dinsdag 26 oktober 2010

1,802,330,457 potential crowdfunding-investors in your network

In my latest blogpost the term Equity Based Crowdfunding was introduced and despite the promise to blog about investment criteria for Crowdfunders (e.g. believers) I’ve decided to blog about the vastness of this potential group of investors, just a heads up the results are astonishing!

First a small recap, I’m still convinced of the fact that  a  radical innovation has to take place in the way we practice entrepreneurship and the way we finance entrepreneurship. We live in a world that is becoming extremely flat (global village), all due to the fast dispersion of the internet. Many traditional value chains migrate to the internet, and this migration withholds  a great entrepreneurial opportunity to upset the traditional picking order, the success of www.amazon.com is an example of an excellent executed plan based upon exploiting such an opportunity.

As many traditional value chains can be replaced by digital ones, question remains why the value chain for investments hasn’t been migrated to the internet yet? In previous posts it became amply clear that regulating forces are at work here,  these forces prevent an equity based method for fundraising over the internet, simply because this legislation is outdated and dates back to the days we didn’t had access to the internet.  

Imagine you could invest a minimum amount directly in start-ups? You go to a website, you select an attractive business plan that suits your expertise or a proposition you truly believe in and you activate your network by letting them know you juts invested in a start-up. According to the “six degrees of separation” theory, it should be possible to connect with anybody on this planet within 6 steps, what about organic marketing?  

This means that if you, as an investor, are able to plug your investment in your  network you should have a theoretical reach of 1,802,330,457 potential investors (based upon the average number of persons worldwide with a tendancy to invest, source: GEM).  This number clearly shows the vastness of this group, could very well mean a full alternative for the ways entrepreneurs obtain start-up capital nowadays.  

And the best part is yet to come, these potential investors don’t behave as banks, they are people who have a interest in the success of the venture that goes beyond a simple Return on Investment. This implies that they will do almost anything to help you succeed as an entrepreneur (e.g. Crowdsourcing).

Combining Crowdfunding and Crowdsourcing are not only ways to obtain information, aid and finance but used together they become a whole new breed of organization. These organization are operating in closer proximity to their customers and suppliers and by using the newest technologies become more agile than their peers to co-opt with the ever changing business environment. Who is in?

Kind regards,

Thomas Crowd


zaterdag 16 oktober 2010

Crowdfund News introduces Thomas Crowd as principal editor

For a while now we have been informing you about everything that is going in the Crowdfunding and Crowdsourcing industry. What started out as a hobby has now become a day job, which should be managed by somebody full-time. So to keep you perfectly updated, Crowdfundnews’s very own Blogger Thomas Crowd, will also act as a principal editor. For everybody out there who is submitting links, stories and other great resources for our channel, please keep on doing it via thomas.crowd@symbid.com. Here are also some social channels from Thomas for everybody interested in connecting with him.

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Beside our readers and contributors we would like to thank our sponsors, www.crowdsourcing.org and www.symbid.com for making this professionalization of Crowdfundnews possible.


woensdag 13 oktober 2010

Introducing Equity based Crowdfunding

After connecting with many like minded people in the realm of Crowdfunding (people connected to some of the world’s most profound approaches towards Crowdfunding) , I must conclude that the industry is developing at a fast rate. However are we going in the right direction? Of the 200 Crowdfunding sites out there, not one is offering a straightforward equity model to wheel in believers and the necessary investments needed to spark innovation from the bottom up.

And  this makes me wonder if Crowdfunding in this form will ever becoming mainstream? I’ve never made a secret of my dislikes towards the banking industry, as we know it nowadays, and their inhibiting effect upon investments made in start-ups and SME’s. These effects are mostly due to the  decision criteria banks use in order to assess investment opportunities. With the rise of Crowdfunding a different kind of investor is entering the playing field - the believers. Although they use a more subjective approach towards their investment decision and therefore make more (micro) investments possible. Fact remains that the lack of offering  a return on investments is a major hurdle for the industry to overcome. The reasoning behind this remark is simple – Crowdfunding will never be an equal funding opportunity for entrepreneurs if the potential amount of money available by Crowdfunding is too little.

Concluding that if we want Crowdfunding to be a new way of financing, a more subjective approach towards the capital fulfillment of start-ups and SME’s is needed and the industry has to move towards a model that is based upon equity and return on investment. This all to wheel in the main stream audience. Preferably the industry introduces a model were Crowdfunding becomes an alternative stock exchange, were believers can trade their crowdfunded propositions with each other. I’m sure there is a global interest in such an exchange, that no longer makes the “little” man obsolete, as is happening with “normal” exchanges (as they are dominated by the electronic high volume traders). If the industry is able to come up with a solution for solving the problem stipulated above Equity based Crowdfunding will become the new norm.

I’m very interested what your take is on the industry and if you agree to my opinion, that if we want Crowdfunding to become a  full alternative for other ways of financing such as banks, angel investors or venture capitalist, the industry has to move to an equity based model.

Kind regards,
Thomas Crowd

Ps: Next post will be all about investment decision criteria for believers, so if you are believer in a crowdfund proposition please tell me what your criteria were for investing.