Crowdfunding to become mainstream?
Super angel David Rose says crowdfunding is likely to become a mainstream revenue channel for startups
Thursday, November 10 2011 || News || BY Fiona Rotherham, BusinessDay
He was the keynote speaker at this week's Angel Summit in Tauranga where he talked about global trends in angel investing and the growth of his own entrepreneurial activity, Gust, which operates a collaboration platform for early stage equity investing that is now used by investors in 65 countries.
Crowd funding started off as a way to raise capital for not-for-profit projects. It works by a large number of people giving small amounts of money to projects through various social media websites in return for rewards like a free T-shirt or CD.
Wellington-based PledgeMe is the first such crowd-funding platform in New Zealand.
Until now it has been illegal under securities laws in many countries, including New Zealand, to sell a piece of your company this way. In New Zealand you have to have a registered prospectus or sell to habitual investors – those who make their living off investing.
But Rose says new legislation being considered by the US Congress could make it easier for businesses to be crowd funded by selling stock to small investors.
Crowd funding has taken off in the US, Rose says, with about US$100 million raised so far to fund various projects.
"People will typically contribute anywhere from US$5 to US$500, in some cases several thousand dollars if they believe in the project," he says.
It's not a big step for start-up companies to then look at the same method to draw in small investors to crowd fund the money they need to grow, he says.
"Up until now angel investing has not been available to Joe Blow because Joe Blow has not been an accredited investor, so what these new regulations in the US do is open up a new category of fund raising," he says.
How to help make crowdfunding run as responsibly as possible? Can we help eg http://www.TRAIDmark.org PLUS Crowdsource video for all E.G. http://www.WEBiversity.org or working with http://www.spot.us http://www.internews.org http://www.oneworldhealth.org http://www.interhealth.org.uk http://www.drumbeat.org
More details and free info at http://whymandesign.posterous.com/helpall-creatively-innovate-selflessly-webive
Posted by ed whymandesign.com at 09:29 on November 28, 2011
ReplyFlag abuse