posted Jun 3, 2013, 12:10 PM by Andrew Manzo
updated Jun 4, 2013, 3:55 PM
|What’s new about crowdfunding, you ask, that is not already in place? Why will this simple innovation have such profound impact?|
Here is a listing…
- There were so many obstacles and upfront costs to funding new ideas with the old methods that it discouraged most to participate.
- The average IPO in the USA costs more than $2.4 million up front to have the first right to sell shares of a company to the public with limited general solicitation allowed.
- Crowdfunding will be the spark that gets people that never before thought of investing in a startup in their community to do so now.
- Social sharing of great new ideas is contagious. Multiple social media platforms stretching the world have been developed with billions of participants. The crowdfunding law change will unleash the enormous power of social media to mate good ideas led by good people with capital. This will change the world.
- The small entrepreneur with little resources to start will now be empowered.
- Economic growth is driven by innovation. Innovation is driven by experimentation. Crowdfunding funds experimentation.
- Lots of funders equals lots of help equals a better chance of success.
- Ben Franklin said, “Money is a proliferative by nature. To make the second dollar is much easier than the first. The trouble is making the first.” Crowdfunding provides the first dollar.
- Consumers that are investors are a powerful combination to propel a company upwards.
- Early adopters SHOULD be the ones that get the reward opportunity to invest early in a great new idea. Their feedback often is what creates the final successful version of the product.
- Why shouldn’t smalltime Facebook users be the ones to profit from Facebook stock appreciation instead of outside big scale financiers that likely have never been a Facebook participant. There is a social justice to crowdfunding that makes sense.
- Crowdfunding is more likely provide more fair and equal access to capital to women, minorities and youth than the old gatekeeper systems of the past.
There are approximately 60,000 angel investors in the USA now. Crowdfunding is likely to create 60 million new angel investors in the USA alone. This is a powerful transformational development that alters the landscape of financing forever more.
Albeit rare, with Crowdfunding in action there will be housewives that think of an idea on Monday and will have $1 million in the bank to pursue their dream by Friday. Peers that believe in them and their cause will fund good ideas expressed by people that gain trust quickly. Since most crowdfunding investments will be small it will enable new experiments to be tried. With micro financing testing new ideas and testing new investments can be done with a minimization of individual pain in the case of failure. People may gamble a $25 bet on a long shot that normally would never get funded if the minimum investment VC style were expected to be $250,000. Some of these long shots that get funded by crowdfunding, that would have never have received funding with the old financing paradigm, are going to be the ones that change our world for the better.
Crowdfunding is going to be a tool for people to invest in their own communities.
This type of helping hand support to people in your own communities will help create sustainable economic health. The growing movements of Local Investing, Buy Local and Impact Investing will all be supported with Crowdfunding at a primary financial tool.
Crowfunding will be teamed with crowdsourcing of information and resources. Every enterprise will become an exercise in the power of collaborative communities.
Of the 7 billion people on earth perhaps ¾’s or 5 billion are engaged in work that does not energize them to be the grandest vision of themselves. Crowdfunding has the potential to do more than anything before in getting more people than ever excited to go into work each day.