Memorial Day Announcement:
 On Memorial Day, let us remember all those who gave away their comforts and lives so that we can enjoy 365 days of our lives with our family. Wishing you Happy Memorial Day.
We THANK YOU for your sacrifice. We’ll see you bright and early Wednesday morning.

Fintech is one of the fastest-growing sectors for startups and within tech. As bitcoin and blockchain technology continues to get more popular, and millions pile into crypto, it seems like an opportune time to dive into the history of fintech and where it’s going. After all, some of the best startup investors and entrepreneurs of the 21st century got their start in the fintech sector.

Fintech 1.0

While there were major developments between the 1860s through 1980s (that we’re dubbing Fintech 1.0) thanks to innovations by the Pantelegraph, Amex, and Barclays, for the sake of brevity, we’re going to skip ahead to the 1970s and start with a familiar face that is the Nasdaq.

One of the most important fintech developments of all time was the setup of NASDAQ in 1971 as the first Electronic stock market. It was shortly followed by the introduction of SWIFT in 1973, a revolutionary international payments system used throughout the world to this day. You may have heard of Russia being recently kicked out of SWIFT by the USA and EU as part of sanctions against the invasion of Ukraine.

Fintech 2.0

The 80’s saw the development of electronic trades and online banking systems. Tradeplus (E-trade) introduced the E-trade for the first time in 1982 for its customers, and more importantly these baby commercials in 2008.

Another major breakthrough was the evolution of E-commerce during the mid 90’s. As adoption of the internet became mainstream via the dot com boom, people got accustomed to buying things online. 1998 saw the launch of Confinity, which later became PAYPAL, founded by venture capitalist Peter Thiel, Max Levchin, and Luke Nosek prior to Elon Musk joining via a merger in 2000. Paypal became the pioneer of cashless payments in years to come, which helped bridge the gap for merchants who did not have the necessary hardware to accept credit cards.

Fintech 3.0

The most recent stage of fintech was the development of Bitcoin in 2009, and then the creation of P2P payment systems and other cryptocurrencies in 2011. Since then hundreds of new projects and unicorns have launched- BaaS, RegTech, Digital Lending, InsurTech, Wallets and many more segments are seeing growth and innovations on a daily basis.

Companies like Square (Block) and Venmo (owned by Paypal) are the leaders in the USA, integrating crypto transactions with digital wallets, while M-Pesa in Africa, Payment banks in India, and Allpay in China are showing that the fintech sector is hot no matter where you go around the globe. 

Even central banks are looking at digital currencies as a possibility to achieve their goals, with China launching the digital Yuan this year. The global market for fintech was valued at around $7.3 trillion in 2020, and is projected to grow at a compound annual growth rate (CAGR) of 26.87% through 2026 according to Research and Markets.

Fintech Today

Today’s markets are still obsessed with the financial attributes of Bitcoin but the programmable blockchain networks of the future, like Ethereum, are re-inventing data standards to create a more efficient finance development ecosystem. Web 3.0 and the Metaverse will lead to new fintech and ecommerce possibilities, so it looks like the fintech revolution is just getting started.

So, where does that leave you? Well, keep reading The Boardroom, because we’ll keep you up to date on early stage private companies looking for capital, and who knows, maybe you’ll even learn something along the way. 

The Fintech sector is one of the fastest growing out there. Today I wanted to introduce ABC Fintech and how it’s creating an asset backed crypto (ABC) to provide investors with a more liquid way to own real estate.

ABC Tokens are digital securities, regulated by the U.S. SEC and backed by physical commercial real estate assets, reducing risk and volatility typical of most cryptocurrencies.

Commercial real estate has been notoriously illiquid. ABC Tokens will be listed on multiple secondary exchanges, providing ABC Tokens investors with a quick and easy way to divest at market value.

The value of ABC Tokens is underpinned by the Net Asset Value of the real estate portfolio. ABC’s portfolio is diversified across major asset classes (e.g. multi-family, industrial, office, retail and hospitality) and alternative sectors (e.g. data centers), giving token-holders diversification and thereby helping to manage risk.

For crypto enthusiasts, ABC provides stability by offering a security token that is truly backed by hard assets (our commercial real estate portfolio).

In Q4 2021, ABC sold security tokens to friends and family, closing on $3,000,000 of commercial real estate to validate the concept.

Watch their video above or check them out here!

+ Back to School – Learning about Fintech (link)

+ Great, more tabs to keep open – Eight Fintech Websites to keep in your bookmarks (link)

+ The Future is Here – The Future of Fintech (link)

Hopefully this isn’t any of you at the end of this newsletter

https://ecredo.com/wp-content/uploads/2021/04/fintech_meme.png

Starting Off:
One of the most exciting aspects of investing in startups is the thrill of being there at the beginning of a new project that may result in some fruitful future returns. But prior to the last decade, the chances of an individual investing in a company before it registered with the SEC were about 0% unless they were an accredited investor. This essentially made investing in startups the privilege of the already wealthy while the rest of us were left in the dust.

Why Accredited Investor:
The logic behind establishing the title of the accredited investor was not meant to throttle the monetary power of the American people; rather, its goal was to protect them from losing everything. Naturally, investing in a private offering involves the possibility of loss, and the SEC thought it a good idea to establish a class of investors who’ve been proven to understand that risk and who also have the capital to lose. And thus, Rule 501 of Regulation D was born in 1982, ushering in the era of the accredited investor.

The problem is that the requirements for becoming an accredited investor were far beyond the earning power of the majority of America’s middle class. If someone wanted to become accredited, they would have needed to earn an annual income of $200k for the past two years or have $1M in assets (and that’s EXCLUDING their home). At least that number hasn’t changed with inflation, but it’s still a tiny portion of American households who’d qualify for the title with those requirements.

What Regulations:

Last week we talked about Regulation Crowdfunding, the practice codified in 2012, giving rise to crowdfunding platforms like Wefunder. Fortunately, the SEC and legislators came to a realization after the turn of the century and determined that Rule 501 was short-sighted. Last week we talked about Regulation Crowdfunding, the practice codified in 2012, giving rise to crowdfunding platforms like Wefunder. Since the 2010s, there have been multiple reexaminations of the requirements, which have opened up investing in startups for many more Americans. The buck didn’t stop there, though- as the SEC finally amended rule 501 in August of 2020 to create new categories of accredited investors that disregarded personal wealth. It took almost 40 years, but that’s pretty fast for the federal government.

Closing:
Expanding the definition of accredited investor opened a new door for gaining accredited status by becoming an investment adviser representative via FINRA’s Series 65 exam. This is excellent news for the more bookish of us, but choosing this path requires paying several fees and extra steps post-exam to keep the SEC happy.

The Results:
Thankfully Regulation of Crowdfunding has blown the doors off the whole thing and opened the startup space to even more people. It still may be a hassle to attain that Accredited title, but there are now so many more avenues for the individual investor to seize the day- make sure you’re one of them.

In today’s article, we discussed how regulation crowdfunding opened the world of startups to the average investor.

I wanted to highlight a business whose life-changing technology could not have been possible without Reg C, ATOM LIMBS.

Unlike lower-limb amputees (LLA), upper-limb amputees (ULA) are about half as likely to wear a prosthesis. This is largely because they are unwieldy, ineffective, and uncomfortable.

ATOM LIMBS seeks to change that by incorporating AI, modern robotics, and modern wearable technology into its revolutionary designs.

Having achieved its funding goals via Wefunder, ATOM LIMBS is an excellent example of the power Reg C has to change the market and the lives of others.

In the words of found and CEO Tyler Hayes: *No one* should have to live with a permanent injury or disability. We have reusable rockets and electric cars… it’s time for artificial limbs.

Watch Wefunder’s spotlight video or check them out here!

+ Know Your History – The Saga of Accredited Investor Status Pre-Expansion – (link)

+ The Nerds Know All – Harvard Law Examines the SEC’s expansion of Accredited Investor Definition – (link)

+ Back to School – An Overview of the Series 65 Exam – (link)

New year, new me…. Just not the way I thought, via investingcom

As summer quickly approaches and barbecues are on the horizon (except for you, vegans), it seems appropriate to discuss an industry that no doubt affects your life every day: the business of food. It’s sometimes taken for granted, but with the world’s population growing every day, our food systems will likely face some serious challenges in the coming decades.

Initially, one might assert that having production meet increased demand for food products is the primary concern for the sector. However, the pandemic has taught us that systems can slow down, logistics can be put on pause, and mere access to goods can become a challenge for the consumer. Add in variables of environmental impact and sustainability, and we get a multi-dimensional challenge.

One of the most significant issues facing our food systems is the long-term degradation of soil quality, with traditional practices leaving it depleted of nutrients for healthy crops. Dutch startup Freesoil is an excellent example of this. Their high-quality compost extract adds microorganisms to the soil, which partners with plants to ensure healthier conditions.

Soil quality isn’t the only area to focus on, as you can expect advances in agro biotech, urban farming, and AI to have their own impacts to help solve agriculture’s woes. There are appropriately futuristic solutions for automation and drone farming (look into startups Advanced. Farm, and Nexus Robotics if that tech interests you), but as you can see, robots aren’t the only tech set to revolutionize agriculture.

This may not be as glamorous of a future industry as EVs or private space travel, but one could argue it’s slightly more important given you need food to survive every day. The world’s governments will likely be investing in food production in the coming years, so food-focused startups are only just getting started.

But what do you think- is food a sector you’re watching? Maybe it’s AgTech, or AI, or just an entirely different focus along the food supply chain. I’d love to hear from you, so reply back to this email and let me know your thoughts.

The Food Sector has been Growing. (Pun intended)  In this article, we discuss 2 different types of food startups.

Today, I wanted to introduce how FULL HARVEST is bringing the food industry digital while trying to solve the food waste problem when it comes to farming.

The ​​USDA’s Economic Research Service (ERS) estimates that about 30 percent of food in the United States goes uneaten at the retail and consumer level.

FULL HARVEST takes imperfect crops and finds a buyer on their easy-to-use digital software.

This company saw an issue and created a gateway to help the supply-chain crisis regarding our food.

With a product like food, the shelf life is limited, and time is of the essence to get food to buyers.

Christine Mosley, Founder & CEO, vision: “My vision is a world where there is 0% food waste and 100% ‘full harvests,’ where all edible produce grown goes towards consumption. We aim to reinvent the produce supply chain with technology to bring the industry online and maximize resources.”

Watch their video above or check them out here!

Reminder:
May 25th, The Boardroom is going live, and I would love for you to join me.

Add event to calendar

+ Forbes’ Take on the Future of Food Tech – (link)

+ Trends and Startups to Keep an Eye on – (link)

+ A Look at Urban Farming – (link)