The American Dream Gets Crowded
By Azam on July 4, 2012
The only thing I can think of more American than Apple Pie on the 4th of July is the American Dream. Kickstarter literally kick started the crowd funding movement as many smaller contributions are invested in projects to get funding. Kickstarter and Indiegogo have been 2 main players in the crowd funding space. Kickstarter works by setting a target amount to raised which gets released if goal is met; Indiegogo works by raising funds by project without target goal having to be reached. This made Congress move to pass the Jumpstart Our Business Startups in the Jobs Act. The idea is that people should be able to invest in others with entrepreneurs in effort to create jobs. Previously, investment was restricted to qualified investors to protect smaller investors from themselves in their investment decisions. Wall St proved that qualified experts are just as good as others at losing massive amounts of money and need government help to save them from themselves. A new breed of investing in investing is developing to fund smaller and more diverse types of companies closer to home than the financial center.
A number of companies are taking different approach in funding new ventures. These crowdsourcing firms are gearing up to address the large opportunity while the legal regulations get played out. Expert Financial is addressing the problem of private firm that does not necessarily want to go public. Expert Financial is creating an alternative financial trading platform to trade private shares. Expert Financial strategy is to work with companies directly to trade shares as opposed to others like SecondMarket and SharePost are broker dealers.
MicroVentures is taking a more traditional approach with an online approach with peer to peer accredited investor marketplace strategy. The pool of investment gives access to private companies looking to raise capital. MicroVentures operates as a broker dealer and vets investment opportunities.
AngleList is an innovative social way to fund startups. Angel.co is very well designed site that allows investors and startups to view others. The site allows you to follow investors and startups to gain audience and attention. Prominent investors are on the site, and a number of high profile startups are being followed in the site. A number of invesotr angels funding and/or investment rounds have closed on AngelList
WeFunder and CrowdFunder are addressing the opportunity created by the Jobs Act. They are not operational as result for the rules to be established before they start raising capital from small to fund startups.
Crowdtilt is taking a different approach with group funding, raising for a cause, or for anything. Users can fund a trip or anything you can come up with. Crowdtilt raised their own funds with 10,000 users themselves before raising from professional investors.
Tags : , crowdtilt, indegogo, kickstarter