A few weeks back, CrowdValley organized an industry panel to discuss various aspects of equity-based crowdfunding. This event, co-organized by CrowdValley, Oxford Valuation Partners and KPMG, focused on various aspects of equity based crowdfunding.
While the agenda covered key aspects surrounding Legal, Startup & Investor Confidentiality, Crowdfunding Platforms, Invested Capital Liquidity and Issuers, most of the conversation centered around the timing of crowdfunding becoming enshrined in law and the role of crowdfunding portals.
The lack of clarity with respect to timing from the SEC and regulators seems to weigh on the minds of entrepreneurs, crowdfunding portals and the industry at large. Entrepreneurs are eager to expand their funding sources while portals want to stay afloat until the JOBS act Title 2 and Title 3 are signed into law so that they can reap the benefits of this disruptive financing model.
Where investors are concerned, while some of the early adopters are eager to embrace this new paradigm, most of the seasoned and established incumbents still smell snake oil. This is just a typical "incumbent" mindset to ignore "cannibalizing" forces initially only to accept and embrace them in the future.
During the event, the panel and audience discussed the exact role of a funding portal. Of great importance is to understand that funding portals cannot recommend or advise any investment to their investors. Likewise, funding portal management cannot take part in any of the crowdfunding activities as investors or share holders, to limit damaging conflicts of interest.
In summary, any time a new disruptive paradigm takes root, we tend to overestimate the rate of growth in the near term and underestimate the over-all impact in the longer term. Crowdfunding as financial model is hear to stay, albeit with some initial sputtering and growing pains.
The lack of clarity with respect to timing from the SEC and regulators seems to weigh on the minds of entrepreneurs, crowdfunding portals and the industry at large. Entrepreneurs are eager to expand their funding sources while portals want to stay afloat until the JOBS act Title 2 and Title 3 are signed into law so that they can reap the benefits of this disruptive financing model.
Where investors are concerned, while some of the early adopters are eager to embrace this new paradigm, most of the seasoned and established incumbents still smell snake oil. This is just a typical "incumbent" mindset to ignore "cannibalizing" forces initially only to accept and embrace them in the future.
During the event, the panel and audience discussed the exact role of a funding portal. Of great importance is to understand that funding portals cannot recommend or advise any investment to their investors. Likewise, funding portal management cannot take part in any of the crowdfunding activities as investors or share holders, to limit damaging conflicts of interest.
In summary, any time a new disruptive paradigm takes root, we tend to overestimate the rate of growth in the near term and underestimate the over-all impact in the longer term. Crowdfunding as financial model is hear to stay, albeit with some initial sputtering and growing pains.
About the author - Vamsi Sistla
Vamsi is an innovative technologist with over 15 years of experience in the Television, Media & Entertainment industry, and has built various enterprise software and technology platforms. Currently he is involved in a stealth startup building a digital venue for live concerts. In the past he was technology co-founder for three start-ups in the interactive TV, mobile events and social TV domains. He worked for media and entertainment giants such as Gemstar TV Guide and Rovi Corp. He has many years of experience in mobile platforms, social TV tools, video streaming, enterprise applications and e-commerce.
He is an active Angel investor in ARC Angels, Eniac Ventures and an active TIE Angel. Vamsi is also active in social and impact enterprises as a mentor (The Unreasonable Institute, SpringBoard IoT & 37Angels), an advisor to various early-stage startups and a blogger.
Vamsi is an innovative technologist with over 15 years of experience in the Television, Media & Entertainment industry, and has built various enterprise software and technology platforms. Currently he is involved in a stealth startup building a digital venue for live concerts. In the past he was technology co-founder for three start-ups in the interactive TV, mobile events and social TV domains. He worked for media and entertainment giants such as Gemstar TV Guide and Rovi Corp. He has many years of experience in mobile platforms, social TV tools, video streaming, enterprise applications and e-commerce.
He is an active Angel investor in ARC Angels, Eniac Ventures and an active TIE Angel. Vamsi is also active in social and impact enterprises as a mentor (The Unreasonable Institute, SpringBoard IoT & 37Angels), an advisor to various early-stage startups and a blogger.
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