Rojin Nair, Advisor
June 1st, 2021
At Incyub8 Inc, Rojin is focusing on nurturing and guiding various national and international start-[...]
Category Archives: Online Funding Portals
UK Revenue-based Lender, Outfund, raises £115m Series A
London Loves Business | Apr 27, 2022
Outfund are changing the way online businesses raise funds, today announces the close of a £115M Series A round of equity capital and debt amount. The funding round was led by Force Over Mass, PostFinance, 1818 Venture Capital and Tribe Capital, and will support Outfund’s rapid global growth as it provides a faster, fairer and more affordable way for SMEs to raise growth capital across the globe. With this new investment, Outfund is pledging to invest more than £500m of lending to over 5,000 businesses in the next 12 months, and will increase its lending limit to £10m per company.
See: Corl raises $20 Million USD to expand Revenue-Based Financing in North America
Outfund can deploy between £10,000 and £10million of funding, and is available to businesses that take online payments, have a minimum of £10,000 monthly turnover, and have been trading for at least six months. Only simple checks are required to access capital and there is no need for companies to provide business plans or go through prolonged risk assessments. Businesses simply connect their revenue accounts and, with access to this data, Outfund will build a funding offer and deploy the same day.
Unlike conventional business loans, Outfund ensures the time taken to repay is based on each businesses’s circumstances, with an agreed revenue share creating flexibility for founders. Outfund’s revenue-share percentages are set to ensure each business maintains a healthy cash flow in its day-to-day operations; the better the company does, the better Outfund does. For the first time, the funding balance between a company and a lender is equal.
See: Debt vs. Equity Financing: Pros And Cons For Entrepreneurs
Outfund’s technology takes the bias out of lending and improves financing terms, with analysis based solely on a business’ revenues and performance. 20% of Outfund’s portfolio are female founders, a testament to their commitment to advancing the democratisation of access to capital. Its advanced algorithm pulls information from multiple data sources to determine how a company performs, and is then able to de-risk the proposition. This allows more affordable funding, with longer payment terms and a flat fixed fee from 2%, making it the most competitive offering in the market.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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FINRA Fines Wefunder $1.4 Million and StartEngine Capital $350,000 for compliance violations
Finra | Press release | May 4, 2022
WASHINGTON, May 04, 2022--(BUSINESS WIRE)--FINRA announced today that it has fined two FINRA-registered funding portals a combined $1.75 million for failing to comply with securities laws and rules designed to protect crowdfunding investors. In settling these matters, Wefunder and StartEngine accepted and consented to the entry of FINRA’s findings without admitting or denying them.
Jessica Hopper, Executive Vice President and Head of FINRA’s Department of Enforcement:
Today’s actions highlight FINRA’s vigilance over this developing area of securities regulation and our unrelenting focus on investor protection.
FINRA regularly examines and conducts ongoing surveillance of funding portal members to determine compliance with FINRA's funding portal rules and SEC requirements. The Wefunder and StartEngine matters both originated from FINRA’s examination program.
See: US Investment Crowdfunding Exemptions Explained
In the Wefunder matter, FINRA found that from 2016 through 2021, across 39 separate offerings:
- Wefunder raised approximately $20 million more than permitted under crowdfunding raise limits. It did this by diverting the excess funds raised in the crowdfunding offering to a subsequent offering conducted under a different exemption from registration. FINRA found that by doing so, Wefunder exceeded the scope of its permitted activities as a funding portal
- Failed to promptly direct the transmission of funds to issuers or investors as required
- Improperly sent emails to hundreds of thousands of investors recommending and soliciting investments being offered on its portal in violation of a rule that prohibits such solicitations; included misleading communications on its funding portal website
- Failed, in multiple respects, to maintain a reasonable supervisory system to supervise its business, including, for example, its process for tracking investments.
As part of the settlement with Wefunder, the portal will be required to retain an independent consultant to make recommendations to improve its systems and procedures.
See: Reg CF: Investment Crowdfunding Tops $1 Billion on Heals of Funding Cap Increase
In the StartEngine matter, FINRA found that at various points between November 2016 and January 2018:
- StartEngine included issuer communications on its funding portal website that it knew or had reason to know were false or misleading
- Posted its own inaccurate counts of the number of investors in the offerings on its portal
- Failed to reasonably supervise potentially misleading issuer-prepared content
For example, one issuer, whose product was a home robot, exaggerated the robot’s level of functionality in a demonstration video posted on the StartEngine website. The video depicted the robot independently performing tasks such as waking sleeping family members, teaching a child piano and art, projecting a recipe onto a cutting board, patrolling a home for intruders, adjusting a thermostat and playing peek-a-boo with a child. During the offering, StartEngine received information that caused it to know or had reason to know that these claims were exaggerated and misleading, but it failed to correct them. Although a disclaimer on the offering page noted that the robot was a work-in-progress, it was insufficient to remediate the misleading content.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Vancouver Proptech Startup addy Launches Canada’s First Crowdfunded Real Estate Investing App
Techouver | Apr 21, 2022
Vancouver proptech startup addy has launched Canada’s first crowdfunded real estate investing mobile iOS app.
addy believes in real estate for everyone with a crowdfunding platform that breaks down traditional barriers to real estate investment.
As an addy member, you can invest in institutional-grade commercial real estate (e.g., entire apartment buildings, commercial complexes and business parks) across Canada for as little as $1, enjoying fractional ownership without any work and a possible return on your investment.
See: How Proptech is changing the real estate industry
Using the addy app, Canadians get notified when a new property drops, connect with their growing community on Discord, and unlock the new addyverse – a digital twin of all of your addy investments.
Micheal Stephenson, CEO and co-founder of addy:
“We wanted to bring the accessible investing experience we’re known for closer to our members through a mobile app. From your palm, you can now invest in a commercial complex, business park, or apartment building alongside thousands of other community members. We are thrilled to offer Canadians a simple and fun way to start building their financial future with real estate.”
addy’s real estate deals are generally not available to the average Canadian, they simply trade from one wealthy individual to another and are never listed publicly.
See: Should I invest in real estate crowdfunding in Canada?
addy has listed 25 properties and counting on the addy platform and has raised over $10 million from thousands of Canadians, with a total asset value of nearly $500 million. Residents of Alberta, British Columbia, Ontario and Quebec over the age of the majority can become an addy member for $25/year.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Lending Loop Launches ‘Loop Card’ for Small Business Cross-border Transactions
Betakit | | Apr 21, 2022
Lending Loop has launched Loop to provide a wider range of financial services for e-commerce businesses. The company’s first product is a corporate card specifically for cross-border transactions. The card allows companies to purchase in multiple currencies without fees. It also provides an extended repayment grace period, and credit limits based on sales rather than personal assets, which is often the case when entrepreneurs look to access corporate cards through banks.
In pivoting from lending to a broader financial services play, Loop has entered an increasingly competitive market. In the United States, well-capitalized players like Brex, Ramp, and Jeeves have created corporate cards tailored to startups. And in Canada where the market is still fairly bare, up and comer Float has attracted more than 1,000 customers in the last year alone.
See: Fintech Card Space is Growing: Brim Financial, Float, Caary Capital, Jeeves, Neo Financial
However, Pastoll is adamant that Loop’s product is different from the others, specifically targeting Canadian-based e-commerce businesses that are doing business internationally.
“Our product is specifically built for this customer segment that is doing business cross border,” said Pastoll. “And we’re understanding the two key things: working capital and needing to move money seamlessly and cost-effectively around the world. Those are like core tenants that are important to e-commerce businesses.”
Businesses can spend and make payments in CAD, USD, GBP and EUR currencies without foreign exchange rate conversions and fees. The Loop Card also provides 55 days of interest-free spending, which the startup argues is the longest interest-free period in the industry.
See: Fintech Fridays EP46: Making Business Borderless: International Payments and Partnerships
“The reason we’re offering that value prop is because we listened to e-commerce founders and heard, ‘I need the ability to basically push my expenses down the road so I can grow my business,’” said Pastoll.
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View the Lending Loop press release --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Support NCFA by Following us on Twitter!Follow @NCFACanada Not to be missed! Registration NOW OPEN! |
Fintech Fridays EP57: 10 Years of Investment Crowdfunding: Past, Present & Future Since the JOBS Act
About NCFA Canada | Craig Asano | Apr 11, 2022
Apr 8, 2022: NCFA's Fintech Fridays podcast episode 57
10 Years of Investment Crowdfunding: Past, Present & Future Since the JOBS Act
About this episode:
10 years ago in 2012, the Jumpstart Our Business Startups Act (JOBS Act) was signed into law in the U.S. (and eventually a similar exemption was approved in Canada) to encourage more capital to flow to startups, support innovation, and, create jobs. It's significance cannot be understated as the rule change allowed private companies to raise capital by selling securities digitally for the first time via registered online platforms and dealer-brokers. Regulation crowdfunding also democratized previously excluded retail investors (non-accredited) by allowing them to invest directly in startup ventures empowering a new era of digital finance.
See: Crowdfunding is Now a Serious Way for Private Ventures to Raise Capital
A tremendous amount of advocacy and regulatory change efforts took place to make this happen, and since then the original JOBS Act rules have been improved for investment crowdfunding in the U.S., such as increasing the fundraising cap from US$1 million to US$5 million (not in Canada though, we've asked for years ahem).
But there are still many challenges and myths to be debunked. While venture financings are at an all time high in sectors like fintech, it does not mean that startups are awash with capital. While there is growing interest among retail investors to participate directly in these offerings, and take control of their investment future, education and awareness still remains a top priority if industry is to grow in the right ways. Having said that, in the United States, RegCF recently surpassed $1billion raised. Canadian figures are more modest with at least $100 million in equity financings raised on a leading platform.
Today there's also a JOBS Act 2022 proposal on the table but will these changes be sufficient to support evolving technologies and their capabilities while also protecting investors? Regulatory change is slow and regulators should support innovation and competition. All stakeholders need to continue to support efforts to make capital markets whole, so EVERYONE can benefit from the advancements in technology or the wealth gap will continue to widen.
This is a not to be missed episode for anyone interested in the past or future of digital finance and capital markets. Join investment crowdfunding pioneers in both Canada and the U.S. who discuss the 10 year journey from a wide variety of perspectives including the evolution of first generation marketing platforms to the arrival of second generation decentralized finance models powered by blockchain technologies.
Duration: 92mins
Timestamps:
00:00:00 NCFA Fintech Fridays Intro
00:00:17 Craig Asano, NCFA Canada
00:02:06 Andrew Dix, Crowded Media Group
00:02:49 Sherwood 'Woodie' Neiss, Crowdfund Capital Advisors
00:03:32 Kim Wales, CrowdBureau Corp
00:04:23 Alixe Cormick, Venture Law Corporation
00:04:13 Peter-Paul Van Hoeken, FrontFundr
00:05:48 Alan Wunsche, Tokenfunder
00:08:21 RegCF advocacy (SEC, Congress, White House)
00:10:47 Designing the framework
00:11:58 Purpose of the JOBS Act
00:15:10 Road to Equity Crowdfunding in Canada: Change is hard (and long)
00:26:22 Blockchain finance: education and regulatory challenges
00:33:38 Crowdfunding’s Impact and opportunity: first US$1 billion
00:38:39 RegCF to digital finance
00:41:57 Evolution of digital finance Gen1 to Gen2
00:49:23 Digitalizing private capital markets
00:55:03 Ontario’s exemption 45-108 setup to fail
00:59:46 JOBS Act 2022 bill proposed to improve rules in the U.S.
01:00:10 Canada harmonizes equity crowdfunding rules Sep 2021
01:04:00 Educating regulators
01:06:00 Regulators need to support innovation and competition
01:09:00 Financial inclusion
01:11:00 Canadian ECF $100 million and beyond
01:17:00 Decentralized Finance is the future
01:19:00 Convergence and reducing wealth gaps
01:23:00 Regulatory culture change and sandbox
01:25:00 Capital markets need to work for everyone
01:30:00 Closing remarks
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Support NCFA by Following us on Twitter!Follow @NCFACanada Not to be missed! Registration NOW OPEN! |
JOBS Act of 2012: Ten Years of Legalized Investment Crowdfunding
Crowdfund Insider | | Apr 5, 2022
NCFA: Congrats JOBS Act and to everyone who moved the needle back then and continues to move the needle now. This was the catalyst to peer to peer platform finance, emergence of 'arm chair dragons', VC as-a-service, and to the popularity and growth of AltFi and Fintech broadly
The JOBS Act of 2012 was signed into law by President Barack Obama ten years ago today, on April 5, 2012. In a rare moment of bipartisanship, Republicans and Democrats joined together to help private firms raise much-needed growth capital via online securities offerings.
Under the new rules, Regulation Crowdfunding (Reg CF), and Regulation D 506c were created. Regulation A (Reg A+) received a key update for a securities exemption that effectively no one used prior to the JOBS Act. Firms using these exemptions were initially able to raise up to $1.07 million using Reg CF and up to $50 million under Reg + – from both accredited and non-accredited investors. Reg D 506c, approved online capital formation from accredited investors. A new financial intermediary was created as well. Funding Portals, a new type of intermediary, are FINRA regulated platforms that are legally able to issue securities under Reg CF (along with regulated broker-dealers).
See: Crowdfunding is Now a Serious Way for Private Ventures to Raise Capital
Now, becoming law did not mean these new rules were immediately actionable. It took the Securities and Exchange Commission years to complete everything. It was only in mid-2016 that the SEC approved the final rules for Reg CF.
Last year, the SEC improved securities crowdfunding rules by raising the Reg CF funding cap from an anemic $1.07 million to $5 million – far more in line with seed rounds. Reg A+ got some attention too as issuers are now able to raise up to $75 million in a min-IPO type offering. There were other improvements too.
Today, securities crowdfunding platforms have raised over a billion dollars – creating new jobs and allowing younger firms – frequently outside established tech hubs – to raise growth capital.
Around the beginning of 2022, CI connected with Sherwood “Woodie” Neiss, Principal at Crowdfund Capital Advisors and a key proponent in the creation of the JOBS Act who was there when the bill was signed into law, said the industry is at a tipping point as investors backed startups at a record pace during 2021. Neiss said that the online capital formation sector is “accelerating as we’ve never seen” before.
Sep 2013: Why is September 24th a Huge Day for Entrepreneurs? Title II of the US JOBS Act and Crowdfunding for Accredited Investors Begins
We reached out to Neiss earlier today for his thoughts on the ten year anniversary of the JOBS Act, he shared:
“It is hard to believe that ten years ago today, we were sitting in the Rose Garden as President Obama signed Regulation Crowdfunding and the JOBS Act into law. Tearfully, I sat there as he called the work that we did walking the halls of Congress, lobbying, testifying, and negotiating the final framework for Investment Crowdfunding a “gamechanger.” Today, like a proud parent, I look over the industry data, and I see how thousands of innovative pre-IPO startups and small businesses all across the United States have been able to turn to a new pool of investors … the American people.”
See: US Investment Crowdfunding Exemptions Explained
“I’m humbled that it has already become a billion-dollar industry; how we delivered on what we promised: a balanced way for entrepreneurs to raise necessary money from willing investors while providing investors with the disclosures the regulators wanted them to see and guardrails to mitigate losses; and how it will forever change the way companies are funded going forward,” he added. “At the same time, I realize there is still much to do, and our work is not done. We will continue to be a champion for the industry, collaborate with the regulators and help scale our nation’s entrepreneurs so anyone with a great idea and a passionate group of investors can perhaps become the next unicorn!”
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Support NCFA by Following us on Twitter!Follow @NCFACanada Not to be missed! Registration NOW OPEN! |
Coinbase Complies: Starting Apr 4 Monitor Canadian Transactions Above CA$1,000
Crypto Briefing | Mike Dalton | Mar 25, 2022
Rules Reflect Regulatory Change
Coinbase users in Canada will soon be required to report the details of recipients who receive large transactions, according to a notice sent to users.
Those regulations, which came into effect in June 2021, require money services businesses to keep records of virtual currency transactions that amount to $1,000 or more. Coinbase’s decision to announce the rule this week is likely due to the fact that the Canadian authority FINTRAC will begin assessing compliance in April.
See: Snapshot: the regulatory framework for financial services compliance in Canada
According to Coinbase, these changes are being made in response to an anti-money laundering law called the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
“Starting on April 4, Coinbase will introduce some changes required by Canadian regulations,” the notice reads.
A copy of the message sent to customers was obtained by Ryan Sean Adams of Bankless, who shared it on Twitter.
See: CSA and IIROC Publish Guidance and Regulatory Framework for Crypto Asset Trading Platform Compliance
Canada has become a topic of discussion within the crypto community of late. In February, the Canadian government attracted attention when it ordered exchanges to block addresses connected with the convoy protesting COVID-19 restrictions.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Support NCFA by Following us on Twitter!Follow @NCFACanada Not to be missed! Registration NOW OPEN! |
