Should You Crowdfund with Clients?


BY Lauren Barack, Think eTrade revolutionized online financials? Welcome to crowdfunding — the ability to for anyone to invest in nearly any kind of option or entreprise over the Internet at any time. “Crowdfunding is essentially an very old ancient concept,” says Jason Best, co-founder of Crowdfund Capital Advisors, advising investors and entrepreneurs on soliciting funds through crowdfunding. “What new is the ability to publicly solicit via social media. It’s going to a very big change.”  Nearly anyone who spends time on the Internet is familiar with Kickstarter — the online site that offers rewards to crowds of users who kick down (usually) small sums of capital to help launch a new satellite, self-cleaning shirt or an all-natural licorice company. The firm is expected to tip $1 billion in funds raised sometime in 2014.  Crowdfunding however is different. Here’s there’s no promise of a key chain, vintage postcard or a rainbow array of sweets once the project is funded and completed. Here the reward is un-promised — an investment made in a small business or start-up that may pay a return — and more likely will not. After all, 50 percent of small businesses fail in the first five years according to the U.S. Small Business Administration. To date, investors have long had the opportunity to invest in a friend’s new bar, a sister’s catering business or an uncle’s new bike shop, but not through general solicitations.

But Title III of the 2012 Jobs Act, should open the doors to allow companies to solicit investments from literally anyone — accredited or not. It’s now in a 90-day comment period expected to close in January 2014. Online firms are lining up, getting ready for what they believe is bound to turn investing on its ears. There’s even talk of launching an accreditation for reps through the nascent National Crowdfunding Association, says its executive director David Marlett. Yet, even some of crowdfunding’s biggest cheerleaders are asking: Is this the right investment vehicle for everyone?


ForbesHow Crowdfunding Can Supercharge Your Campaign In 2016ForbesThey say that there are about 7.45 billion people living in this world right now. Imagine that if you could get each of these seven-and-a-half billion people to contribute one cent to your project, well, you know what I [...]

ForbesHow Crowdfunding Can Supercharge Your Campaign In 2016ForbesCrowdfunding has helped a lot of businesses recently. Want to join the queue? Here's how to raise funds for your projects.and more » [...]

San Antonio CurrentSan Antonio Cat Cafe Launched 20K Crowdfunding CampaignSan Antonio CurrentAs Austin's Blue Cat Cafe turned one (and dealt with some gnarly vandalization), San Antonio's Cat Cafe launched a GoFundMe crowdfunding campaign to help open its doors. Casey Steuar [...]

BillboardCrowdfunding for His Life: How GoFundMe Helped Save a Punk Legend's LifeBillboardSo on the advice of a close friend, Julian -- like an increasing number of aging musicians without a lucrative record contract -- turned to crowdfunding, launching a campaign on the No. 1 pl [...]

Minneapolis Star TribuneSEC releases new, relaxed rules on investment crowdfundingMinneapolis Star TribuneNew rules announced this week will make it easier for small companies to raise capital from small-time investors, another step forward for Minnesota's fledgling investment cr [...]

The GuardianCrowdfunding: the new buzzword for academics needing research moneyThe GuardianArchaeologist Dr David Petts, from Durham University, has also used crowdfunding, raising almost £25,000 to fund a project on Lindisfarne, off the Northumberland coast. The dig, in June, led to [...]

How Crowdfunding Has Changed the Startup GameSingularity HubCrowdfunding has become a multi-billion-dollar industry, funneling millions of dollars into thousands of projects. Technology in particular is one of the leading categories on popular fundraising platforms like Kickstarter an [...]

The RecorderFTC Hears From Company Leaders as Crowdfunding GrowsThe RecorderSACRAMENTO — The future of crowdfunding is one of specialization, with an ever-increasing number of firms finding niches in equity, nonprofit and even creative projects silos, industry leaders told a Federal T [...]

Crowdfunding in commercial real estateJournal Record (subscription)jdavidchapman In 1997, a British rock band funded a reunion tour through online donations from its fans. This may have been the first example of a concept now known as crowdfunding. The crowdfunding industry has quickl [...]

Crowdfund InsiderWhen It Comes to Retail Crowdfunding, SAFEty FirstCrowdfund InsiderOn September 22nd, Crowdfund Insider published a post summarizing the arguments presented in our new essay entitled “Crowdfunding and the Not-So-Safe SAFE“ (forthcoming in Virginia Law Review Online). [...]

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