My Thoughts on Crowdfunding…

  • Posted by
  • on April 1st, 2012

While The JOBS Act may have just passed this week, Crowdfunding has been scaling since 2008. The masses continue to scream about ‘Too Big To Fail’ while their 13-year old smartphone native niece is crowdfunding her third startup on Facebook. I am a strong believer in Crowdfunding. I live and breathe it. I am also a strong believer in ‘know Your client’ and as an investor in so many startups and stocks over the years ‘buyer beware’.

While America continues to lick its wounds from stupid borrowing, Citibank, Bank of America, France, Italy, Spain and Greece…the few crowdfunded their way to recovery. They used the social web, the social graph and what I call ‘Social Leverage‘. They have embraced what I call ‘Too Small to Fail’. They are coding, hacking, mentoring, accelerating and attacking at a relentless pace…at angles that can’t be defended. In 50 years, we will all work for ourselves and as Naval says…plug into an API somewhere to produce, consume and transact. Citibank is redesigning their offices with TARP money to attract young talent…but the talent is networking on places like AngelList to work at a startup that will bleed them to death slowly.

Citibank and Bank of America are Yahoo with ATM’s and pillars. Goldman is not going anywhere no matter what we fine them or how many passed over partners learn to use Tumblr. They survived and we need to get over it. It is Apple, Nike, Starbucks, Intuit, Schwab, Linked In, Facebook, Google, Interactive Brokers, Visa, MasterCard, American Express (yuck), Silicon Valley Bank and a slew of other companies you have never heard of yet that will rule the future. Figure out how to work for them or start a company that gets in their grill!

The terms ‘angel investing’, ‘social network’, ‘crowdfunding’ and now ‘big data’ have tipped. Crowdfunding the term is not new. Here is Wikipedia on the subject. The charity industry has been using crowdfunding forever.

We have an almost perfect storm for startups:

1. Governments are printing money (liquidity)
2. Election Year
3. Social Graph
4. Smart Phones
5. The JOBS Act

I would expect some crowdfunding setbacks including ‘crowdscamming’ of course, but the criminals have been using email and the phone for decades now. I hope we can focus on enforcement of the rules rather than pandering for more rules to slow the inevitable down.

If you don’t yet understand the power of crowdfunding, go spend $100 on Kickstarter (indirect investor), GiveForward (investor). These are examples of #winning.

Don’t chase crowdfunding in 2012, but learn how it works and embrace it. It’s not early anymore, but it’s definitely not late.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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