Private transactions are a vast, often unstructured market with a big emphasis on informal networks. Just think of all the ‘friends and family’ money in the early stage investing market, the angel networks and the importance of their activity. In recent years the uptick of small funds, ‘super angels’, online syndication and co-investment models have paved the way for various family office, smaller funds and private investor networks to question the way they operate. Could structuring the informal networks into a catalyst for larger impact bring more bang for your buck?
The future of Asia’s crowdfunding industry is looking to change in a highly promising manner as a number of countries have pronounced their ambitions for crowdfunding. Singapore aspires to be the crowdfunding capital of the region, and has pronounced this claim by hosting the very first Asian crowdfunding summit, a promising first step.
Her Majesty (HM) Treasury has announced that as of July 1st, 2014 peer-to-peer lending is being given tax discounts for the first time in UK history. The radical reformation will take place within the Individual Savings Account (ISA) system.
The SEC has released a set of proposed rules for implementation of Title III of the JOBS Act, FINRA has released proposed forms and rules for the required registration by funding portals and new rules on general solicitation and general advertising have been put into effect.
But where does that leave the market now? Despite the proposals, the Title III crowdfunding market is not open and won’t be for another few months. Furthermore, questions remain as to how navigable that market will be for newcomers and how profitable it will be in the short to medium term.
In a recent academic study it was explained that one of the advantages of crowdfunding is that it allows entrepreneurs to overcome the spatial proximity limit and to find investors that may be located even far away from them. However, lately we have also been witnessing the development of crowdfunding that seems to go in the opposite direction: local crowfunding, that is crowdfunding for projects and investors who are located in the same area or neighborhood.
“Crowdfunding platforms could naturally evolve to become the primary source of financial services for young generations” Nathaniel Karp, chief economist for BBVA Research, US Economic Outlook, 2nd Quarter 2013
There is a growing sense that our industrial age capitalism has reached a pivotal point in its evolution. Even people who have long and deep experience of working in the financial system believe it needs change.
There is a big mismatch between the financial support today's real economy needs and what financial markets are able to deliver. The banking industry is run by a select few large organisations, which are allowed to create money effectively out of nothing, and which are big lenders to unsustainable sectors such as the coal industry.
Crowd Valley COO Paul Higgins took part in a debate entitled: “Equity Crowdfunding – Fools' Money or Financial Revolution?” at the Colorado Crowd event in Denver on 3rd May 2013.