Tech workers took out loans based on the value of their start-up stock in recent years. That may come back to haunt them.
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Personal Finance
Open Banking to Bring Multitude of Benefits to Canada in 2023
The Globe and Mail | | Aug 6, 2022
When Colin Deacon started his career as an investment adviser 40 years ago, he made a point of working with some of the smallest customers – those who’d typically be passed over by the financial services industry. His clients got financial and tax planning advice, help with their small business concerns and investing assistance – support that, he said, was and still is typically unavailable to the majority of Canadians.
We still have a situation where most Canadians are not given really good, basic advice … and if you’re somebody from a marginalized community your access to that is 10 times worse.
Mr. Deacon said he sees the development of an open banking system in Canada as a solution to that problem. Open banking, or consumer-directed finance, would allow individuals and businesses to have control over their own financial data, and to securely share it with third-party financial service providers or authorize them to take action on their behalf.
See: Open Banking is Coming to Canada…Are you Ready for Change?
Currently, Canadians don’t own or have the right to share their financial data, and their ability to access services provided by fintech companies is dependent on whether their financial institution permits it. This means that financial products and services aimed at helping Canadians improve their financial picture – such as credit-building products for those with poor or no credit history, predictive budgeting apps that warn the user if their account is at risk of being overdrawn and more – may not be available to them.
Many Canadians are unhappy with the current financial system, according to an April survey by FDATA and Paytechs of Canada. The survey of Canadian consumers and small businesses found more than half felt stress interacting with the country’s financial services sector. Women business owners were more likely than their male counterparts to report stress and younger Canadians were more likely than older individuals to say the same. More than two-thirds of respondents said they’d benefit from more competition and transparency in the market.
On demand Video: FFCON: Inclusive Banking and Affordable Credit
The federal government is expected to roll out an open banking system by early 2023, with working groups under way this summer. Proponents say this system will give Canadians access to a wider range of financial products and services, make it easier to switch financial institutions, reduce fees on transactions and make the financial system more equitable for marginalized Canadians. That includes the millions of consumers without a bank account or who aren’t adequately served by mainstream financial services.
Open banking is ultimately about consumer choice and making financial services more accessible and less expensive for small businesses and individuals, said Andrew Graham, co-founder and chief executive officer of Borrowell, a fintech firm that provides free credit monitoring and offers credit coaching and credit-building products.
I would not overlook the importance of lowering fees and the cost of interacting with financial services. Such payments can become a significant blocker to financial growth for many people and many businesses.
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
 |  |  |
|---|---|---|
 |  |  |
Legal & Financial Tips to Help You Cope With the Divorce
Guest Post | Aug 2, 2022
Image source: Pixabay
Divorce is never an easy process, but it can be especially difficult when you are trying to go through it on your own. If you are considering a divorce, or if you have already started the process, it is important to arm yourself with as much information as possible. In this blog post, we will provide you with some tips on how to get through a divorce financially and legally. So, let's get started:
Learn How to Apply for a Divorce
The first step in getting a divorce is to actually file for one. When it comes to the divorce application procedure, every state is different. In some states, you can file for a divorce online, while in others you will need to go to your local courthouse and fill out the paperwork in person. To find out how to apply for a divorce in your state, you can either contact your local courthouse or do a quick Google search. However, some common papers needed for filing for divorce include a petition for divorce, a summons, and a marital settlement agreement.
Learn How Much Money You Have
The next step in getting through a divorce is to learn how much money you have. This includes understanding your financial situation as well as your spouse's. In other words, you need to take a close look at your assets and debts. Once you have a clear understanding of your financial situation, you can start to make a plan for how you will move forward financially. This can be a difficult process, but it is important to be as fair as possible.
Don't Try to Hide Anything
When it comes to divorce, honesty is always the best policy. This means that you should not try to hide any assets or debts. If you are caught doing this, it could have a negative impact on your divorce case. For example, if you are trying to hide assets, the court may think that you are trying to cheat your spouse out of money. Or, if you are trying to hide debts, the court may think that you are trying to avoid paying them. Either way, it is important to be upfront about your finances.
Image source: Pixabay
Hire a Divorce Attorney
When a couple decides to get a divorce, the process can be long and arduous. If you are considering getting a divorce, it is important to understand the benefits of hiring a divorce lawyer. A good lawyer can help make the process easier and less stressful. They will be able to guide you through the process, answer any questions you have, and help protect your interests. In addition, a lawyer can help you navigate the complex financial aspects of divorce. When looking for a divorce lawyer, it is important to find someone with experience in handling divorces in your state. You should also look for someone who you feel comfortable with and who you can trust. Hiring a good divorce lawyer is one of the best things you can do to protect yourself during the divorce process.
Make Sure Your Paperwork is Filled Out Correctly
One of the most important things to remember when going through a divorce is to make sure that all of your paperwork is filled out correctly. This includes both the divorce application and any other documents that need to be filed with the court. If you are not sure about something, it is always best to ask your lawyer. In addition, you should make sure to keep copies of all of your paperwork in a safe place.
Think About Child Support
If you have children, child support will be one of the biggest financial considerations in your divorce. Child support is the money that one parent pays to the other for the support of their children.
See: Different Legal Rules Every Entrepreneur Should Learn
The amount of child support that is paid can vary depending on a number of factors, such as the income of both parents and the needs of the children. If you are going through a divorce, it is important to sit down with your lawyer and figure out how much child support you will need to pay or receive.
Consider Bringing in a Forensic Accountant
If you are going through a divorce, you may want to consider bringing in a forensic accountant. A forensic accountant is someone who specializes in investigating financial crimes. They can help you figure out if your spouse is hiding assets or income. In addition, they can help you trace money that may have been spent on affairs or other things during the marriage. Forensic accountants can be a valuable asset during the divorce process.
The divorce process can be difficult and complex, but there are things you can do to make it easier. These tips will help you cope with the financial and legal aspects of divorce. By being honest, hiring a good lawyer, and understanding your finances, you can make the process less stressful and more manageable.
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
| | |
|---|---|---|
| | |
What to Know Before Using Bitcoin ATMs
Guest Post | Aug 1, 2022
Before you buy Bitcoin (BTC), your first step is to create a crypto exchange account, along with buying or downloading a crypto wallet for storing your cryptocurrency. As cryptocurrency and the tech associated with it have developed, there's another easy and convenient way of buying Bitcoin, which doesn't involve a computer or cryptocurrency exchange. This method is using a Bitcoin ATM.
What Is a Bitcoin ATM?
Bitcoin ATMs (or crypto ATMs) are cryptocurrency kiosks where people deposit cash (fiat currency) or use credit cards to buy Bitcoin. Some ATMs support other cryptocurrencies. Bitcoin ATMs aren't like fiat currency ATMs where you can manage your account's funds. They're simply tools through which you can buy Bitcoin without requiring users to create an account. You'll just need to complete a few steps as directed in the ATM and complete the transaction.
You can find these Bitcoin ATMs or kiosks in your local areas, such as grocery stores, department stores, or local banks. If you don't see one in your local area, you can use an online locator to find one within your region. While Bitcoin ATMs are not a growing part of cryptocurrency, their use still strikes many people as strange.
How Do Bitcoin ATMs Work?
You can't withdraw fiat currency from a cryptocurrency ATM as you would from your debit account. They only allow you to buy Bitcoin using fiat currency or credit card or sell your crypto funds for cash. You insert cash or credit card into the machine and follow a few steps, and then it displays the corresponding amount of Bitcoin (or crypto) funds in your crypto or virtual eWallet.
In the Bitcoin ATM, there's a QR code that will prompt you to download a specific crypto wallet that the ATM machine supports. Coinbase crypto wallet is popular for many Bitcoin ATMs, but you can choose a wallet from the list in the machine. You can also sign in to your Netcoins eWallet here if you already have one.
The wallet you created will generate a particular Bitcoin address where the ATM will now send your purchased coins after you confirm and complete the transaction. Generally, Bitcoin ATMs are intuitive for anyone; if you've used an ATM before, you'll just follow instructions and steps on the screen.
See: Payments without banks goes mainstream with Twitter on Bitcoin Lightning Network
If you need cash, you also can sell your Bitcoin funds at the ATMs in exchange for cash. You'll enter the given amount of fiat currency you want in figures and take cash. The amount of crypto (Bitcoin) funds deducted will vanish from your eWallet, after you complete the sale.
Are Bitcoin ATMs Safe?
Bitcoin ATMs are potential targets for scammers, fraudsters, cybercriminals, and money launderers to defraud unsuspecting victims. Due to their lack of identification verification, it's easier to anonymously and instantly convert fiat currency to Bitcoin or other cryptocurrencies. This is both a risk to money laundering and complicates anti-fraud investigations of money launderers.
Scammers might also use the Bitcoin ATMs as their payment points for goods or services advertised on eBay or craigslist and sold at much lower prices. They may lure buyers to private communication, instruct them to pay via Bitcoin ATMs then fail to deliver the goods.
Endnote
Overall, Bitcoin ATMs are a great way of buying Bitcoin if you want to buy in a private manner and without going through an exchange. However, you need to make sure there's one in your locality, along with being aware of scammers and money laundering schemes.
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
| | |
|---|---|---|
| | |
Good Reasons Why You Need To Have A Proof Of Income
Jul 26, 2022
Image: Unsplash
Proof of income refers to the documentation that shows your earnings over a specific period. The documents prove that you earn the money you claim to. This kind of documentation is often required by lenders, landlords, insurance providers, credit card companies, and utilities. Before you get a loan, you must provide the lender with certain documents, and they will review them before approving your loan. Keep on reading to learn a few good reasons why you need to have proof of income.
Annual Income Tax Return
Both individuals and companies should pay income tax to the government. When you fill out your income tax return form, you must provide proof of income that determines the tax you should pay. If you operate as a freelancer, your client or employer must send a 1099 form for payments that exceed $600. You must report your income on the tax return to show the money you earn.
Show Capability to Repay a Loan
If you want to apply for a loan, you must provide proof of income to show your capability to repay it. Before lenders approve your loan, they want to know the level of risk you pose which is based largely on your ability to repay the money. You must provide proof of income to get the loan you want. Lenders also check your credit score to determine your eligibility for a credit facility. If you have documents to prove that you earn monthly income, there are high chances that your lender will approve your loan.
Get a Loan
If you want to get an automobile loan, you can generate paystubs that you can use as proof of income. You should know that creating proof of income is easy, and the process takes a few minutes. With the right technology, you will realize that the process is very easy. All you need to do is add the necessary details, and your pay stub will be ready in a short period. Your paystubs can be verified, so you need to provide the correct information to increase your chances of loan approval. You may also need to provide a bank statement to accompany your loan application with pay stubs as a source of income.
Determine Loan Value
When you apply for a loan, your level of income determines the amount of money you can access. For instance, the money you earn determines the mortgage you can get from different lenders. The lender goes through your proof of income to determine the amount of money you can afford to borrow to buy a home. You must also have enough down payment to make when you buy a new home. You must do your research first to see the houses you can afford to get in order to apply for the appropriate loan.
Purchasing Insurance
There are different types of insurance policies available on the market, and they play different roles in our lives. When you apply for a policy, the provider will check your level of income to determine if you can afford to pay the monthly premiums. For instance, when you apply for a health insurance policy, you will get something commensurate with your monthly earnings. Different policies carry varying features which means you may need to pay more out-of-pocket expenses. However, the good news is that you can upgrade your policy if your income increases. All you need to do is to choose something you can afford.
Renting an Apartment
If you are looking for an apartment or other type of property to rent, the landlord will need to check your monthly income to see if you will be able to pay your rent. Besides background checks, landlords use income proof to screen the tenants.
See: Before receiving your salary in crypto you should consider these things
They also consider other aspects like eviction records and credit scores to determine if you qualify. If you are looking for accommodation, you must choose a place within the range of rentals you can afford.
Image: Unsplash
Proof of income refers to any documentation that shows the amount of money you earn. If you want to apply for a loan, your lender will need to check the money you earn to determine your level of risk. Insurance companies also need proof of income to determine the type of policy you can get. Landlords are also known to perform background checks to screen renters and prevent issues with non-payment of rentals in the future. There are different types of documentation that can be used as proof of income. Paystubs and bank statements are the most common forms of acceptable proof of income.
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
| | |
|---|---|---|
| | |
Useful Trading Tips That You Will Want To Hear
Jul 24, 2022
Image source: Pixabay
Are you looking to get into trading? If so, you will want to make sure that you are doing everything possible to increase your chances of success. There are a lot of different things that you can do to improve your trading skills, and this blog post will discuss some of the most important ones.
Choose the right software
One of the primary things that you need to do to be successful at trading is to choose the right software. This is something that you should spend a lot of time researching on before making any decisions. There are a lot of different options out there, and not all of them are created equal. You need to find software that is going to give you the tools that you need to be successful. More often than not, a popular trading software will most likely be a good option. In addition, you also need to make sure that the software is easy to use. There is no point in choosing something that is going to be difficult for you to figure out. The last thing that you want is to waste your time trying to learn how to use a complicated piece of software when you could be spending that time trading.
Get a demo account
Another thing that you should do if you want to be successful at trading is to get a demo account. This will allow you to try out the software and get a feel for how it works without putting any real money at risk. This is an important step, as it will help you to avoid making any mistakes that could cost you money. In addition, a demo account will also allow you to test out different strategies. This is important, as you need to find a strategy that works well for you before you start using it with real money. Otherwise, you could end up losing a lot of money very quickly. You will also want to make sure that the demo account is with a reputable broker. This way, you can be sure that you are getting accurate data.
Learn basic trading strategies
Trading is not just about buying and selling stocks. There are a lot of different strategies that you need to learn to be successful. These include things like technical analysis, fundamental analysis, and risk management. Technical analysis is the process of looking at charts and trying to predict what will happen next. Fundamental analysis is the process of looking at a company's financials to determine if it is a good investment. Risk management is all about knowing how much money you can afford to lose on a trade and still be profitable in the long run. These are just a few of the things that you need to learn if you want to be successful at trading. You need to make sure that you spend some time learning about these different strategies before you start trading. Otherwise, you could end up making some very costly mistakes. There are a lot of different resources out there that you can use to learn about these strategies, so make sure to take advantage of them.
Read, read, and read some more
If you want to be successful at trading, you need to make sure that you are always learning. This means reading as much as you can about the subject. There are a lot of different books and articles out there that can teach you a lot about trading. You need to take the time to read as many of them as you can. It is also a good idea to talk to experts. These are people who have been trading for a long time and know what they are doing. They will be able to give you some valuable advice that you can use to improve your trading skills. They will be able to tell you about some of the most common mistakes that new traders make. In addition, you should also try to attend seminars and workshops whenever possible. These can be a great way to learn from more experienced traders. You will be able to pick up a lot of valuable information that you can use to improve your trading skills.
Image source: Pixabay
These are just some of the things that you need to keep in mind if you want to be successful at trading.
See: Checkout these free crypto (trading) tools
If you can follow these tips, you will be well on your way to making a lot of money in the market. Just make sure to always stay patient and never risk more than you can afford to lose. Trading can be a very profitable activity, but it is also one that comes with a lot of risks. So, always be sure to take those into account before you make any decisions.
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
| | |
|---|---|---|
| | |
What Are the Pros and Cons of Bitcoin ATMs?
Jul 22, 2022
Almost 30% of Canadians have made the great choice to start using cryptocurrency. If you're one of them or are thinking about joining their ranks, using a Bitcoin ATM is one of the most accessible, simple, and secure ways to begin your journey.
These kiosks are ultimately enormously beneficial to crypto users, but it's important to have all the facts before booting up a Bitcoin ATM near you. Read on to learn the pros and cons of these machines and to get some information on when to use one.
The Basics of Crypto ATMs
Cryptocurrency ATMs are kiosks that you might find at several different venues in your area. These locations may include grocery stores and department stores. They also can almost always be found at banks.
Basically, if you can find a regular ATM in a specific location, you can probably find a Bitcoin one there as well. You can also locate them using kiosk locators online such as ByteFederal's website.
But what exactly is a Bitcoin ATM?
On the surface, these kiosks look like regular ATMs, but they perform different functions. Instead of letting you withdraw fiat currency from a debit account, they allow you to buy Bitcoin with fiat currency. When you insert cash into the machine, the corresponding amount of crypto funds will appear in your virtual eWallet.
You also can sell Bitcoin at these kiosks in exchange for cash. You just enter the amount of money that you want to withdraw and take the cash. The correct amount of crypto funds will just vanish from your eWallet, completing the sale.
What Are the Pros of Bitcoin ATMs?
One benefit of Bitcoin ATMs is that they're extremely accessible and easy to use. The kiosks are all over the country, but they also are extremely easy to perform transactions on. All you need is a photo ID, eWallet QR code, and some cash.
Scan your ID on the reputable ByteFederal kiosk. Then scan the QR code linked to the eWallet where you store crypto. This code usually is on a smartphone screen, but you can print it and scan a hard copy if that makes you feel more comfortable.
Think links your identity to your eWallet to ensure that you are who you say you are. It keeps you safe from unauthorized users getting into your account and clearing your funds.
At this point, you'll be prompted to insert cash. Follow the prompt and wait a few minutes for the corresponding amount of crypto to appear in your account. You can then log out of the machine and be on your way.
This easy transaction is a welcome shift from more challenging online exchanges. If you use a crypto exchange, you need to locate something reputable, look into its credentials, enter personal information, link your account, and wait to find a seller that meets your needs. You also would need to wait for about a week for funds to appear in your crypto wallet, which is inconvenient.
Speedy Transactions
Waiting for a week to get the Bitcoin that you buy is annoying since you can't spend it immediately. However, it also is risky when it comes to actually getting what you pay for.
If you buy Bitcoin online, even a direct exchange is risky. If you don't see your funds appear for a week, you won't know if you've been jilted. You also don't know if the other person accidentally sent funds to the wrong place and will be stressed out until you see the funds appear.
In addition, you have little recourse if you don't get the crypto you're owed. It's more challenging to complain to a stranger a week after the transaction than it is to call an ATM company 10 minutes after a transaction.
Bitcoin ATMs give you peace of mind with their immediate transactions. You can also instantly load funds onto a Bitcoin debit card or begin to make online purchases. This lets you make the most out of the crypto that you purchase.
More Control Than Alternatives
Another issue with online exchanges is the lack of control. Most exchange websites randomly pair up a buyer with a seller. You won't even know any information about the person that you're making a transaction with.
This can be stressful for many Bitcoin buyers since they have 0 control over the transaction. There's no way to confirm that the trader is trustworthy. There's no chance to even establish a baseline level of trust with a conversation.
Some people turn to direct exchanges to do this where they meet someone online and buy Bitcoin from them. However, this also isn't without its risks. You still don't actually know the person and whether they're trustworthy, so the stress is still partially there.
Bitcoin ATMs give you full control over who you buy from. You know that you're working with a reputable company assuming that the kiosk is clearly labeled. There's no need to worry about being jilted or running into security issues.
High-Level Security
Speaking of security, Bitcoin ATMs are extremely secure. They make you verify your identity before a transaction, ensuring that others can't steal your funds. However, they don't save any of the documents that you scan.
This means that in the unlikely event of a data breach, there will still be nothing for hackers to steal. The Bitcoin ATM network is also secured by encryption and firewall technologies to make penetration difficult for cybercriminals.
Perfect for On-the-Go Crypto Enthusiasts
When you travel abroad, exchange rates can be challenging to navigate. You also would need to find ATMs, pay conversion fees, and occasionally worry about foreign transaction charges on credit and debit cards.
This isn't the case for those who use cryptocurrency. If you like to travel, you can use cryptocurrency to avoid these fees and inconveniences. If you're traveling within the US and Canada, you can find crypto ATMs everywhere you go and buy Bitcoin with no frills.
Are There Any Cons of Bitcoin ATMs?
While Bitcoin ATMs are largely positive, there are pros and cons to them just as there are with any technology. Some disadvantages include:
- Transaction fees (about 9%-30% every time you use the kiosk)
- Harder to locate than traditional ATMs despite their accessibility
- Occasional errors and shutdowns, though no more than you would find with traditional ATMs
- Require an eWallet that is compatible with the machine
- Some are not reputable, though this is avoidable when you work with top providers like ByteFederal and seek out their machines
Besides the transaction fees, none of these cons present more problems than a traditional ATM would. Most of them are easily avoidable. You have the power to locate reputable kiosks, install an appropriate eWallet, and locate an ATM near you.
When it comes to fees, it's understandable that Bitcoin ATM providers use them to get compensation. However, fees are decreasing as demand for crypto grows. This con may be annoying, but it also likely is a short-lived disadvantage.
When Should You Locate and Use a Kiosk?
You can find a Bitcoin ATM whenever you need to trade cash for crypto or vice versa! There are no rules about when you should locate them. They're usually available during regular business hours at whatever venue you find them.
One good reason to locate a kiosk is when you want to perform more secure transactions. You can sign up for gambling sites online without giving out any financial information. You can make purchases from eCommerce vendors that you don't want accessing your banking data.
See: Decentralization and Resilience are Key to Bitcoin’s Value
The possibilities are limitless for users, but they also are vast for investors. If you like to invest and make money over time, you should find a Bitcoin ATM when you want to diversify your portfolio. This is a great way to get something that will accrue value over time so that you can sell it back for more money later.
Convert Cryptocurrency to Cash and Back
Crypto kiosks are emerging as one of the most secure and convenient ways to access Bitcoin. While they do have a few downsides, they're by a landslide the best option for buying Bitcoin. Now that you know when to find a Bitcoin ATM and make a withdrawal, it's time to get started.
Check out the "invest" tab on our home page to learn more about why Canadians - and worldwide consumers - should invest in Bitcoin. You'll get portfolio diversification tips and some hacks on how to make the most out of each investment. You also may be interested in our "build" section for some information on growing a business with crypto.
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
| | |
|---|---|---|
| | |
What You Need to Know About Employee Loans in Down Round Times
New York Times | | Jul 20, 2022
Tech workers took out loans based on the value of their start-up stock in recent years. That may come back to haunt them.
- SAN FRANCISCO — Last year, Bolt Financial, a payments start-up, began a new program for its employees. They owned stock options in the company, some worth millions of dollars on paper, but couldn’t touch that money until Bolt sold or went public.
- So Bolt began providing them with loans — some reaching hundreds of thousands of dollars — against the value of their stock.
- In May, Bolt laid off 200 workers. That set off a 90-day period for those who had taken out the loans to pay the money back. The company tried to help them figure out options for repayment.
See: Need to Bootstrap Your Business? Here’s What You Need to Know in 2022
- In recent years, companies such as Quid and Secfi have sprung up to offer loans or other forms of financing to start-up employees, using the value of their private company shares as a sort of collateral. These providers estimate that start-up employees around the world hold at least $1 trillion in equity to lend against.
- But as the start-up economy now deflates, buffeted by economic uncertainty, soaring inflation and rising interest rates, Bolt’s situation serves as a warning. While most of them are structured to be forgiven if a start-up fails, employees could still face a tax bill because the loan forgiveness is treated as taxable income. And in situations like Bolt’s, the loans may be difficult to repay on short notice.
Rick Heitzmann, an investor at FirstMark Capital:
No one’s been thinking about what happens when things go down. Everyone’s only thinking about the upside.
Underwater loans
- Some start-up workers regret taking the loans. Grant Lee, 39, spent five years working at Optimizely, a software start-up, accumulating stock options worth millions.
- When he left the company in 2018, he had a choice to buy his options or forfeit them. He decided to exercise them, taking out a $400,000 loan to help with the cost and taxes.
- In 2020, Optimizely was acquired by Episerver, a Swedish software company, for a price that was lower than its last private valuation of $1.1 billion.
See: Employee Ownership Trusts: How Employees Can Become Legal Shareholders for Free
- That meant the stock options held by employees at the higher valuation were worth less. For Mr. Lee, the value of his Optimizely stock fell below that of the loan he had taken out. While his loan was forgiven, he still owed around $15,000 in taxes since loan forgiveness counts as taxable income.
- In a downturn, loan terms may become more onerous. The I.P.O. market is frozen, pushing potential payoffs further into the future, and the depressed stock market means private start-up shares are probably worth less than they were during boom times, especially in the last two years.
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
| | |
|---|---|---|
| | |
