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The R.A.B.B.I.T. Race: The Importance of The Crowd, and the R.A.B.B.I.T Report

The tortoise may sometimes beat the rabbit, but in technology, it’s rarely much of a race. CB Insights CEO Anand Sanwal said <a href=”https://www.businessinsider.com/vc-analyst-claims-2016-will-be-the-year-of-the-rabbits-2016-1?r=UK&amp;IR=T” target=”_blank” rel=”nofollow noopener noreferrer”>just this</a>: that rabbits – real actual business building interesting tech – were needed for the 21st century. This means grounding a company’s’ operations. It implies avoiding the high evaluations where there is little substance besides excitement. And it requires overhauling trust and transparency in a way that is mutually beneficial for both shareholders and issuers.

<a href=”https://bacuroma.kinsta.cloud/all-in-one-koreconx/” target=”_blank” rel=”nofollow noopener noreferrer”>KoreConX</a> has been included in the R.A.B.B.I.T Report by <a href=”https://www.crowdcapitalvc.com/” target=”_blank” rel=”nofollow noopener noreferrer”>Crowd Capital Ventures</a> and <a href=”https://crowdfundcapitaladvisors.com/” target=”_blank” rel=”nofollow noopener noreferrer”>Crowdfund Capital Advisors</a> founded by Jason Best and Sherwood Neiss, two people who helped paved the way for the JOBS Act and equity crowdfunding in the US, as a holistic technological solution that epitomizes user-centered thinking. As leaders in due diligence, the potential in building technology with wide applicability, and an unwavering principle of reciprocity and excellence for all customers and clients, KoreConX magnetizes relationships in equity crowdfunding.

At the core is connection. KoreConX enables shared information, easy access to crowdfunding portals, and a way to streamline all shareholder management and <a href=”https://bacuroma.kinsta.cloud/all-in-one-koreconx/” target=”_blank” rel=”nofollow noopener noreferrer”>communication and documentation</a>. It’s a pulse to the crowd, to the initiative, and to the pre- and post-raise of equity crowdfunding. It’s also a mechanism to build trust and relations, soon to be the heart.

KoreConX’s inclusion in the R.A.B.B.I.T Report is testament to this ground-breaking work, indicative of both the growth of the equity crowdfunding systems <a href=”https://www.freedman-chicago.com/ec4i/Growth-of-Equity-Crowdfunding.pdf” target=”_blank” rel=”nofollow noopener noreferrer”>generally around the world</a> and need for customer-centric tools. It offers a solution to both private and public capital markets where there is a problem of accountability and an absence of robust channels of communication.

KoreConX simplifies all necessarily cohesive equity crowdfunding processes while maintaining the <a href=”https://bacuroma.kinsta.cloud/all-in-one-koreconx/” target=”_blank” rel=”nofollow noopener noreferrer”>integrity of the deal flow</a> and confidentiality of the information provided. Such intensive integration and understanding of the equity crowdfunding process mitigates administrative burdens, frees up time, and settles a company in for the race that requires both parts tortoise tenacity and rabbit rousing.

The R.A.B.B.I.T stresses that it isn’t only the race that matters, though – it’s the audience. KoreConX embodies the power in the crowd, showing that leveraging their excitement, by building their trust, and by consequently enabling them to wish to participate in the process, a business can be, and often is, bettered.

Read the full report<a href=”https://us2.campaign-archive2.com/?u=b0816e69963124d68737fcc2b&amp;id=30e289f691&amp;e=22c43ccbe1#_ftnref1″ target=”_blank” rel=”nofollow noopener noreferrer”> here</a>.

World Domination: The New Fintech

Banking, finance, and insurance have been largely constant and unchanging for decades. It’s been the very definition of an “old boys’ club”, static, institution, monopolistic, and powerful. Competition hasn’t come from within, at least not to the same extent that it once did, with monster banks working hard to simply take chunks out of each other. Fintech is slowly taking over entire business segments, and mobilizing a new demographic that is anything but old.

For those who are totally opposed to the Fintech sector, this will really frighten you.

Change is scary, but necessary. Technology has stepped in and created innovation from stagnation, and pivoted an entire industry full of players too top-heavy and cautious to even move. Suddenly, banks have no choice but to re-think their long-term strategy in order to continue to compete against more agile financial tech solutions that have seeped into the market and somehow managed to gain traction against market oligopolies in some cases, and huge financial resources in most.

Fintech is scary enough for many people, especially when considering how disruptive this sector has been. Fintech has already disrupted banking, proving the model was broken, second, it has disrupted capital markets by democratizing how capital can be raised and invested, and third, it’s beginning to change how the insurance business works. It used technology and cultural shifts towards regulatory changes to allow everyday non-accredited investors to invest. Equity Crowdfunding empowered people to potentially become a part of big change, taking something previously the purview of venture capitalists, angel investors, and the wealth, and making it accessible. Entrepreneurs benefit from easier access to capital, and investors from more options.

What all this shows is that we are in the midst of a fintech revolution, and there’s no way to stop it. Clinging to old ways of doing things, insisting that they were somehow better because they were familiar implies that there is room for fear in finance and in business. Fintech is a positive. Investors, consumers, and indeed even the banks should know that this is cause for optimism, because it represents an opportunity to be better, to do better, and to do more.

What this means is that new entrants that are disrupting these sectors are becoming global dominant companies overnight, something we have not seen in the past. Consider some of the equity crowdfunding success stories in the US and internationally: OurCrowd has successfully closed deals for companies looking for upwards of $25M in funding and StartEngine has more than $70M in reservations, and these stories aren’t even a scratch on the surface.

It takes very forward thinking investors to see this and many are getting on the list. It isn’t the investors that hold back, saying that new forms of finance like equity crowdfunding won’t work, it’s the established industry players, and they do it because they’re afraid. They refuse to adapt. They see the change, and that 2016 is the year that fintech companies step into the limelight, and begin to become household dominant worldwide. They are not used to this kind of competitor. They’ve only ever competed against organizations exactly like their own, and that scares them.

Brace yourself, for those that believe this is only happening in your city or country: the disruption is global and fintech is a tidal wave.

Holy Grail of Regulated Crowdfunding

Travelling around the world gives you great perspective on many things.  From the people, culture, food, and market, to how everyone has their own way of getting things done. I spent the tail end of 2015 in airports and on airplanes travelling around the world to speak at conferences, and it has fundamentally changed my perspective on many things.

I had a system when I was travelling.  Each time that I was called on to speak in a new country, I’d begin by studying local securities regulations – how they work, what you can and can’t do, and what the limitations of each set of rules is. I was speaking as an expert in equity crowdfunding, but also taking it as an opportunity to become a student of the countries I was speaking in.  I wanted to bring a truly global perspective home, and bring international insights back to North America on what regulated crowdfunding looks like around the world.

Regulated Crowdfunding is a global phenomenon, everyone is curious as to what other countries are doing to grow it and control it.  It’s only natural. Very few technological innovations are “born global” but this is one.  Equity and debt crowdfunding have spread like an epidemic.

Today there are thousands of regulated crowdfunding portals on every continent. Capital markets have changed more in the past ten years than in the one hundred years preceding, and the impact of this change is exponential.

Currently, many countries still only allow accredited investors to invest in private companies via the regulated crowdfunding portals.  The accredited investor exemption is great because there are no limits for the company or the investors, but this is still constraining the pool of potential investors to a fraction of what it is in countries that have opened things up and empowered the crowd.

We also have countries that allow non-accredited investors to invest, but the regulators limits how much can be invested and how much companies can raise. Clearly this is not what the visionaries and originators of crowdfunding had envisioned, but we must understand that you have to crawl before you can walk, and walk before you can run.

So it’s obvious the Holy Grail in Regulated Crowdfunding is allowing a company to raise unlimited capital, non-accredited investors to invest and low regulatory reporting requirements.

Nowhere in the world does this exist except in one country: Canada.

Canada is the only country at the moment that has the Holy Grail of Regulated Crowdfunding.  It allows Canadian and foreign companies to raise unlimited capital from Canadian and foreign non-accredited investors. Canada has had the best piece of regulated crowdfunding regulation in place long before regulated crowdfunding even existed.

The rest of the world needs to see this model and learn from it. They should see how it works, and see how they can adopt similar measures in their jurisdictions.  Canada has done a great job with this exemption, termed the Offering Memorandum, and it needs to be appreciated for all it can do.  For those that want to increase their limits for both companies and investors look no further come and speak to the Canadian regulators.

The Holy Grail is here.

Its great to be Canadian eh !!

It’s an exciting time to be in Canada. On March 20, 2014, the Canadian regulators proposed 4 ways that companies can raise capital in Canada via equity crowdfunding, and more importantly 4 ways investors can invest. This is a great start!!!

There is no longer going to be the issue of a investment gap in Canada. With the 4 proposed regulations companies now have options to raise capital during each stage of their company’s development.

Canada is the only country in the world that allows 4 types of equity crowdfunding regulations. Canada might have been late getting in the game but they are coming out with a bang!

The info graphic illustrates the <strong>four (4) proposed equity crowdfunding</strong> regulations.

No other country in the world today, offers this many choices to investors, companies and equity portals for accessing capital.

<strong>Option 1</strong>, the accredited investor exemption is similar to the rules in the USA, and other countries around the world. This exemption applies all across Canada.

<strong>Option 2</strong> the Offering Memorandum (OM) is very unique exemption to Canada.. This allows companies to raise capital from non-accredited investors with a specified disclosure document and risk acknowledgement requirements.

<strong>Option 3</strong> the Equity Crowdfunding exemption allows companies to raise up to $1.5Million annually, and investors have limits on how much they can invest. This option is also limited to certain provinces in Canada.

<strong>Option 4</strong> the Start up exemption allows anyone within the provinces that are adopting this exemption to raise up to $150,000 every 6 months, and investors have limits on how much they can invest.

With all these choices, these are very exciting times for Canadians. It is important for anyone interested in Equity Crowdfunding to make sure they receive proper advice from their legal counsel, accountants and board of directors on the most effective equity crowdfunding strategy for your company to raise capital.

To learn more about what is happening in Canadian Equity Crowdfunding Sector, follow Equity Crowdfunding Alliance of Canada (ECFA Canada) https://www.ECFACanada.ca.

Don’t miss this opportunity to learn about equity crowdfunding. <strong>FREE eBook</strong> on Equity Crowdfunding to get you started.

Equity Crowdfunding Eco-System

Like any new business sector you need to look at the entire eco-system to understand how it works. Back in 2003 I had the pleasure of been given a great education from one of the leading VC firms about eco-systems. During the meeting the VC expressed an interest in our opportunity but provided us a scenario as to why he would not invest in our company. He walked us through all that would be needed to build a billion dollar company, and money was only just one point. He explained that a company is part of a eco-system and all of it needs to be there for it to succeed (customers, suppliers, investors, educations, workforce, research, etc..). Since that day each business I begin I build an eco-system to make sure I am on the right path.

Equity Crowdfunding has an eco-systems and its very important that everyone understand all the pieces and how they work together.

The following image provides an overview of the equity crowdfunding eco-system (investors, issuers, 3rd party providers, equity portals, regulators).

Let’s examine this eco-system.

The first important understanding is that Equity Crowdfunding works in a highly regulated environment determined by the country or state/province involved.

Securities Commissions are charged by the local government to implement laws providing detailed regulations, monitor and provide oversight and intervene when necessary with fines, penalties and sanctions. In short, to keep things on the straight and narrow – to regulate who can invest and how a qualified company (issuer) can participate. The primary goal is to protect investors and ensure a straight forward market place.

A great example is the Jobs Act Title II & Title III in the United States. It provides a clear path who can invest, how to invest, how an Equity Crowdfunding portal needs to operate and how the issuer can access capital.

There are two types of investors that can invest in equity crowdfunding:

Accredited investors are those investors deemed by the securities commissions to be high net worth individuals who would not be catastrophically impacted financially if an investment in a company seeking funds through Equity Crowdfunding fails. Each country has its own parameters but roughly the top 3-5% of a country’s population would qualify. Typically, issuers and the Portal must confirm qualification with the local securities rules.

Non-Accredited investors are the “rest-of-us”, the rest of the country’s population that do not meet the requirements to be registered as an accredited investor.

Equity Crowdfunding portals bring companies and investors together in a secure cloud computing platform. There are portals providing investment opportunities for accredited investors and non-accredited investors. Equity Portals will also vary on size of offerings and vertical industry sectors.

Issuers (i.e. the company) exchanges shares (securities) for investors’ money via a selected equity crowdfunding portal. Currently in most North American jurisdictions only accredited investors can invest in Equity Crowdfunding (with some exceptions).

In a nutshell, equity crowdfunding is a new method of seeking financing that allows companies of all sizes (including startups) to raise funds through secured online platforms, giving them access to large numbers of qualified investors.

Equity Crowdfunding gives companies (issuers) an attractive option for raising funds, and provides investors with the possibility of a return on their investment.

Contact me if you are interested in FREE eBook on Equity Crowdfunding. www.OscarJofre.com