Paul Schulte, Advisor, Banking and Financial Services
August 22nd, 2019
Paul Schulte is the Founder and Managing Editor of Shulte Research based in Singapore. Paul's roles[...]
Report: State of Regulation Crowdfunding Says No Gold Rush But an Undeniable Job Creator
Crowdfund Insider | | Feb 1, 2019
Regulation Crowdfunding (or Reg CF), created by Title III of the JOBS Act, has been available for several years now. While not without its shortcomings, Reg CF has been leveraged by hundreds of issuers, typically smaller firms, raising over $100 million since May 2016.
This past week, Crowdfund Capital Advisors (CCA) published a report on Reg CF entitled “2018 State of Regulation Crowdfunding,” providing a snap-shot of the securities exemption and its overall performance.
Crowdfund Insider communicated with CCA principle Sherwood “Woodie” Neiss regarding the report. Neiss told CI the promise of Reg CF as a jobs creator and economic engine is starting to prove true:
“Back in 2012, the promise of Regulation Crowdfunding was jobs, a local economic generator, and an industry revitalizer. With the close of the 3rd calendar year of Reg CF we can see that those promises are holding true. Reg CF is proving to be a jobs engine (creating on average 2.9 jobs per issuer), economic generator (pumping over $289 million of revenues into local economies) and industry supporter (enabling 82 unique industries in regions across the USA).”
See: Prominent Group of Fintech Leaders Send Letter to SEC Chair Jay Clayton Demanding an Increase in Regulation Crowdfunding to $20 Million
According to their research, proceeds for campaigns that closed in 2018 increased 154% from $71.2 million in 2017 to $109.3 million in 2018. Total proceeds since inception by the end of 2018 was $194 million.
The number of successful offerings increased 189% from 221 in 2017 to 417 in 2018. The average success rate of a campaign jumped from 58.9% in 2017 to 63.9% in 2018.
The average raise by an issuer is $271,000.
The total number of investors in successful offerings increased 190% from 77,558 in 2017 to 147,448 in 2018.
Unlike the hubris of the initial coin offering world, Reg CF offerings have experienced slower, more sustainable growth, according to CCA.
“Yes there has been no Gold Rush into Reg CF,” says Neiss. “We consider that a good thing. Reg CF issuers tend to be early stage, high risk firms. Investors need to take care when deciding if and how much they want to invest in these enterprises. A slow and methodical growth of the industry now will help the industry in the future.”
While the hope was for online capital formation to provide access to funding beyond established innovation hubs, that hasn’t happened:
“The data shows the entrepreneurial hubs like New York, San Francisco, Los Angeles, Chicago and Austin are popular locations for Reg CF companies. Other cities and states around the USA that are interested in promoting jobs and supporting industries in which they have a core competency, should look at these cities/states and copy their success,” explains Neiss.
See: $5 million Equity crowdfunding extended to private companies in Australia
CCA believes that Reg CF has been good but it could be even better. Notably, Reg CF could be “poised for serious growth if the SEC would increase the issuer cap from $1,070,000 to $20,000,000:”
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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Borden Ladner Gervais LLP | Stephen J. Redican, Robert Dawkins, Ross McGowan and Alexandra Nicol | Jan 9, 2020 The Canadian financial services industry is at the threshold of change. Regulatory overhaul, the ubiquity of online services, and technological innovation and disruption will affect all players—from banks to FinTech start-ups. Open banking will introduce new opportunities and business models for the financial services industry and new services from FinTech entrants to the market—but these opportunities come with unprecedented risks and operational requirements for a banking system that prides itself on stability. Given Canada's unique financial system and constitutional structure, the implementation of open banking won't look the same as it has in the U.K., the EU or Australia, where its introduction is already underway. See: Why Canada must be open to open banking We spoke with a diverse group of leaders from across the Canadian financial services industry to understand open banking's current and emerging issues: What do you see changing? How will your organizations fit into the new landscape? What might a made-in-Canada model of open banking look like for consumers and industry? Roundtable Participants Anne Butler Chief Legal Officer and Head of Policy and Research, Payments Canada "If ...
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Read More
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CSA | Jan 16, 2020 Montreal - The Canadian Securities Administrators (CSA) today published Staff Notice 21-327 Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets, to help these entities to determine situations where securities legislation may or may not apply. “The evolving landscape of the industry prompts us to clarify our regulatory framework so as to better support fintech businesses seeking to offer innovative products, services and applications in Canada,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “As we continue to consider the comments and responses to the consultation we launched last year, the staff notice published today will help platform operators to determine whether their activities are subject to securities legislation.” The notice describes situations where securities legislation will and will not apply. For example, securities legislation may apply to platforms that facilitate the buying and selling of crypto assets that are commodities, because the user’s contractual right to the crypto asset may itself constitute a derivative, a security or both. The relevant determination will depend on the facts and circumstances, including the obligations and intention to provide immediate delivery of the crypto asset. The ...
Read More
Read More
Vox Recode | Shirin Ghaffary | Jan 7, 2020 Facebook’s new rules will still allow controversial fake videos like the one of Nancy Pelosi that made her appear to be drunk. Facebook announced late Monday that it would ban “deepfakes,” which are AI-manipulated videos that distort reality, often simulating real people in fake situations. The social media giant announced the changes in a company executive blog post, saying it will remove deepfakes and other types of heavily manipulated media from its platform. Specifically, the company laid out two main criteria for removing content under the new rules. The first is that the company will remove content posted on Facebook if has been edited in ways that would “likely mislead someone into thinking a subject of the video said words that they did not actually say,” according to the post written by Monika Bickert, Facebook’s vice president of global policy management. Secondly, the platform will ban media if it’s the product of AI or machine learning that “merges, replaces, or superimposes content onto a video, making it appear to be authentic.” Facebook came under fire last year for allowing a manipulated video of Speaker Nancy Pelosi that made it appear as ...
Read More
Read More
CNBC | Hugh Son | Jan 13, 2020 Key Points When Goldman Sachs released a long-awaited app for customers of its Marcus consumer bank last week, it did so with little fanfare or hype. But the app will one day serve as the bank’s storefront and one-stop shop for an array of digital banking services, according to Adam Dell, a Goldman Sachs partner and head of product at Marcus. “There are two kinds of incumbent banks,” Dell told the audience at a financial conference in June. “There are banks that are screwed, and there are banks that don’t know they’re screwed.” When Goldman Sachs released a long-awaited app for customers of its Marcus consumer bank last week, it did so with little fanfare or hype. Unlike the intense attention on its last retail product, the Apple Card, the launch of the bank’s Marcus app was heralded by little more than a smattering of user reviews. See: JPMorgan has a plan to help Amazon and Airbnb look more like banks But the app may prove to be far more important to Goldman than its credit card partnership with Apple. That’s because the portal, which today lets customers check balances and set ...
Read More
Read More
Fortune | Rey Mashayekhi | Jan 14, 2020 In late 2018, payments giants Visa and Mastercard both invested in fintech startup Plaid through a $250 million funding round that valued San Francisco-based firm at an impressive $2.65 billion. Described as “strategic investments,” the two financial services heavyweights sought not only to provide Plaid with financial backing, but also to leverage the fintech firm’s sprawling technological capabilities to improve their own services. See: Visa R&D Arm Develops a Blockchain System That Could Replace Financial Data Aggregators “We’re really excited about working with [Plaid] to enhance payment experiences globally,” Bill Sheedy, executive vice president of Visa’s strategy group, told Fortune at the time. With Plaid’s APIs (application programming interfaces), Visa could potentially improve the customer experience via everything from fraud detection to real-time account balance verification—services that “reduce the friction around financial transactions,” as Sheedy put it. A little over a year later, Visa has decided to come back for the whole thing. Whether it beat its great rival Mastercard to the punch, or saw a deal that its East Coast rival did not see, is as yet unclear. But on Monday, Visa announced that it has agreed to acquire a 100% ...
Read More
Read More
McKinsey & Company | Sean Brown and Kevin Laczkowski | Dec 2019 Resilient companies enjoy gains that last long after an economic crisis has passed. We talk with two of our experts about their new research on corporate resilience and what differentiates companies that emerge from economic downturns stronger than they were going in. We'll share insights on preparing your organization for macroeconomic crises and why the next downturn may be very different from earlier ones. Sean Brown: Kevin, what do you see as the most important first steps in developing such a resilience playbook? Kevin Laczkowski: You need alignment across the top team. This must be driven from the top down. It has to be a senior management team priority, or it doesn’t work. The second step is setting up the resilience nerve center and staffing it with high performers who can take macroeconomic scenarios, bring them down to the company level, understand how to stress test, and know what interventions and diagnostics the organization needs. A resilience playbook needs alignment across the top team. It has to be a senior management priority, or it doesn’t work. Kevin Laczkowski See: Executive Perspectives on Top Risks 2020 Sean Brown: Do ...
Read More
Read More
National Cyber Security Centre UK | Jan 9, 2020 The Cyber Security Body of Knowledge (CyBOK) has been launched at London's Science Museum. A guide which for the first time brings together knowledge from the world’s leading cyber security experts has been launched. The Cyber Security Body of Knowledge (CyBOK) provides a foundation for cyber security education, training and professional practice. It will be invaluable for academia, industry and Government. The 828-page resource has the potential to help organisations to better protect themselves. It covers the foundations of cyber security, ranging from the human element through to issues in computer hardware security. See: Cyberattacks now cost small companies $200,000 on average, putting many out of business Cybercrime FinTech, Flare Systems, Raises $1M, Led by Luge Capital Launched at a special event at London’s Science Museum, CyBOK was sponsored by the National Cyber Security Centre (NCSC), which is a part of GCHQ, and funded by the National Cyber Security Programme with support from DCMS. The development of CyBOK was led by the University of Bristol. Chris Ensor, the NCSC’s Deputy Director for Growth, said: “This guide will act as a real enabler for developing cyber security as a profession. It’s been ...
Read More
Read More
Tech In Asia | Miguel Cordon | Jan 8, 2020 Southeast Asian ride-hailing giant Grab has opened its first cloud kitchen in Singapore as part of the company’s 2020 expansion strategy for its food delivery service GrabFood. GrabKitchen offers merchant-partners a platform to introduce new food concepts and brands. In addition to offering a space to operate in, GrabFood takes care of utility management within the facility and marketing support within the app, helping reduce onset business challenges. The GrabKitchen in Hillview brings over 10 F&B brands, including three new virtual restaurants, to northwest Singapore, according to a statement. Grab is also planning to launch more cloud kitchens in the city-state within the first half of the year. See: Social equity must be central to urban tech innovations Along with this, the company unveiled a GrabFood merchant platform designed to provide tools for merchant-partners. It seeks to cater to their end-to-end business needs that span procurement, marketing, finance, and business management to help them expand their businesses. The platform will include features such as a unified merchant app and a dashboard with access to GrabFood, Grab Financial Group, and GrabAds services. It will also help merchant-partners procure discounted kitchen supplies ...
Read More
Read More
AiThority | Sudipto Ghosh | Jan 7, 2020 The People’s Republic of China has officially bestowed legitimacy to Blockchain and Cryptography. The country’s enchanted Blockchain industry will now be regulated as per China’s Password Law. The world’s first Password Law has come into effect on 1 January 2020, following the Chinese government’s initiative to regulate how government agencies and private companies use data to run their cryptography management systems. From the start of this New Year 2020, the Office of State Commercial Cryptography Administration (OSCCA), and only approved products are sanctioned for use in China. In this article, we are providing a quick overview of China’s Password Law and what it entails for the blockchain ecosystem globally. Decoding China’s Password Law Though a very unique development in the global Blockchain scenario, the Password Law is completely home-grown and blossoming affaire de coeur. Within weeks of its Seventieth anniversary of the People’s Republic of China (1 October 2019), the government led by President Xi Jinping passed a resolution to regulate cryptography for multiple industries. A Chinese daily had reported that the 14th Session of the 13th National People’s Congress Standing Committee voted to pass the ‘crypto law’ on 26 October 2019 ...
Read More
Read More
KABN Network | David Lucatch | Dec 9, 2019 Crowdfunding Offering supported by UK Based Tokenise and KABN Equity Token created using Polymath Token Studio Gibraltar--(Newsfile Corp. - December 9, 2019) - KABN (Gibraltar) PLC ("KABN" or the "Company") is pleased to announce that it has created its KABN Equity Token using the Polymath Token Studio and will make its Equity Token available for sale through a public Equity Crowdfunding sale via UK based Tokenise, which is fully compliant with the UK FCA regulatory framework. The Company's Token Offering information site can be found at www.kabntoken.com. Unlike a network or utility token, each KABN Equity Token will represent a KABN (Gibraltar) PLC Preference Share as equity or ownership in the Company. After spending well over 2 years to develop, test and launch its active business platform, KABN believes that ownership of identity is a basic human right and that individuals should be the primary beneficiary of any use of that identity data. To that end, KABN has developed a continuous, Always On, verified identity solution for commercial clients and consumers that allows individuals to manage both their private and public data, restricting the sharing and use of that data while ...
Read More
Read More
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