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Daniel
onto Selected Topics on Crowdfunding September 12, 2016 4:16 PM
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There is a new ‘buzz’ going around in the investment game—crowdfunding investment. Though crowdfunding is a relatively new investment practice, existing bu
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What is equity crowdfunding? Best video describing FundedByMe and the game changer for funding our startups, companies and how to invest
Daniel's insight:
I have included this entertaining tutorial in the beginning of the newsletter. If you don't know a whole lot about crowdfunding, go ahead and watch this video. It has been made by FundedByMe; a Swedish crowdfunding platform which by the way is one of the two equity crowdfunding platforms that are currently operating in Norway!
Scoop.it!
There is a new ‘buzz’ going around in the investment game—crowdfunding investment. Though crowdfunding is a relatively new investment practice, existing bu
Daniel's insight:
Will equity crowdfunding overtake angel and VC? The World Bank estimated that crowdfunding would reach $90 billion by 2020. If the trend of doubling year over year continues, we’ll see $90 billion by 2017. To put that in perspective, venture capital averages roughly $30 billion per year and in 2014 accounted for roughly $45 billion in investment, whereas angel capital averages roughly $20 billion per year invested.
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Equity crowdfunding is growing, and fast becoming a real alternative to raising Venture Capital. Crowdcube have just claimed their first crowdfunded exit.
Daniel's insight:
Can venture capital investment and crowdfunding coexist? I personally think the answer is yes. Both have proven to be successful options for startups seeking capital, offering startups two distinct paths to their fundraising goal. However, venture capitalists seem to have misconceptions about equity crowdfunding and some are already downplaying its impact on the investment market.
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It’s no secret that crowdfunding has drawn more con artists in recent years. There's even a website dedicated to exposing crowdfunding scams on Kickstarter.
Daniel's insight:
As crowdfunding becomes mainstream, the potential for fraud will inevitably increase. It seems that each new day is accompanied by a scathing article or op-ed warning that we need to protect the general public from the impending onslaught of boiler room con-artists. Indeed, the issue of fraud protection has transformed the process of legalizing equity crowdfunding into a grueling, complex and contentious process – as regulators, industry stakeholders and special interests wrangled over new rules meant to protect investors from fraud.
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Vaishali Naroola looks at the risks associated with the crowdfunding sector to avoid the mistakes that led to the global financial crisis in 2008.
Daniel's insight:
Crowdfunding is a socially mediated phenomenon which relies in great part on the intrinsic trust people place in shared connections on social networks, community affinities, and the ratings of others on trusted, mainstream websites. But are the risks involved in crowdfunding well understood by those who participate in this market? If not, what are the potential consequences on the global economy?
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Crowdfunding offers great leverage for entrepreneurs. However, crowdfunding might pose threats to the security of a young startup. What are they?
Daniel's insight:
Crowdfunding can be challenging for those who haven’t protected their IP because once you reveal your company’s ideas to the public, it is often too late to protect yourself. It is therefor very important for startups and early stage companies to take the necessary steps to establish an IP strategy, an action that requires an investment into the IP.
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Will equity crowdfunding overtake angel and VC? The World Bank estimated that crowdfunding would reach $90 billion by 2020. If the trend of doubling year over year continues, we’ll see $90 billion by 2017. To put that in perspective, venture capital averages roughly $30 billion per year and in 2014 accounted for roughly $45 billion in investment, whereas angel capital averages roughly $20 billion per year invested.