Rockefeller vs. Ford, Traditional Investing vs. Crowdfunding – History Has the Answers! — Over a 40-year career John D. Rockefeller used innovation and ingenuity to create a corporate empire unlike any the world has ever seen. But he was also notoriously ruthless and many believe he went too far, hence his reputation for eliminating business competitors. By 1896, Rockefeller was the wealthiest man ever born, but he had achieved this through exploiting his workers, creating vast monopolies, bribery, corruption, predatory pricing, and intimidation. Rockefeller became the richest man in the history of the world with a net worth of almost $660 billion dollars in today’s money.
OTHER HIGHLIGHTS
Portals Ask: Is my business model legal? Do I have to become a broker-dealer? This is the single most common question I get asked. There’s a lot of misinformation about this, so let’s clear it up… Keep in mind that a “platform” is just a website. It’s NOT a business in and of itself (people often confuse a 506b/c or Reg A platform with a Title III “portal” as defined in the JOBS Act, and they are very differrent things). A platform is simply a tool for general solicitation. So you are not a platform, you are an issuer/investment adviser/listing service/broker-dealer who might have a website that lists offerings of securities, might use other websites that promote offerings of securities, might use social media to promote offerings of securities, might run newspaper ads to promote offerings of securities, might send emails to promote offerings of securities. You get the picture.
The #1 Reason Why Crowdfunding Campaigns Fail Crowdfunding is becoming ubiquitous and success stories like the Coolest Cooler, Pebble or An Hour of Code for Every Student impressively demonstrate how this new wave of funding for startups, creative ideas and causes via the crowd can be used to turn dreams into reality. Undoubtedly the most successful crowdfunding campaign of all times, Star Citizen has raised over $88 million dollars at the time of writing this post and shows no signs of slowing down.
Pride, Respect and Motivation in Crowdsourcing
Motivating users to participate in competitions or to complete tasks is a crucial role of crowdsourcing intermediaries. The most straightforward way to motivate a crowd is through payment. Gamification can also play a role, with members of the crowd competing to grab the top spot on a leaderboard. But what else serves as motivation? A new research paper in the Journal of Management Studies looks to answer just that question.
When Crowdsourcing, Can a Crowd Be Too Big?
When a company decides to engage the crowd, getting a large number of responses is typically one of the main goals. The reasoning behind that is intuitive: by casting a wide net, a company increases the chances of finding a quality solution. But is getting a ton of responses really all that great? A new research paper shows the potential negatives of attracting a crowd too large.
Fraud on rewards-based crowdfunding platforms is a serious issue. The entire industry is, effectively, based on trust as backers give money before they ever see a tangible product. Each fraudulent campaign not only undermines the credibility of its creator, but of the entire industry. There are a few resources out there tracking suspicious crowdfunding projects (we wrote about one such blog in the past, which is no longer active), and we reached out to Rafa? Wrona, creator of CrowdFrauds, to find out how he became interested in crowdfunding fraud, and what backers can do to prevent themselves from getting duped.