital to the year afterwards. So something's happening. Is it the crowd marketing for the company that's bringing more customers in that's helping increase the revenue? Is it the money that was brought in helps the company pour more into marketing and sales? Maybe it's a combination of all of that, but I don't care. All I care is to prove that investment crowdfunding leads to better results for these companies. Not only that, but these companies are sustainable. If you look at what the Bureau of Labor and Statistics says, they estimate that 50% of all new businesses fail within five years. But within investment crowdfunding, it's 17.8%. So we ran a study to look at all 6800 companies last year to see who was out of business, and we found that 17.8% of them were. So what does that mean? You're going to be most likely investing in companies that are going to stick around longer. So again, less risky. So we love these sort of data points.

 

Craig Asano: That longevity in the stronger companies that have come through, the crowdfunding, had successfully closed crowdfunding rounds. Why do you think that that is the case? Is it because they have more access to capital, or is the extra exposure and other benefits from crowdfunding?

 

Sherwood 'Woodie' Neiss: I think it's access to capital. and I'm sure there's many variables, but I think you hit the nail on the head. If you look at companies when they're trying to get a message to Washington about what they fear, and it's a lot of the times the number one thing is access to capital. So because regulation crowdfunding exists and these companies can go online and raise money from people that believe in them, we've solved that problem. And so by solving for that problem, you're not solving for it  once, these companies go on and do multiple rounds of financing online. So you're continually feeding them capital as long as they hit milestones. People don't invest in companies if they're not hitting their milestones. And all that data is there to show them. But I think to your point, yeah, it's access to capital that's keeping them going. Right?

 

Craig Asano: Okay.

 

Sherwood 'Woodie' Neiss: All right. So just a couple other slides and then we can pop out of this because I could probably talk for years. This slide just shows you how capital has been flowing dramatically into the industry. It took us five years to get to the first billion dollars invested, and then it took 18 months to get to the next billion dollars invested. It won't be long before we have $1 billion invested in one year. That might be 2024. It might be 2025 but I think we're at the cusp of doing that now. What is interesting is if you look at this slide here, this one looks at the number of checks that are written. So it really was on a high growth rate through 2021. And then we what do we have in 2022. Well we had hyperinflation. We had the Fed come in and try and fix things with the interest rate. We had supply chain issues. All of that causes concerns with investors. And so investors pulled back and we saw that in the numbers here in terms of the checks that are written. And 2023, it was it was a little better than 2022, but everyone was waiting for the markets to sort of get their footing. And we've seen that here in the United States with what's happened in our public markets. There's a delay period between what happens at a public markets and what happens in the private capital markets. So I think we're now at that point where everyone's sort of comfortable with the soft landing that we're going to have, and we'll have more checks written. But what was interesting between these two charts is even though there were fewer investors, they were writing bigger checks. And that's why we saw the dollar amounts hit all time records in 2023. So the investors that stayed in the marketplace saw companies, great companies that I'm telling you are like, these post revenue companies that have great ideas and they're placing bigger bets on it. So, you know, I'm just going to take it out of that for now just so that we can talk about things. Because I know that was a lot that I just sort of shared.

 

Craig Asano: I think it's fantastic. I mean, you have investment crowdfunding as a whole, attracting stronger companies who are getting used to this cycle of having more access to capital than they had before in the past. Simultaneously, you have more mature investors writing larger checks. And it was interesting to see I'm not sure which one of the charts, but maybe five years in to see things really ramp up. And as the as the risk profile for these types of investments have changed. And kudos to you for setting up the CCLEAR database and tracking it, and now being able to with AI on top of that. So, you know, I want to dig into a little bit that we have about 15 minutes. So let's talk I guess a little bit about the platforms. I mean, you've seen all the data. What is going on? Is it that there's a concentration of a few platforms that are handling most of those deals? Are there opportunities for new entrants in terms of a portal operator to go get licensed? What do you see happening on the platform side?

 

Sherwood 'Woodie' Neiss: So since the industry launched, there were, I think, 119 companies that have registered with FINRA to run one of these funding platforms. It's not cheap. It's I'm sure the compliance related to it can be upwards of $1 million or more a year to run one of them. So you have to think, do I have the not just the ability to put one of these funding portals together, but to sustain the cost of managing and running it? Because you're going to you're going to operate on success fees. At least here in the United States, there are 80 platforms that are still active. Out of that 119.  On a monthly basis, I would say that there's probably about 35 that are actively doing deals. But of that, 90% of the deals are happening on the top 4 or 5 platforms. And on the equity side, you're seeing that in Wefunder, Republic, and StartEngine We've got new broker dealers that are coming into the space, Dalmore and DealMaker. DealMaker is Canadian but they're making a huge presence here in the US. And then on the debt side, we've got platforms like Honeycomb and Mainvest and SMBX that are really leading the way in debt offerings for this industry. So is there a place for people to come in? Yeah, 100%. If you can capture a vertical, maybe you want to focus on veterans, maybe you want to focus on women or minorities. I think there's the ability to launch a platform and build a niche in that space that allows you to own it. But right now, we really are seeing the Wefunders, the Republics and the StartEngines owning a lot of the space in the industry.

 

Craig Asano: And some of those big players like Republic have expanded their models beyond the more traditional equity and debt. And they've gone global. Can you talk about you know us one of those portals and what is their experience from what you know, as as they enter global markets and start to compete globally.

 

Sherwood 'Woodie' Neiss: Yeah. Because, you know, so one of the things that we realized about the internet is the ability to cross, um, you know, nation, you don't have to be anywhere to get a message across. And what we're finding with these businesses is businesses solve solutions that have opportunities globally, but they also have solutions for which there's investors that are interested in investing in them globally. And so how do you deal with that when you've got securities laws that are, provincial? So what Republic and some of these other platforms are trying to do is either partner or buy platforms in other countries so that they could prepare to allow for cross investing that so they could allow for deal flow to happen from one country to another. And I think that's what Republic is trying to do. They are also expanding like you said. There is securities tokens is a big focus of what they're talking about because they see they see a lot of liquidity opportunity down the road. But the way in which you can really have easy liquidity is through tokens, because you can put it on the blockchain. And with that, you've got the distributed ledger that can sort of track what's happening, particularly when it comes to international transactions. That'll reduce the friction and the time in which you conduct these transactions. And I think that's where Republic's been focused but we're seeing a lot of these platforms trying to figure out how they can partner or expand overseas.

 

Craig Asano: Do you think that the tokenization of real world assets, which is separate from private companies and the digital securities is an area that like I just read a report this morning from, CoinGecko that provides data services in that space and it's been booming since, 2023, mostly in 2024 because the crypto investment has taken off. But do you see those tokenized models and the global liquidity and crypto as the future for investment crowdfunding, or is it going to be just a separate, stream or there'll be full integration? What do you envision say, three years out, five years out?

 

Sherwood 'Woodie' Neiss: I see investment crowdfunding as, in a way leading the charge for a lot of what will happen. It's very hard for one of these huge multinational corporations to decide to do things on the blockchain and tokenize things. I mean, where do they even start? But when you've got these startup companies that are showing promise, if you can issue securities on the blockchain and you can have them as tokens, down the road, as these companies grow and scale, you're really enabling that that mechanism under which they can raise capital and trade their securities to really grow and scale. So I think a lot of what we're seeing here in this space, and interestingly enough, in 2024, I've seen multiple token offerings happen in the investment crowdfunding space. But I see these companies strategically deciding to do that because they see what you are talking about as the future and they're preparing for that. But again, when you've got these small companies doing their initial rounds of financing, this is the time to think about that. Because later on, it's just going to be very, very challenging for these companies to do things on the blockchain and tokenize things. You know, when you've got just these cap tables that are huge and you've got a whole system and structure in place to handle it right now that is very different from what we're doing with tokenization.

 

Craig Asano: Absolutely. Each rabbit hole has its own challenges. What about the technologies? I mean, ten years back, five years back, it was pretty simple. It seemed, more advanced at the time but since then AI has exploded. There's just been a shift. What new technologies are being applied in investment crowdfunding markets? I mean, obviously from your fund perspective, the AI due diligence and almost private company stock picker, if you will. Uh, what technology? What? Let's talk a little bit about the technologies. What's happening?

 

Sherwood 'Woodie' Neiss: I mean, I think what we're doing with the venture fund is leading that charge because we see the opportunity. On how do you take these tools that are currently being developed and leverage them for better outcomes? But even within the platforms themselves, there's a lot of compliance that is that goes with these offerings, and so you've got companies like KoreConx out there that are developing solutions that so once you do your raise, you can manage your cap table. You can communicate with your investors. So I've seen a lot of technology development happen in that arena, which I think is great because it doesn't just apply to companies raising money through investment crowdfunding. You know, if you have investors and you need to communicate with them, any of these technology tools will help. But, you know, that's really where I've seen the majority of it. I mean, were there other areas that you were seeing things?

 

Craig Asano:  Not specifically. I We just want to get your perspective while we have this time on where it's going. We're really talking about the future. We've got data to provide answers to almost all the questions that have popped up over the last ten years. So we're in a pretty good situation, I would say, uh, in particular, well the projects that you're involved with. One question. often we get calls from new grads, from innovators. They are always looking for new opportunities. And do you think in the investment crowdfunding space, there's specific set of skills or what sort of advice would you give for, the job opportunity. Folks are looking for for jobs. So where do you see do you see that as something that will continue to grow? Is it is it an area of focus? What sort of advice can you provide to someone looking to get into the market and get a job and get their start?

 

Sherwood 'Woodie' Neiss: I mean, there's so many different areas to look at it. I told you about the 310,000 jobs that have been created through this industry. So you could just look on these platforms to see which of the companies that are raising $1 million, and start looking up their email addresses and seeing who they're hiring, I think that might be the quickest way to a job. Just because they've got the capital to now hire employees. But all of these platforms themselves to have teams that work for them. So, if you just Google any of the, you know, 120 platforms that are out there, you can start going through that roster, particularly for in the tech side of things, this is this whole industry is tech-enabled. So you could reach out to the platforms themselves and look for jobs too. And then there's just so much opportunity in the compliance side. When you and when you put these offerings together, in many cases you will need a CPA review. So, oddly enough, and I don't know how many accountants are listening to this, but you can make a ton of money through regulated investment crowdfunding.  At least here in the United States because if they require CPA reviewed financials, it's not a full audit, but they're charging $3,000 a pop to do that. And you can do hundreds of those, and make a lot of money just by doing those. If you're a lawyer, you can work with either the issuers themselves or the platforms themselves. I know we've seen individual lawyers make a name for themselves as the crowdfunding lawyers. So that's an important thing. And then there's just experts in the field, like people want to know what are best practices. How do I launch a campaign or an offering that's going to attract people's attention and raise the most money? That's where you can work with us on the data, and become a partner that way. And go out there and then market your services, as someone that can help people succeed with their offerings.

 

Craig Asano: Yeah. No. It's fantastic. Well, I see we've only got about five minutes, 4 or 5 minutes left. I want to move to our favourite part of the show. We do the rapid. one answer responses. We're sort of expecting quick questions. I think we got a good sense that it's good to be in in investment crowdfunding. It's growing. There's a ton of opportunities in the U.S. Canada's got a long way to to go. Maybe it's a whole another show on how we we ramp things up here. But in terms of rapid fire questions, are you ready for a handful of quick questions and expecting some quick answers? So let's do it here. So in in a word, how would you describe the future of investment crowdfunding?

 

Sherwood 'Woodie' Neiss:  Optimistic.

 

Craig Asano: Optimistic. What is your go to financial app? One that you use all the time?

 

Sherwood 'Woodie' Neiss:  Probably my bank app.

 

Craig Asano: That's not a fintech, a bank app. Okay. If you got good bank apps.

 

Sherwood 'Woodie' Neiss: I think I'm on it every day.

 

Craig Asano: Okay. Fair enough. So you got to count all the money. So, In a word, what drives you every morning? What helps you get out of bed?

 

Sherwood 'Woodie' Neiss:  Honestly, do what you love type of thing. It helps that we wrote the law. It helps that we were there from the beginning. I find this whole industry fascinating. I'm very passionate about it and so it's the desire to see this industry scale grow and succeed.  That keeps me going.

 

Craig Asano: I love the fact that you stuck with it. You made the law, and here you are today.   Both of us in some capacity for a decade. More than a decade on. You know, it's incredible. Last rapid fire question. Can you recommend  a hot book, a favourite movie? Something for for our listeners. They might want to check it out.

 

Sherwood 'Woodie' Neiss: I mean, everyone should read Crowdfund Investing for dummies.

 

Craig Asano: Did they update it? I mean, you wrote that a decade ago.

 

Sherwood 'Woodie' Neiss: I know, I know.  You know what? They didn't update it only because when they told us they wanted they wanted us to write it in 2013.  We said, well, the industry hasn't gone live yet, so we're going to be writing a book for which there is no industry yet. Maybe we should wait until the industry goes live. And our publisher said, no, the way we work is we get the book out now. And so the book came out and people weren't buying it because the industry hadn't launched. And so when the industry launched, we're like, we need to update it with the new rules and everything like, but nobody bought the book and I was just like, oh God.

 

Craig Asano: It's time to hit the Publisher again.

 

Sherwood 'Woodie' Neiss: And so if anybody wants to write the second version of the dummies guide with us, please let me know.

 

Craig Asano: Well, on behalf of our listeners before we let you go, you got to tell everyone how to get in touch with you, Woodie. If they've got questions or they're interested in getting involved, investing in the fund. How do they get in touch?

 

Sherwood 'Woodie' Neiss:  So for the venture fund D3VC.ai is where you can learn about that. For Crowdfund Capital Advisors, it's crowdfundcapitaladvisors.com. And if you want any of these reports or any of the data associated with it, go to CCLEAR.ai  and on all those websites you can find information about ordering reaching out to us or getting in touch.

 

Craig Asano: Fantastic. Yeah. I'll be sure to include these in the show notes. I want to thank you on behalf of all our listeners here at Fintech Fridays for your time and your insights, Woodie, as usual. kKeep killing it out there. It's amazing to follow and support where we can. So, you're obviously welcome back anytime. Thanks a lot for being, an advisor at NCFA for many, many years, and I'm sure for many more years to come. So, with that, I think that's a wrap for this episode. so thanks again for coming.

 

Sherwood 'Woodie' Neiss: Thanks, Craig. Thanks, everyone.

 

Craig Asano: No, absolutely. So, before we close, I just want to say, if you're new to Fintech Fridays, please check out any of the past incredible episodes. They're all on the website. I think you'll be surprised with what you find. We're always bringing on, fintech founders or investors talking about a topic of the day that is going to help you grow and deeply understand a particular sector or maybe your business. So thanks for listening. We'll tune in next Friday for another episode of Fintech Fridays. Thanks a lot, Woodie. Have a good day. Thank you.

 

Outro : you've been listening to Fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and Fintech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit ncfacanada.org.

 

End of Podcast

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NCFA Jan 2018 resize - Fintech Fridays EP62:  The Future of Investment Crowdfunding: Innovations, Data, and OpportunitiesThe 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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Usage of AI: From Virtual Dealers to Predictive Analytics in Canadian iGaming

April 5, 2024

The Canadian gambling industry has advanced significantly over the past few years. Technology advancements, like artificial intelligence, have played a major role in the growth of the industry. As more online casinos embrace AI technology, they are finding new ways to improve the online experience.

AI can play a vital role in the security of gambling sites. With 24/7 monitoring, suspicious behaviour can be detected immediately. This technology can also be used to expand the game selection in live casinos by developing virtual dealers.

Want to learn more about how AI is affecting the online casino industry? You’re on the right page. Keep reading as we cover the key ways the Canadian gaming industry is putting AI to use.

Virtual Dealers in iGaming

Let’s start with virtual dealers. Many Canadians enjoy joining virtual rooms where they can play along with other gamblers against a live dealer. While these games provide a lot of fun online, there are some flaws that can be worked out with AI technology.

For example, AI dealers can be utilized for game rooms with faster play. Of course, speed of game play is a personal preference. Players who want to join in a room with others, but want to play instant games may prefer using AI-driven live casinos.

With AI, players won’t have to wait on dealer changes or other interruptions. They can log on and enjoy uninterrupted games with other gambling enthusiasts.

AI-driven Customer Experience

AI can be used to enhance the gameplay for each individual player. The algorithm is used to adapt to members’ patterns and behaviour. By analyzing these factors, online casinos can tailor the experience for each member. This allows everyone that uses the platform to have an easier time finding games that match their interests.

It’s not just the gaming section where AI gets put to use. This technology can also improve the customer support experience. According to the experts at CasinoRIX CA, many online casino live chats are launched by chatbot.

When customers initiate a chat, they will have to wait in queue for the next available agent. A chatbot is used to scan the customer’s inquiry and if possible, provide a detailed answer or a link to a page with information that can help them. Some platforms even use this technology to help link customers to the right support agent.

Predictive Analytics for Player Retention

Imagine logging into an online casino, and all of your favourite themes and software developers are up front and center for you to choose from. The casino industry has tens of thousands of games to choose from and hundreds of reputable software providers that supply them. AI can collect data on players’ behaviour analytics and patterns by curating the best selections.

This can be a game-changer for both the player and the online casinos. When members get bored of a game, they tend to abruptly stop playing and leave their casino accounts dormant. This technology can be used for churn prediction.

Basically, to prevent the casino members from abandoning the online casino, this technology is used to pick up on the members’ patterns. When casinos target patterns early enough, they can use strategies (ie suggested games or tailored promotions) to keep the members interested.

Responsible Gaming Measures

Whether you’re logging in to place a quick CFL sports bet or using a Canadian online casino to play your favourite slot games, responsible gaming measures are crucial. Some people are concerned that the rise of AI technology might be used to keep vulnerable players lured into the service. But it’s actually being utilized to do the opposite.

One of the issues with online casinos vs land-based casinos is that there is nobody to monitor the scene. Land-based casino employees are familiar with regular patrons and can keep an eye on the scene to monitor for suspicious behaviour. AI algorithms can be utilized to detect early signs of problematic gaming behaviour. This can be a huge step forward for online casinos to intervene.

Future Prospects and Conclusion

As AI technology makes its way into the online gambling market, there will be some significant changes that will improve the experience. This technology can be used to create a variety of thrilling games that will keep players interested.

See:  Walmart Files Several Crypto, NFT and VR Gaming Patents

Casino members will also be able to enjoy a more personalized experience based on the games that interest them. However, what really impresses us about this technology is how it's used to monitor the service for safety, security, and protection.


NCFA Jan 2018 resize - Usage of AI: From Virtual Dealers to Predictive Analytics in Canadian iGamingThe 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, artificial intelligence, 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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Coinbase Gains Restricted Dealer License in Canada

Release | April 4, 2024

83 percent of G20 Regulating Crypto - Coinbase Gains Restricted Dealer License in Canada

Image: Coinbase Blog, Major Hubs Legislating Crypto

Coinbase's Strategic Expansion into Canada's Crypto Market

"Today we’re excited to share a crucial milestone in Coinbase’s journey in Canada. Coinbase has officially been registered as a Restricted Dealer by the Canadian Securities Administrators (CSA). This makes Coinbase the largest and first international cryptocurrency exchange registered in Canada."

On April 3, 2024, Coinbase shared the achievement of a key milestone on it's blog announcing that it has 'officially been registered as a Restricted Dealer by the Canadian Securities Administrators (CSA), [making them] the largest and first international currency exchange registered in Canada."  View the release here.

See:  Tax Tips for Canadian Crypto Users in 2024

  • Coinbase's registration as a restricted dealer by the CSA is a result of nearly three years of diligent work, particularly with the Ontario Securities Commission. This achievement follows Canada's new guidelines introduced last year for crypto exchanges, which mandate registrations and impose investment limits for certain investors.
  • Canada presents a significant market opportunity for Coinbase, ranked as the third-most crypto-aware nation globally. With a highly educated and technology-savvy population, Canada is ripe for cryptocurrency adoption. Coinbase's registration makes it the largest and first international cryptocurrency exchange in Canada, poised to make digital economy access easier for millions.
  • A survey conducted by Coinbase in partnership with Angus Reid highlights that 72% of Canadians consider regulation of cryptocurrency exchanges important. Furthermore, nearly a third (29%) of Canadians would be more inclined to buy cryptocurrency with more industry regulation.
  • Coinbase's commitment to Canada extends beyond regulatory compliance. The launch of Interac payment rails, in partnership with Peoples Trust, enables seamless transactions for Canadian users. Moreover, Coinbase's CEO Brian Armstrong's engagement with the local tech community and the establishment of a Canadian tech hub with nearly 200 employees signify a deep investment in Canada's digital asset ecosystem.

Lucas Matheson, Coinbase Canadian Country Director:

"We've made it a priority to work closely with regulators in key countries as part of our international growth. Over the last year, we've obtained registrations in France, Spain, Singapore, Italy, Ireland, and the Netherlands. Adding Canada to this list is a huge moment for Coinbase, and one we are very proud of."

See:  OSC: 2023 Canadian Crypto Survey Insights

Outlook

The registration with the Canadian Securities Administrators (CSA) aligns with Coinbase's "Go Deep" growth strategy and is in line with the broader trend of crypto platforms seeking legitimacy and trust through regulatory approvals en-route to the mainstream adoption of digital assets globally.


NCFA Jan 2018 resize - Coinbase Gains Restricted Dealer License in 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, artificial intelligence, 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 Most Exciting iGaming Trends To Watch Out for in 2024

March 27, 2024

Freepik rawpixel.com AR VR - The Most Exciting iGaming Trends To Watch Out for in 2024

Image: Freepik/rawpixel.com

Canadian iGaming has exploded these last few years. At the pace the development is moving, and with AI as a complimentary tech, it’s safe to say we have more innovation coming in 2024.

Most of these, according to specialized finance site eCheckCasinos.ca will touch on fintech and player experiences. A report they published explains how Canadian iGaming regulation in Ontario is paving the way for new technologies and improvements. Their report is here.

Without further ado, here are the most exciting iGaming trends to look out for.

1)  The Rise of Crypto and Blockchain Casinos

The growth of cryptocurrency and blockchain in iGaming is a major event. Online gambling platforms that welcome cryptocurrency payments have been growing in popularity. It is expected that they will become more popular this year. Crypto casinos offer anonymous digital wallet transactions for gaming. Also, immediate deposits and withdrawals 24/7. Plus, reduced fees and fully transparent game results. You can actually verify each outcome on the blockchain.

One other technology that will for sure get its way into iGaming is smart contracts. This self-executing code on the blockchain runs when preset conditions are fulfilled. It automatically dispenses winnings. This adds security and efficiency to iGaming.

2)  The Importance of Community Engagement

If you’ve been following the success of stake.com you know that community is key. Their lively community is the number one reason for their success. They offer weekly live streams, a huge Discord community, a player forum and live chat where users can chat with each other 24/7. This brings the whole player base together and forms a community that tends to keep players on the site. If you ask us, this is a big brain move, and other operators such as Rollbit have now taken after this success.

These operators really know how to unite fans around their games and brand. These are the casinos that will likely get the best results in 2024. At the same time, those who fail to build and unite their community, most likely are going to lose their position on the market.

3)  Impressive Growth of Esports Betting

Due to the overall popularity of competitive gaming, esports is going to increase its significance and popularity in 2024. An estimated 600 million people will watch soon. Platforms are paying more attention to expand their esports betting. They want to attract more users.

For instance, fans can place bets on particular pro games or even various gameplay metrics, such as the specific number of points by a player. Professionals know esports attracts and encourages a younger audience to gamble. It lets them enhance and showcase their gaming wagering options better.

4)  Fraud Prevention with AI and Biometric Security

The volume of iGaming network transactions is increasing. AI and biometric security will become more common. They will improve customer safety and reduce fraud.

AI and machine learning directly control the cash flow at sportsbooks and internet gaming at a high level. AI systems will instantly tell security teams about any suspicious patterns.

Also, fingerprints, faces, and voices will be the main ways to verify accounts. Biometric verification speeds up registration and login. It does so due to its hands-free nature. It also increases the protection against unauthorized account access.

5)  Compliance and Regulation Technology

As countries consider iGaming laws, RegTech use will be essential for operators in 2024. RegTech refers to solutions designed to help companies rapidly adhere to new or existing laws. It typically involves automation of compliance-related processes.

For instance, real-time transaction monitoring helps find payments that break anti-money laundering (AML) laws. Automated suspicious activity report technologies ensure reports are consistent. They go to regulators like FINMA or the Curacao Gaming Control Board. Enforcers adjust access with geolocation and identity checks. They do so to enforce licensing needs in restricted areas or games. Few sectors have compliance requirements as stringent as and as diverse as iGaming. Integrating and automating RegTech will also cut infractions and penalties. This will enhance public confidence.

6)  Virtual Reality Games and Experiences

Affordable VR devices are out now. Many people know about iGaming. This makes 2024 a breakout year for VR casino games. Developers are aggressively working to expand libraries of immersive slots, table games, and live dealer titles. They will work on titles that work with hardware like Meta Quest headsets.

VR gaming provides unprecedented engagement and fun. This makes online operators eager to diversify. They want to meet fan expectations. Expect VR-specific bonus deals and tournaments intended to attract more players throughout the next year.

7)  Anonymous iGaming through Mix Networks

In 2024, iGaming platforms found a great solution. It is mix networks, also known as mexnets. This was in response to growing concerns over cybersecurity and privacy across digital channels. This technology is a third party service. It enables anonymous communication and transactions.

Crypto casinos permit secure circulation of digital currency. They do not share senders' or receivers' wallet addresses at any point. Not only does this approach increase the level of privacy for all parties involved, it acts as an additional protection against potential hacking attempts focused on account access too.

As anonymity gains appreciation across the internet community, mixnets offer a way for users to keep control over their digital footprint within iGaming as well.

8)  Artificial Intelligence Assisted Gameplay

Given the seemingly infinite progression of machine learning, AI-based player tools will prove to be game-changers by 2024. Without exception, AI platforms will allow even casual players to see into the future by empowering their decision-making capacity with real-time prognostications.

While at the moment the technology is not widely used, you can expect offerings in this niche to increase rapidly over the next year. Developers are exploring AI assistance across major verticals like poker, blackjack, sports betting and daily fantasy sports. Partnerships with top gaming providers signal strong confidence in commercialization of interactive AI gameplay improvements moving forward.

9)  Rise of Multi-State Compacts

For U.S. sports betting, 2024 ushers in a new era of multi-state compacts between operators. These agreements allow brands to pool player communities across different states while collaboratively working to expand regulated betting access countrywide.

Regarding players, it allows for more increased and competitive odds and massive contests. Simultaneously, for operators, it enables a better possibility to oversee their platforms and pubic services. Moreover, strategic connections reduce barriers to negotiate gaming licenses on a large scale . Currently, there are only a few significant compacts, but their number will explode due to multi-sided enthusiasm.

While only a few key compacts exist currently, their popularity is set to erupt given mutual drive for stakeholders. With seven states left to legalize wagering, joint efforts facilitate broader availability.

10)  Mainstream Adoption of Wearables

Wearable devices have floated around the periphery of the iGaming tech sphere for years now. Advancements in miniaturization, connectivity and reliability finally enable smartwatches, AR glasses and fitness trackers to smoothly integrate with sports betting apps in 2024.

This provides the ability to discreetly monitor odds, place wagers via voice and view critical match data in real-time. All without pulling out a mobile device. And it also provides comfort for users who want to stay updated no matter the situation or their surroundings.

This hands-free versatility aligns with expectations of tech savvy users looking to enhance their viewing experience. With open API architecture and surging watch ownership, the stage is set for wearables to stand out as a definitive iGaming focal point over the next year.

Closing Thoughts

The pace of development across online gambling platforms continues to accelerate breathtakingly. While niche sectors like blockchain iGaming and simulated betting have existed for some time now, there are also a number of relatively new and unknown trends that are set to become mainstream in 2024.

See:  Future of Web3 Gaming: Play-to-Own (Ecosystems)

With incredible opportunities on the horizon, we’re eager to see brands across casino, sportsbook and casual gaming fields capitalize in their own unique ways. One thing remains certain - the victory will belong to operators who are able to swiftly adapt and cater to emerging user preferences through focused innovation.


NCFA Jan 2018 resize - The Most Exciting iGaming Trends To Watch Out for in 2024The 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, artificial intelligence, 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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A Guide To Responsible Gambling at Ontario Online Casinos

March 21, 2024

Unsplash Jack Hamilton Ace of spads - A Guide To Responsible Gambling at Ontario Online Casinos

Image: Unsplash/Jack Hamilton

People who love games of chance usually love seeking entertainment from online casinos (as long as it is done responsibly). However, sometimes the thrill of cashing losses and trying to win big can lead to excessive use. That is exactly why the Alcohol and Gaming Commission of Ontario (AGCO) has introduced safety measures. The measures usually refer to the operators who are required to have a license and must implement responsible gambling measures for the sake of user protection. Also, there are some steps players can take, and this article will give you an insight into the responsible gambling practices in the province.

Regional Initiatives

It is obvious that the gambling industry is on the rise in Ontario. Since the market is controlled and regulated, various initiatives promote responsible gambling, and it is all supported by the AGCO - the province’s regulator.

For example, the OLG (Ontario Lottery and Gaming Corporation) created a program called PlaySmart. This program is designed to provide users with valuable and crucial information about making smart choices while gambling online. Also, there are similar initiatives that the Responsible Gaming Council (RGC) created. Additionally, the AGCO created a system where each operator has to provide its members with simple access to responsible gambling tools, resources, and literature. Finally, online casinos must have measures in place that can help identify potential problem gamblers on the platform.

How to Gamble Responsibly in Ontario

The officials have certainly done their part to promote responsible gambling in the province, but there are other things that you - as a player - can do.

Choose Reputable Operators

Whether you are new to online gambling or not, you should only opt for operators that have a license and a good reputation. But, finding such casinos can be through, and that’s why many players rely on unbiased and reliable review websites where they can find the most reliable online casinos in Ontario. Review websites are there to provide their honest and expert opinion, and all operators they recommend are bound to keep your data safe and game fair. Using such resources will help you pinpoint the operators that are actually worth your time. You can even compare different casinos based on relevant industry criteria.

Carefully Plan Your Bankroll

Before you embark on your online gambling journey, take the time to create a reasonable budgeting strategy. You can create a daily, weekly, or monthly budget, and make sure to stick to it, regardless of the results. Remember, you should never gamble more than you can actually afford to lose.

Limit the Time You Spend Playing

Gambling should always be something you do for entertainment only, and in order to keep it that way, you should define daily or weekly time limits that will keep it from affecting your personal life. In Ontario, licensed operators are obliged by the AGCO to offer each player the option of setting time limits. But besides the on-site scheduling, it is very important for you to learn when to take a break and simply walk away. Chasing losses is one of the most damaging things you can fall for. That is why you should learn how to resist the temptation of trying to win back the funds that you lost.

Focus on Games You’re Familiar With

Even though it is fun to explore new categories and titles, you should spend the majority of your time and budget on the games you actually know well. So before you decide to place a wager, you should already be familiar with the rules and odds of that particular title. And if you need more time to master the basics, you can always play more demo rounds that will help you gather experience in a risk-free way.

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Online gambling is a legal practice in Ontario, so the locals engage with their favourite games in a regulated landscape. Besides the licensing procedures and requirements, the AGCO is also in control of important safety practices designed to promote responsible gambling. Additionally, there are some extra steps that players can take to stay safe, and now that you learned all about them, you have a good understanding of responsible gaming on the web.


NCFA Jan 2018 resize - A Guide To Responsible Gambling at Ontario Online CasinosThe 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, artificial intelligence, 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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A Guide to No Deposit Casinos for New Players in Ontario

March 19, 2024

Unsplash Vikas Makwana 3 Aces - A Guide to No Deposit Casinos for New Players in Ontario

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Today’s online casinos frequently attract new players with exciting rewards and promotions. Even though punters are fond of all sorts of freebies, no deposit offers are surely among their favourites. As the name suggests, such rewards can be claimed without putting any real money into the online gaming account. Players in Ontario love discovering fun no deposit casinos and that is why we created this quick guide that will teach you all there is to know about them.

The Benefits of No Deposit Casinos

No deposit casinos are an excellent opportunity for punters to engage in risk-free gaming. They can easily try out different games and discover new favourites, all without any financial stress. Also, playing without real money wagers allows the users to master game rules and even develop some innovative strategies, depending on the category they opt for. Another great benefit is that these casinos are easy to find. By reading online reviews and doing quick research, iGaming Ontario casinos, no deposit offers will be just a few clicks from you. Finally, as a new player, you can take the time to explore the services and features provided by the platform and then see whether it’s actually a good fit for you.

How to Find the Best Operators

Before you look for anything else, make sure you’re dealing with a trusted provider. For that purpose, find a stamp of approval that confirms that the business holds a valid license issued by AGCO (Alcohol and Gaming Commission of Ontario). However, not all the platforms will keep your personal and financial data equally safe. That is why you should only focus on operators that use advanced encryption tech such as SSL, and additional features like 2-FA (two-factor authentication). Next, pay attention to game certifications issued by software companies like GLI and BMM Testlabs that assure both safety and fairness. Finally, even though no deposit casinos do not require money transactions at the very beginning, later on, you will want to have a few reputable options for both deposits and withdrawals. The leading platforms support the use of wire transfers, Mastercard, Visa, Skrill, PayPal, and even cryptocurrencies.

Tips for Maximizing the Experience in No Deposit Casinos

Once you find the operator you’re interested in, you will be ready to employ the following strategies that will help you make the most out of playing in no deposit casinos:

Read the Terms and Conditions

Before you pick a deal that seems great to you, take a moment to look into the terms and conditions that govern its use. By doing so, you will know exactly what to expect from each promotional activity. Pay special attention to the wagering requirements, as well as any time limits that might restrict your success. No deposit casinos usually feature wagering requirements that range between 40x and 60x. If the offer you’re looking to claim comes with more rigorous requirements, consider finding another one as you may not be able to meet such demands and access your winnings before the time runs out.

Look for High RTP Games

The RTP stands for the return-to-player percentage, so the games where this value is high actually come with better odds of winning over the long term. As such, they also increase the likelihood of you scoring a win through the use of no deposit rewards. Luckily for you, there are many exciting titles out there where the RTP goes well over 96% so you can easily include them in your gaming routine.

Consider Volatility

Volatility is another factor that will impact your potential to win in no deposit casinos. To be more precise, games with higher volatility tend to result in unpredictable winnings. For example, virtual slot machines are generally known as the most volatile category in the world of virtual gambling. So even if you’re genuinely passionate about slots, try to find titles that are less volatile than others.

See:  What Will Gaming and Video Entertainment Be Like in 2030?

Online wagering is one of the favourite pastimes of many locals in Ontario, and the majority of them are drawn to the appeal of no deposit casinos. Such platforms come with a number of benefits, and now that you learned how to find the best ones, you are ready to get into the world of valuable no deposit offers.


NCFA Jan 2018 resize - A Guide to No Deposit Casinos for New Players in OntarioThe 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, artificial intelligence, 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 History of Tribal Casinos and Their Digitalization

March 18, 2024

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Image: Pixabay/Foundry

If you are looking for information about why you can't find many tribal online casinos in the USA, then you're in the right place because we have the answers.

The intricate relationship between American Native tribes and gambling is a multifaceted subject that intertwines legal, economic, and cultural threads. Continue reading more to learn everything we know about online tribal casinos.

Historical Background

Gambling among Native American tribes has existed for centuries as part of their cultural practices. Games of chance and skill were not only forms of entertainment but also held social, spiritual, and economic significance. They were often used in ceremonies and as a means of settling disputes.

However, the perception and role of gambling shifted dramatically following European colonization. The imposition of foreign laws and the establishment of federal and state regulations overshadowed the indigenous traditions of gaming.

The legal landscape for tribal gambling in the United States began to change significantly in the late 20th century. The pivotal moment came with the Indian Gaming Regulatory Act (IGRA) of 1988, which established the framework for the development of gambling operations on tribal lands.

This legislation recognized the authority of Native American tribes to operate gaming facilities under certain conditions, aiming to promote tribal economic development, self-sufficiency, and strong tribal governments.

For many tribes, the introduction of casinos and other gaming establishments has been transformative. The revenues generated from gambling operations have funded tribal government operations, social services, education, and healthcare programs.

Furthermore, casinos have become significant employers within many tribal communities, offering job opportunities to both Native and non-Native people.

Major Tribal States in the Gambling Industry

Several tribal states have emerged as key players in the American gambling sector, operating some of the largest and most successful casino resorts in the country. These include:

  • The Mashantucket Pequot Tribal Nation in Connecticut
  • The Seminole Tribe of Florida
  • The Navajo Nation

For many tribes, maintaining control over their gaming operations is a form of sovereignty and self-determination. It allows them to preserve cultural traditions, invest in the revitalization of their languages and customs, and strengthen their communities from within.

Moreover, the relationship between Native American tribes and gambling is not without its challenges. Issues such as problem gambling, the potential for increased crime, and the complexities of managing commercial enterprises that are also cultural assets continue to be subjects of discussion and concern within tribal communities and among policymakers.

The Biggest Tribal Casino Properties in the USA

The United States is home to some of the world's most significant and successful tribal casino properties. These establishments not only serve as major entertainment and gaming destinations but also as critical economic engines for their respective Native American communities.

Here's a closer look at some of the largest and most influential tribal casinos in the USA.

  1. WinStar World Casino and Resort - The Chickasaw Nation, Oklahoma
  2. Foxwoods Resort Casino - The Mashantucket Pequot Tribal Nation, Connecticut
  3. Mohegan Sun - The Mohegan Tribe, Connecticut
  4. Tulalip Resort Casino - The Tulalip Tribes, Washington
  5. Pechanga Resort Casino - The Pechanga Band of Luiseño Indians, California

These tribal casino properties are more than just gaming and entertainment venues. The casinos are vital to the economic prosperity and social welfare of their tribal communities.

The revenues generated support a wide range of tribal government initiatives, including education, healthcare, and cultural preservation programs. Furthermore, these casinos are among the largest employers in their regions, providing thousands of jobs to both Native and non-Native individuals.

The success of these establishments also serves as a testament to the entrepreneurial spirit and resilience of Native American tribes.

By leveraging their sovereign status and embracing the opportunities within the gaming industry, these tribes have created sustainable economic development paths that benefit their members and the broader community.

The Challenges and Considerations of Tribal Casinos Going Online

The digital transformation has reshaped many industries, including the gambling sector. While online gambling has seen significant growth globally, most tribal casinos in the United States have remained primarily focused on their land-based operations, with notable exceptions like the Seminole Tribe in Florida.

Several factors contribute to this phenomenon, reflecting a complex interplay of legal, regulatory, economic, and cultural considerations.

The most significant barrier to tribal casinos expanding into online gambling is the complex legal and regulatory environment in the United States. The Indian Gaming Regulatory Act (IGRA) of 1988, which governs tribal gaming, does not explicitly address online gambling.

This leaves a gray area that complicates the ability of tribes to offer gambling services over the Internet.

Furthermore, any move towards online gambling requires navigating not only tribal regulations but also federal and state laws. Each state has its own set of rules regarding online gambling, and not all states allow it. For tribal casinos to operate online, they must comply with the legal frameworks of the states in which their potential customers reside, complicating the expansion of their gaming operations to the digital realm.

Tribal casinos have traditionally been significant economic engines for their communities, providing funding for various social services, education, and healthcare programs.

The transition to online gambling presents economic uncertainties. There are concerns about cannibalizing the revenue from land-based casinos, which are not only gaming facilities but also tourism and cultural attractions that employ thousands of individuals.

Moreover, the competitive landscape of online gambling, dominated by established global operators, poses a significant challenge for tribal casinos. Entering this market requires substantial investment in technology, marketing, and compliance infrastructure, which may not be feasible or attractive for all tribes.

For many tribes, the operation of casinos is an exercise of sovereignty and self-regulation. Moving to an online platform presents challenges in maintaining this sovereignty, especially when navigating the patchwork of state regulations. There's also a concern about losing control over the gambling environment and ensuring that it remains a benefit to the tribal community rather than a liability.

Cultural values and the social impact of gambling are also significant considerations for many tribes. The expansion into online gambling raises concerns about problem gambling and its potential social consequences. Many tribal leaders are cautious about adopting online gambling without strong mechanisms to promote responsible gaming and protect their community members.

The Seminole Tribe of Florida: A Notable Exception

The Seminole Tribe of Florida's foray into online gambling, particularly through their Hard Rock Digital arm, represents a pioneering move among tribal casinos. Their success has been facilitated by a combination of factors, including the tribe's strong economic foundation, legal acumen, and strategic partnerships that have allowed them to navigate the complexities of online gambling regulations effectively.

See:  What’s Driving Wealth Management Trends for 2024 How to get into angel investing with ‘no’ money

However, their path has not been without challenges, including legal disputes and the ever-evolving landscape of state gambling laws.

​​While the success of the Seminole Tribe in Florida illustrates the potential for tribal engagement in online gambling, it also highlights the complexities involved. As the gambling landscape continues to grow, tribal casinos may gradually explore online opportunities, carefully balancing economic potential against the imperative to protect their sovereignty, community values, and social welfare.


NCFA Jan 2018 resize - The History of Tribal Casinos and Their DigitalizationThe 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, artificial intelligence, 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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