Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Online Funding / Investing Portals
Andressen’s Shoutout Boosts AI Powered VC Fund to $100M
AI VC Fund | Oct 31, 2024
Image of DAOs.fun website
Andreessen’s Shoutout Pushes AI-run VC Fund "ai16z" to Nearly $100M
An AI run venture fund "ai16z" sparked a wave of excitement in the tech and crypto worlds following a shoutout from Marc Andreessen. The fund’s market cap surged to nearly $100 million before stabilizing at approx $25 million at the time of writing. Daos.fun blends AI with community input (read: DAO) where users can setup their own funds and invest alongside algorithmic guidance.
- Daos.fun lets people set up their own crypto VC funds offering a leaderboard and community. ai16z was launched by an AI and is meant to mirror Marc Andreesen's investment moves. The fund stands out because it's basically run by artificial intelligence. Andreesen, one of the world's best known investors , noticed ai16z and give it a shoutout on social media driving the market cap up to $100 million.
See: Retail Investors to Drive Growth in Private Assets Under Management Expected to Reach $18.3 Trillion by 2027
- So how does it work? Well the fund’s AI takes suggestions from DAO members who come together to form a type of 'trust market' where top advisors/investors with a track record of providing successful tips gain more influence and weight in decision making.
- Daos.fun is a platform where users fund projects by buying tokens that they can redeem if the fund's market value rises. The platform is currently in beta but has garnished a lot of attention as it combines elements from popular meme coin sites like Pump.fun and combines it with a funding model.
Conclusion
While Daos.fund seems like a type of blockchain- based, tokenized crowdfunding model, the ai16z fund highlights how AI and decentralized finance approaches can mash together to transform project based liquidity and fund management. More AI funds will no doubt emerge and their impact on traditional venture capital and crypto investing may grow. Of course, investors should research legalities of participating in such models and accept that these investments are very high risk.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, 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 Teams Up with CFL as Crypto Scores Big in Canada
Coinbase in Canada Announcement | Oct 25, 2024
AI Image
Coinbase Partners with CFL and Grey Cup to Bring Crypto Closer to Canadians
Today, Coinbase announced a Canadian sports partnership with the Canadian Football League (CFL) and the 111th Grey Cup (2024 championships), which will delight many football and sports fans. Coinbase, a major crypto exchange in the United States, recently expanded to Canada and is operating with a restricted dealer license.
Coinbase is also forming business partnerships North of the border including one with Balance, an Alberta-based digital asset custodian for institutional investors, financial institutions, and high net worth individuals. Canadians have seen major crypto firms sponsor sports organizations in the U.S., such as crypto.com arena in Los Angeles (formally the Staples Center) and perhaps now with Coinbase's partnership, other crypto-related firms may be motivated to strike big partnerships with other sports teams in the country.
Goals of the Partnership
The goal of course is to raise awareness and exposure to a new audience, and make digital assets more accessible to a broader Canadian audience (currently there are about 5 million Canadians who use crypto).
- Coinbase is collaborating with the CFL to help more Canadians better understand and use cryptocurrency including for digital payments and other transactions.
- At the Grey Cup fans will enjoy special crypto giveaways, digital collectibles (limited edition NFTs - see NBA topshot), and interactive games. These experiences are all about making it fun to learn about digital currencies.
See: Resurgence of Cryptoassets in Canada’s Investment Landscape
- Coinbase will offer educational resources, workshops, and live demonstrations during the Grey Cup to show how digital currencies work and why they are important.
Why the Partnership Matters
This partnership strengthens Coinbase's commitment to playing a key role in making crypto a bigger part of daily life in Canada, and offers fans a unique opportunity to engage in the world of digital assets while enjoying one of Canada's major sporting events. From sporting events to using digital currency for payments, the outlook for crypto in Canada just got brighter.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, 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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Impact of Online Sports Betting on Canadian Businesses
Oct 23, 2024
Image: Freepik/viarprodesign
Online sports betting in Canada has undergone a seismic shift, especially since the legalization of single-event sports betting in 2021 and the opening of Ontario’s competitive iGaming market in 2022. It has reshaped the gambling landscape and sparked significant changes in how businesses across various sectors operate in Canada.
Online sports betting has far-reaching consequences for the Canadian economy, from creating new jobs and boosting provincial revenues to influencing media advertising.
A Boon for Employment and Revenue Growth
One of the most tangible impacts of online sports betting is its significant contribution to employment. A study conducted in Ontario after the first year of its iGaming market highlighted that the industry had supported more than 12,000 full-time jobs. Many of these roles were tied to companies that opened offices in the province, such as Score Bet and PointsBet.
With salaries in the iGaming sector averaging around $103,000 annually, the job market has seen a boost, particularly in tech, marketing, and operations. The revenue from online sports betting has been staggering, too—Ontario alone reported more than $35 billion in total wagering and $1.4 billion in gaming revenue in its first year.
Notably, the provincial and federal governments are also benefitting. Ontario generated approximately $469 million in additional provincial revenue, while the federal government and municipalities saw gains of $238 million and $54 million in the same period.
Media and Advertising Revenue Surge
With the rise of online sports betting, Canadian media companies have found a new revenue source. Advertisements for sportsbooks and casinos are ubiquitous, especially during live sports broadcasts. This surge in ad spending is highly lucrative for television networks, digital media platforms, and streaming services. The influx of gambling-related ads has helped to offset revenue declines faced by traditional media outlets, particularly as viewers shift from cable TV to online streaming.
However, this has not been without controversy. Many are concerned about the sheer volume of gambling ads, especially given their appeal to younger audiences. Regulators are under increasing pressure to strike a balance between allowing advertising and protecting vulnerable viewers from potential gambling addiction.
Expansion of Digital Payment Systems
The rapid growth of online sports betting in Canada has spurred a significant demand for reliable and efficient digital payment systems. As more Canadians place bets online, the need for secure, fast, and flexible payment methods has skyrocketed. Alberta sports betting platforms, in particular, are responding to this demand by continually expanding their payment options to accommodate a diverse customer base.
Payment processors, e-wallets, and fintech companies have quickly adapted, developing solutions tailored specifically for the betting industry. This has led to a broader ecosystem of digital payments, benefiting businesses specializing in financial technologies.
Sports betting platforms in Alberta, like many across Canada, now offer a variety of payment methods, including PayPal and Interac, making deposits and withdrawals faster and more seamless. By providing such flexibility, Alberta's betting platforms ensure they cater to the needs of all types of customers, enhancing the overall betting experience.
Integration of Sports Betting into the Entertainment Ecosystem
Sports betting and entertainment have become deeply intertwined in Canada, reshaping how fans engage with their favorite sports. Online betting platforms now offer live, in-play betting, allowing users to wager on real-time events as the game unfolds. The interactive model boosts user engagement and significantly increases the time fans spend watching games.
Many sportsbooks and online casinos have partnered with sports teams and leagues, using cross-promotion to drive fan engagement. These collaborations, ranging from sponsorship deals to exclusive promotions, have helped make sports betting a more mainstream activity. This convergence is also a boon for sports organizations, which benefit from higher viewership and new sponsorship deals.
Small Businesses and Local Tech Sectors Benefit
One of the more subtle impacts of online sports betting is the indirect boost it provides to small businesses and local tech firms. Startups specializing in app development, cybersecurity, and digital payment processing have seen increased demand from betting operators looking to optimize their platforms and ensure regulatory compliance.
Many of these companies have emerged as critical partners for larger gambling operators, providing the technological backbone for seamless betting experiences.
The influx of global players into the local market has led to numerous B2B opportunities in Ontario. As sportsbooks expand their operations, they rely heavily on local tech expertise, further stimulating economic activity beyond the immediate gaming industry.
Final Thoughts
Ontario’s success in launching a regulated iGaming market has put pressure on other provinces to follow suit. While most Canadian provinces continue to rely on government monopolies for gambling, the competitive market in Ontario has shown that regulated sports betting can bring significant economic benefits, including job creation, tax revenue, and a reduction in offshore betting.
See: What Gaming Can Teach You About Investing in Fintech
The model’s success has led industry leaders to advocate for a broader adoption across Canada. There’s an underlying belief that opening up the market nationwide could reduce the volume of offshore betting and ensure that more revenue stays within Canadian borders.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, 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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Online Casino Regulations in Canada
Oct 21, 2024
Image: Pixabay/geralt
Online casino regulations in Canada present a unique and varied landscape. Since 1985, the Canadian government has allowed provinces to create their own gambling regulations. The most significant development came in 2022, when Ontario fully legalized online gambling by creating its own licensing and regulation system for online casinos and sportsbooks. This move made Ontario a key player in the online gaming industry, setting a standard for other provinces to follow.
Despite Ontario's advancements, the rest of Canada still exhibits a complex regulatory environment. Provinces have varying degrees of control, leaving Canadian players confused due to different rules across the country. Casino games like blackjack and slots are widely available, yet the legality of engaging with offshore online casinos remains a gray area.
For Canadian players, understanding these regulations is crucial. By navigating the legal framework, players can enjoy their favorite casino games within the bounds of the law.
Overview of Gambling Laws in Canada
Gambling laws in Canada are shaped by both federal and provincial governments, with regulations specified in the Canadian Criminal Code.
Federal and Provincial Jurisdictions
- Federal Government: The Canadian Criminal Code sets the baseline for all gambling activities, prohibiting unauthorized gambling but allowing provinces to regulate certain forms.
- Provincial Governments: Each province has the authority to create its own regulations, overseeing lotteries, casinos, and online gambling within their borders. Ontario, for example, has its own rules and licensing system for online casinos and sportsbooks.
History of Gambling in Canada
- Pre-1970s: All forms of gambling were illegal in Canada.
- 1970s Reforms: The Criminal Code was amended to permit provinces to oversee and conduct lotteries.
- Recent Developments: In 1985, provinces gained control to manage online gambling, setting the stage for localized regulation.
Legal Framework and the Criminal Code
The Canadian Criminal Code outlines what types of gambling are permitted and under what conditions. Specific sections allow provinces to license and regulate gambling activities. Both federal and provincial authorities enforce these laws, with penalties including fines and imprisonment for illegal operations.
Licensing and Regulation of Online Casinos
Canadian online casinos are regulated by both national and provincial laws. Authorities like the Kahnawake Gaming Commission play a significant role in licensing, while concerns exist for offshore casinos operating in the Canadian market.
National vs. Provincial Licensing
In 1985, the federal government gave provinces the authority to regulate gambling. Each province now has its own set of rules for online casinos:
- British Columbia and Ontario have comprehensive licensing structures.
- Quebec and Manitoba also have detailed frameworks for legal online gambling.
- Other provinces may rely on third-party licenses to permit online casino operations.
Regulatory Authorities in Canada
- Kahnawake Gaming Commission (KGC): Based in Quebec, it licenses numerous online casinos globally.
- Alcohol and Gaming Commission of Ontario (AGCO): Regulates online gambling in Ontario.
- Other provinces have their own regulatory bodies, such as the British Columbia Lottery Corporation (BCLC).
These authorities ensure casinos adhere to local laws and maintain fair play.
Legitimacy and Offshore Online Casinos
Many online casinos operate from foreign jurisdictions but offer services to Canadian players. While these offshore casinos can be legitimate, they are not bound by Canadian regulations, leading to potential risks. Players should always check for KGC or provincial certification before engaging in any online gambling activities.
Gambling Products and Games
Canada offers a wide variety of online gambling products and games. Whether interested in slots, table games, or sports betting, Canadian laws regulate these activities at the provincial level to ensure a safe experience.
Diversity of Online Casino Games
Canadian players can access a diverse range of games, including poker, bingo, and lotteries. In addition to classic games, many platforms offer live dealer options like live dealer blackjack and roulette. Mobile gaming has also risen, allowing players to enjoy games on the go.
Slots, Table Games, and Betting
- Slots: These range from simple three-reel slots to elaborate video slots.
- Table Games: Popular games include roulette, blackjack, and poker.
- Sports Betting: Includes major sports like hockey, football, and basketball, with live betting features.
Game of Chance vs. Skill
Online casino games are divided into games of chance and games of skill. Slots and roulette rely on luck, while poker and blackjack involve strategy, offering players more control over the outcome.
Player Protection and Responsible Gambling
Online casinos in Canada operate under strict regulations to ensure player safety and promote responsible gambling. Multiple initiatives are in place to protect players and maintain fair play.
Responsible Gambling Initiatives
- Self-Exclusion Programs: Allow players to voluntarily ban themselves from gambling platforms.
- Betting Limits: Control how much money a player can wager to reduce the risk of excessive losses.
- Educational Resources: Casinos provide help lines and information on recognizing problem gambling behavior.
Security Measures and Player Safety
Canadian online casinos prioritize security, using advanced encryption technologies like SSL (Secure Sockets Layer) and two-factor authentication (2FA). Legitimate online casinos must also hold licenses from recognized authorities, ensuring they operate under strict protocols to maintain fairness.
Dispute Resolution and Player Resources
Canadian online casinos offer dispute resolution mechanisms, with third-party organizations like eCOGRA stepping in to mediate. Players can access 24/7 customer support through live chat, email, and phone to address concerns.
Emerging Trends in Canadian Online Gambling
The Canadian online gambling market is evolving rapidly due to advancements in technology and international regulatory models.
Evolution of Gambling Technologies
Technological advancements, such as virtual reality (VR), augmented reality (AR), and blockchain technology, are transforming the industry. Cryptocurrencies like Bitcoin are increasingly accepted by online casinos.
Impact of International Regulation Models
International models from the UK, Gibraltar, the Isle of Man, and Curacao influence Canadian regulations. These regions set high standards for licensing and consumer protection.
Future of Online Gambling in Canada
The future of online gambling in Canada is promising but complex. Legislative changes are expected to provide a clearer framework, and more provinces may regulate online gambling independently. Responsible gaming efforts are also intensifying, with advanced AI tools helping identify problem behaviors early.
See: A Look Inside 2024 DIY Investing Trends in Canada
As the industry continues to adapt, Canadian online gambling will likely align more closely with global trends.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, 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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Marathon Bitcoin Miner Ventures into Whisky Barrels
Tokenization | Oct 9, 2024
Image: Freepik/bearfoto
Marathon’s Anduro Takes Tokenization to Bitcoin with Whiskey Pilot
Marathon Digital Holdings is breaking ground into tokenization with its latest venture, Anduro under the Avant platform which was created in partnership with tokenization specialist Vertalo. The project plans to tokenize real-world assets (RWAs) on the Bitcoin blockchain starting with whisky barrels where investors can purchase and exchange fractional ownership via the platform.
This project is part of a growing trend in Bitcoin's ecosystem where RWA's that are non-digital and non-financial are being converted into tradeable tokens and then offering them to investors as an investment, store or value or utility.
See: Coingecko 2024 Report: Investing in Tokenized RWAs
Although tokenization for RWAs has been widely used in Ethereum and Solana, Bitcoin has been slower to include the smart contract capability that enables this kind of tokenization. Things are starting to change with the creation of platforms like Avant.
For miners like Marathan who are experiencing reduced income from decreased block rewards as a result of the latest Bitcoin halving, they are incentivized to look for new sources of revenue, which can lead to the incubation and/or launch of some exciting projects.
Several Tokenization Platforms Driving Industry Forward
While Anduro and Vertalo are tokenizing on Bitcoin, several other platforms are leading the charge across various asset classes and blockchain networks:
- Ondo Finance tokenizes U.S. Treasury bonds and money market funds in the Ethereum ecosystem and offers low-risk asset tokenization to both institutional and individual investors looking for safe and liquid assets.
- Maple Finance offers blockchain-based credit solutions and decentralized liquidity pools, enabling lenders and borrowers to engage in tokenized RWAs like Treasury bills.
- Centrifuge is tokenizing invoices and receivables (similar to 'invoice factoring' in traditional terms), which allows companies to use these assets as collateral for loans.
- Tokeny specializes in compliant digital securities and the infrastructure to safely issue and manage tokenized assets. Institutional investors choose its platform because it incorporates several blockchains, such as Ethereum and Tezos.
Beyond Whisky
Various asset types are expected to be digitized over the next few years. Below are a few of the asset classes that are ripe for tokenization and digital markets.
See: How Fintechs Are Unlocking Value in Private Markets 2024
- Real Estate
- Precious Metals
- Art and Collectibles
- Bonds and Securities
- Commodities
Tokenizing the Future
Tokenization offers new liquidity, transparency, and inclusion in financial markets, making it very interesting for fintech startups and investors in communities such as NCFA Canada. Tokenization is one of the most significant financial trends to monitor as blockchain technologies innovative new use cases for both buyers and sellers.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, 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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What Gaming Can Teach You About Investing in Fintech
Oct 8, 2024
Image courtesy of Rawpixel.com
The fintech industry has been growing at an unprecedented rate of late, fueled by rapid advancements in technology, changes in consumer behavior, and increasing demand for digital financial services. With innovations such as blockchain, Artificial Intelligence, and digital banking reshaping how financial transactions are conducted, fintech has become a crucial part of modern investment portfolios. Investors are drawn to fintech due to its potential for high returns, market disruption, and opportunities to tap into emerging markets.
However, as with any fast-paced sector, navigating fintech investments requires not just financial acumen but a strategic mindset. Interestingly, many of the strategies that can help you maximize investing in fintech can be gleaned from the gaming world. Whether it's video games or the concept of gamification, you’ll find the sector offers valuable insights into qualities that are just as important in the investing world.
From decision-making to risk management, this article will delve into several lessons from the gaming industry that can help fintech enthusiasts achieve their investment goals.
Image courtesy of Rawpixel.com
Learn to be Adaptable
The ever-popular Real-Time Strategy (RTS) genre is one that stands out for developing a flexible and adaptable approach in gamers. Games like StarCraft II require players to quickly adapt to changing circumstances, balancing long-term strategic goals with meeting immediate needs (such as threats from opponents). Flexibility is essential here, as rigid adherence to just one strategy quickly leads to defeat.
Fintech investors face a similarly dynamic landscape, influenced by shifts in technological innovation, consumer behaviors and regulatory frameworks. For instance, a promising fintech startup might experience rapid growth, only to be disrupted by a newer, more innovative competitor—or hampered by regulatory changes. Investors who can adapt to these changes, such as by reallocating capital or simply staying informed about market developments, are more likely to succeed.
Managing Risk
Risk management factors into quite a few modern-day gaming genres, but for our next lesson let’s turn to the centuries old world of poker. Here in the digital age, poker has become a key vertical in the online gaming sector, with digital platforms making it easy to learn poker and get involved in casino games. If you’ve played the game before, you’ll know that you’re constantly faced with situations that involve weighing the odds of success against potential losses.
Poker players are expert multi-taskers—making decisions based on incomplete information about their opponents' hands, assessing probability, placing calculated bets and controlling their emotions (even in the face of a big loss) in every game. The most successful players are those who understand when to take risks and when to fold, since no single hand can make or break their overall success.
This is a lesson we can apply directly to investing in the fintech space. Although brimming with opportunities, the sector is also fraught with risks. Savvy investors should be assessing these risks and deciding how much capital to allocate to specific investments. Just as in poker, overcommitting to one startup or app could lead to significant losses if it doesn’t pan out.
Behavioral Finance
Gamification—the use of game-like elements in non-gaming contexts—has become a popular tool in fintech. Many fintech platforms use this to engage and retain users: encouraging them to save, invest, or make smarter financial decisions through points systems, badges, and other incentives. Far from being another gimmick, this is a strategy that’s rooted in behavioral finance, where psychological factors can influence financial decision-making.
As a budding fintech investor, it’s a good idea to develop an understanding of gamification as a way of evaluating the potential long-term success of a new entrant. A platform that effectively uses gamification to drive user engagement and retention is likely to have a strong competitive edge. By studying how fintech companies apply gamification principles, investors can gain insights into which companies are most likely to capture and retain users in the long term.
You can even apply gamification techniques directly to your own investing strategies. Things like setting personal goals, tracking progress and using financial tools that gamify the investment process can help you stay motivated and engaged. Try using apps that track portfolio performance and provide incentives for hitting milestones.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, 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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Why Ontario Limited Partnerships Are Ideal for Private Funds
Private Fund | Oct 7, 2024
Image: Freepik/vectorpouch
Ontario LPs Are a Great Option for Private Funds with Strong protection, Tax benefits, and Simplicity
This article is based on an informative Torys LLP article titled "Ontario: A Globally Favoured Jurisdiction for Private Funds". Using a private fund to pool investments and manage assets for early stage venture capital, real estate, or other financial purposes is common but how does one determine the best jurisdiction when setting up the fund?
See: The Rise of Private Markets and Opportunities for Fintechs
According to an informative Torys LLP article titled "Ontario: A Globally Favoured Jurisdiction for Private Funds", both Canadian and international funds are increasingly using an Ontario Limited Partnership (LP) as a legal framework due to it's advantages over popular jurisdictions like Delaware, the Cayman Islands, Manitoba and Quebec. Below is an overview of some important considerations for fund sponsors. Additionally, we ask ChatGPT to objectively evaluate ranks across jurisdictions for easy comparison.
Why Ontario Limited Partnerships Are Popular
Sponsors prioritize a number of goals when establishing a private fund, including safeguarding investors, reducing tax obligations, maintaining compliance, and creating an effective structure. Here are some core reasons why Ontario LPs are becoming a popular option for setup.
- In Ontario, there is strong limited liability protection given that investors who are limited partners are typically solely responsible for the obligations of the partnership up to the amount they have contributed. As long as partners do not actively participate in running the company, this rule shields them from personal liability.
- Limited partnerships in Ontario are regarded as tax-transparent, which means that the partnership does not pay taxes on its own. Rather, income is passed on to the partners, who are subject to separate taxes according to their respective tax laws and statuses. This makes it easier to manage the fund's finances and prevents double taxes.
See: Operating an investment fund in Ontario
- Ontario is a respected and stable jurisdiction due to its robust legal system. In contrast to certain tax havens like the Cayman Islands, Ontario's transparent legal and tax system complies with international norms and reduces investor reputational concerns.
- Using online filing to set up an Ontario LP is simple and typically takes less than a day. LP agreements are confidential and do not need to be made public, and there are few responsibilities for ongoing compliance.
Comparing Ontario to Other Jurisdictions
So how does Ontario's case for a private fund setup as a Limited Partnership compare with other popular jurisdictions being evaluated. On a scale from 1 (weak) to 10 (strong), each characteristic is ranked.
| Feature | Ontario (Canada) | Delaware (USA) | Cayman Islands | Manitoba (Canada) | Québec (Canada) |
|---|---|---|---|---|---|
| Limited Liability Protection | Strong protection (9) | Strong, with liability tests (8) | Strong, but potential risks (7) | Very strong, public disclosure (10) | Strong under civil law (9) |
| Tax Transparency | Tax-efficient, transparent (9) | Transparent, US tax rules (8) | Transparent in most places (9) | Similar tax treatment (9) | Transparent, similar to Ontario (9) |
| Reputation and Compliance | Stable, low scrutiny (10) | Reputable, but complex (7) | Seen as a tax haven (6) | Stable, limited recognition (8) | Reputable, with added requirements (7) |
| Disclosure Requirements | LPA private (9) | LPA private, with filings (9) | LPA private, minimal filings (9) | Public LP identification (7) | Public disclosure of key LPs (6) |
| Ease of Formation | Quick, online setup (9) | Fast, some requirements (9) | Simple but varies (8) | Straightforward (8) | Requires French name (7) |
| Ongoing Obligations | Minimal compliance (9) | Annual filings (7) | Limited compliance (8) | Public filings, changes tracked (7) | Language and disclosure requirements (6) |
| Dissolution Process | Simple process (9) | Cancellation certificate (9) | Varies, generally simple (8) | Requires public filing (8) | Formalized, additional steps (7) |
| TOTAL SCORE | 64 | 57 | 55 | 57 | 51 |
Comparative Insights and Anlysis
- Ontario offers Balance and Efficiency (64 points)
Ontario is a great option for private funds because of its effective compliance, transparent taxes, and strong limited liability protection. Because of its simple incorporation procedure and ability to avoid the reputational risks of tax havens, it is very appealing to both Canadian and international fund sponsors. - Delaware has a Strong Legal Framework but More Complex (57 points)
Delaware's strong legal system makes it a popular jurisdiction. Its liability tests are more complicated though and there are annual reports and compliance requirements that can take a lot of time.
See: OSC Activates 3 New Interim Class Orders to Boost Early-Stage Capital
- Cayman Islands is Tax Efficient but has Reputational Concerns (55 points)
The Cayman Islands offers simple compliance procedures and are tax-efficient, however they are scrutinized from regulatory bodies given their reputation as a tax haven deterring some investors. - Manitoba has Strong Liability with Public Disclosure (57 points)
Manitoba scores a perfect 10 with regards to strong limited liability protections. However, not all funds that want privacy will find it perfect as it necessitates the public disclosure of limited partners and their capital contributions. While some fund sponsors/funds may benefit from increased transparency, many investors value privacy and can be put off. - Québec has Strong Legal Protections with Added Complexity (51 points)
Similar to Ontario, Québec offers strong safeguards but with extra restrictions, such as the LP must have a French name and disclosing some of its partners to the public. Although this makes it a good option for people with Québec connections, these extra complications may make Ontario a better option for those without Québec connections.
Conclusion
Ontario ranks highest with a total score of 64 striking a balance across legal, tax, and operational aspects making it the preferred jurisdiction for many fund sponsors. While Delaware and Manitoba offer similar legal protections, Ontario’s low setup compliance, positive reputation, and tax transparency give it a slight edge. Important to note the difference between setup of a private fund in Ontario versus obtaining any required operational license. Best to consult a securities lawyer.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, 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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