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Dignitary
 
Posts: 3486
Joined: 02 Oct 2000, 9:01 am

Post 18 Apr 2012, 11:33 am

I first learned about Kickstarter and the other crowdfunding sites on a post here at Redscape on the old site. I couldn't understand why someone would gift money to some else so that they could do their project. I've followed them since then, learned more, actually kicked in some $$ to a project on Kickstarter, but I thought, this will only be a hobby, with no equity exchange it can't be used for real investing.

Apparently, the recently passed JOBS act changes all of that. It legalizes crowdfunded equity start-ups. Want to be an angel investor and have $20 burning a hole in your pocket? Apparently on January 1 2013, you can become one; though the $20 limits you to being a tiny little angel.

Nice write up on the consequences here

Could completely change start-up investing as we know it.
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Ambassador
 
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Joined: 15 Apr 2004, 6:29 am

Post 18 Apr 2012, 2:45 pm

Kickstarter certainly looks interesting. I've seen it used by webcomics to move into book publishing, and it makes a lot of sense to guage the level of demand for something like that anyway, so doing it in a way that can actually stimulate demand is pretty cool.

The problem with traditional means of getting investment into business is that you either have to get through a bank or other big financial operation, or find a friendly venture capitalist.
Adjutant
 
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Joined: 18 May 2012, 9:31 am

Post 18 May 2012, 9:41 am

Once concern I have is the lack of awareness of the masses. Therre should be some form of education for crowd funding investors. CFIRA (Crowdfund Intermediary Regulatory Association) is the most likely candidate for this.

The Jobs Act and crowdfunding in particular will help small business's source capital from the masses and not have to depend on PE or VC firms. But it also benefits the investors. A higher level of risk is involved but with that risk comes higher reward. A good piece about crowdfunding relating to the Facebook IPO and the return an investor would recieve if they invested in Facebook. http://blog.sprinklebit.com/why-you-sho ... -facebook/