Crowdfunding, Creates a Conundrum for Regulators…
October 10, 2012
I vividly remember preparing the business plan for Ark Fund Management, a firm I founded that subsequently merged with Redwood in 2009.
As part of the journey into entrepreneurship, raising money from interested investors was also something that took time and energy.
I’ve watched with great interest over the past few years how many crowd-funding websites have started up, and how micro-finance has developed.
The US Government has even loosened up the rules (in conjunction with the SEC) with the Jumpstart our Business Startups Act. The Globe wrote a good article on why we in Canada are quite a bit behind the US in allowing these initiatives. http://www.theglobeandmail.com/report-on-business/economy/economy-lab/crowdfunding-why-canada-is-far-behind-the-us/article4104713/
Here are some websites that have caught my eye over the past few years.
KIVA – leading microfinance site www.kiva.org/
Kickstarter – a crowdfunding site for creative projects, like movies and documentaries. http://www.kickstarter.com/
Dealmarket – a private market for transacting in private investments like Private Equity companies, funds etc. https://www.dealmarket.com/
Here’s a list of the “Top 10 Crowdfunding Sites” http://plantostart.com/10-crowdfunding-websites-entrepreneurs/
Regulation is going to need to change as businesses find alternative avenues to finance themselves. The regulations didn’t conceive of a large number of people, making small investments – and sometimes with some level of consideration. The Accredited Investor rules are supposed to protect people from complex investments, but who doesn’t want to own a share in their local ice cream store, especially if it pays dividends in mint chocolate chip?