Entrepreneurism – Oh, What A Tangled Web We Weave!
Entrepreneurship in the United States has gained a lot of mindshare even amid the distractions of the state of the world, the economy, the bottlenecked politics we observe, and the cautions facing us as we enter 2013 post-apocalyptic era (the Mayans just forgot the calendar formula after all).
The concept of entrepreneurs everywhere doing their thing and embarking on creating new businesses and eventually contributing the vibrancy and growth of the economy is the stuff of great drama played out on the stage of business.
And then, there is this thing called crowdsourcing. A very short historical perspective is that out of early crowdsharing activities of the early 2000’s, organizations and websites such as Artistshare (2000), sellaband (2006), IndieGoGo (2008), Spot.us (2008), Kickstarter (2009), and Microventures (2010), show an evolutionary path from interested parties sharing their interests, to sites hosting and sharing ideas from entrepreneurs seeking feedback, interest in purchasing, and in contributing funding to be a part of the development processes. Check the Goggle search for “crowdfunding” for over ten million hits.
2012 will be a remembered watershed year for at least one reason other than the fiscal cliff, the signing in to law of the JOBS Act (Jumpstart Our Business Startups) signed April 5th, 2012 by President Obama. It marked a period of the educating of legislators, and the initiation of a legislative process beginning in February of 2011, when Jason Best, Zak Cassady-Dorion, and Sherwood Neiss, began their quest to expand an entrepreneurs access to capital through the concept of crowd funding. They, as principals of Crowdfund Capital Advisors, formed Startup Exemption as a lobbying group to persuade members of the Congress to pay more attention to what was holding back a great many entrepreneurs concerning funding.
They lobbied to enhance and update the U.S. Federal Security Laws governing investments and the rules of engagement so to speak. Their vision as they explained to law makers, was to raise limited amounts of early stage equity-based financing to be made available to selected entrepreneurs. After a series of hearings in which they presented their views and a framework for operation, alongside those of the Business and Entrepreneurship Council (SBEC). Their efforts formed the basis with lawmakers of the Entrepreneur Access to Capital Act introduced by our own Rep. Patrick McHenry (R-NC), on September 14, 2011. The act proposed to greatly reduce restrictions on the equity crowdfunding activities of for-profit businesses. It proposed to modify both state and federal laws. After committee, meetings and redrafting added amendments to the bill, it emerged as the JOBS Act, and was signed in to law April 5th, 2012.
As with certain legislative actions such as the JOBS Act, the Securities and Exchange Commission, who is responsible for the regulation of equity and debt indsutry, needed to translate the JOBS Act in to enforceable rules and regulations, and develop guidelines for firms and individuals to participate in crowdfunding concept which was legitimatized by the JOBS Act. Aided by the Financial Industry Regulatory Authority, an independent watchdog organization, contributing additional clarity and rules to those engaged in crowdfunding.
The history of crowdfunding emerged shortly after the concept crowdsourcing caught on in the U.S. The folks who can claim credit for the legitimization of the crowdfunding industry, Crowdfund Capital Advisors, is today a well -established crowdfund industry consultancy firm, and estimates that during 2013 the debt and equity crowdfunding space to be $4.3 billion in its first year of operation. Money has been, and will continue to, flow from the more traditional venture and angel investors, towards the crowdfunding rallying points. Watch for continued growth in the number of web portals offering enhanced services in support of entrepreneurship to greatly expand in 2013.
Of interest to fledgling entrepreneurs is how to find money when it is needed to accelerate their idea into a launch able product, service, or business. Here are some additional resources to explore the crowdfunding industry and its players.
- National Crowdfunding Association [http://www.nlcfa.org ] Check for the membership directory (due to be implemented 2013)
- Microventures [https://www.microventures.com/investors/questionnaire/google2?gclid=CKrr… A crowdfunding pioneer
- Meetup website [http://crowdfunding.meetup.com/] Special interest groups interested in crowdfunding
- Kickstarter [http://www.kickstarter.com/] One of the oldest crowdfunding groups
So to all in the greater Raleigh area, I offer the year end thought. Look, think, act. Grab hold of that idea and translate it into action for the new year.