Let’s talk Reg A+, liquidity, data bubbles & the heart of crowdfinance
The Core Mission of Crowdfinance
March 10, 2015 By Dara Albright
I spend many waking hours advocating for crowdfinance and preaching about the economic repercussions of an unjust financial system that inhibits entrepreneurs from procuring growth capital and restrains unaccredited investors from acquiring higher yielding private securities.
I’ve dedicated more than four years to this endeavor because I wholeheartedly believe that a fundamental shift from institutional to crowd investing is crucial to preserving the capitalistic principles that fueled centuries of global innovation and upward mobility.
Because the fate of future generations depends upon the success of this mission, it is imperative that the underlying purpose of crowdfinance doesn’t get lost in the industry’s unbridled enthusiasm or lapses in judgment.
Crowdfinance emerged in response to deficiencies in capital formation. Through the melding of technological achievement and regulatory easing, crowdfinance is able to offer a more practical solution to enriching the capitalization process.
Crowdfinance provides businesses with the unprecedented ability to crowdsource inventions, pre-test product launches, gauge consumer demand and convert consumers into loyal stakeholders. This process gives weaker companies the chance to rectify flawed products or business models prior to raising sizeable rounds of capital. It also helps ensure that sounder startups make their way to a larger pool of investors.
While crowdfinance is certainly helping to democratize the flow of capital, it was never intended to guarantee it. Although, every business and investor – no matter the size – should be granted equal opportunity to access funds and build wealth, not all inventions or business plans are deserving of finance. Capital and profits are not entitlements; they are rewards which are derived from delivering quality products and services as well as from performing proper due diligence.