Crowdfunding’s Evolving: The Next Big ‘Profitable’ Thing

NEW YORK (TheStreet) — It seems like ages ago that nascent start-ups like Facebook (FB_) and LinkedIn (LNKD_) were reinventing how billions of people around the globe would stay both socially and professionally connected.

Fast forward to today and we’re witnessing the progressive unfolding of one of the most democratic ways for individuals and start-ups to fund their ideas and enterprises. This is a revolutionary movement with remarkable possibilities.

It’s called “crowdfunding” and it now includes a company that has taken the concept to a new level. GATE Impact Investing is reaching out to socially conscious investors who want to participate in the financial success of companies that benefit humanity and the well-being of the world around us.

I spoke with GATE CEO Vince Molinari, before his two-day summit at the United Nations in New York (more on that later), and learned that this is no typical crowdfunding venture. GATE has created both a system and a trading platform for “investors who want their investments to make a positive difference” as the CEO described it.

Molinari says GATE Global Impact “is an impact-investing focused, electronic, regulatory-compliant marketplace that provides market infrastructure and related services for the emerging impact-investment industry.” It’s all about making a positive financial “impact” in the world’s many markets.

This new industry, he says, involves “public and private investments with a sustainable social and/or environmental component that also may generate a healthy rate of financial return. All securities are offered through GATE US LLC,” a New York-based broker dealer.

Having cut his teeth in the world of financial services and capital formation, Vince Molinari and his partners wanted to create a technology-based trading platform, that as he described it, “enables access to new funding sources from across society and enterprises that offer innovative solutions to global challenges, will be able to connect capital to social impact and environment-related projects.”

Molinari and GATE’s approach to raising funds is “based on a new ecosystem and financial integrity. I asked him what he meant by “financial integrity.”

Crowdfunding the United Nations Way

Integrity and transparency are part of the reason why CEO Molinari was able to form a collaborative partnership with the United Nations’ Global Compact to feature select projects from the newly launched Social Enterprise Action Hub on its own Gateway Platform.
In a press release dated Thursday, we learned that the partnership between the UN Global Compact and GATE is “to be officially launched following the UN Global Compact Leaders Summit,” which concludes Friday.

CEO Molinari explains, “The ability to integrate standards and metrics through the Gateway Platform will greatly increase cost efficiency and the enhanced visibility will create education and awareness of this emerging asset class. The objective of the partnership between GATE and Global Compact is to drive capital to those projects that need it most.”

“With this collaboration, we are pleased to embark on a new, high-tech approach to development-project financing that is at the core of how modern financial capital will be delivered,” said Molinari.

“Together, the UN Global Compact’s Social Enterprise Action Hub and GATE Global Impact’s Gateway Platform will enable funding sources to find the global projects that are in need of capital and, for the first time, execute transactions on social enterprise. This represents a global paradigm shift in development economics” he went on to explain.

Molinari said in our interview, the UN Global Compact provides a framework for businesses to align their strategies and operations with the universally accepted principles in the areas of human rights, labor, environment and anti-corruption.

This launch is providing an unparalleled online platform for businesses to connect with potential partners to scale up projects on key global issues. It will provide not only a new trading platform but also greater connectivity to potential investors in order to increase exposure, resulting in accelerated and broader funding of worthwhile enterprises.

The Gateway Platform is a robust, end-to-end solution that supports evolving financial regulatory frameworks and provides information and data levels to facilitate strategic decision-making, regarding capital deployment.

“We call this ‘actionable knowledge’ for buyers and sellers of Impact Investments — investments that have the ability to generate a measurable social and/or environmental benefit alongside a potential for financial return,” Molinari added.

“A key advantage of the Gateway Platform lies in its technology suite, which is able to provide investors and project owners with the information and metrics they need to transact, settle and clear assets, while delivering exceptionally high standards of market transparency and security. All securities are offered through GATE US, a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).”

This not only adds credence to the crowdfunding process, but it allows investors to both invest in good causes and experience the possibility of a positive return on their investment. It brings a new layer of meaning to that famous financial metric “Return on Investment,” or ROI.

In the weeks and months ahead, I intend to explore this promising new genre GATE is pioneering. Being an advocate for accountability and the velocity of money, I envision the birth of a new asset class that allows investors to invest in “securities” that benefit their consciences and their wallets.

The UN Global Compact and GATE are highlighting their new partnership at the UN Global Compact Leadership Summit: Architects of a Better World” into Friday. Click here to read the press release and learn more of the exciting details.

By the way, GATE has worked with publicly traded industry leaders such as Dow 30 company Microsoft (MSFT_) and one of the mavens of the insurance and financial industries Prudential Financial (PRU_), which have been supportive of GATE’s mission and uniqueness.

This may suggest that someday GATE Impact Investing may succeed in its mission to the point that it may become an investment security, just like the big social networking companies are today. Time will tell. In the meantime, I’ll be investigating the potential.
——————
At the time of publication Courtenay was long MSFT.
This article is commentary by an independent contributor, separate from TheStreet’s regular news coverage.
Marc Courtenay is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor of www.ChecktheMarkets.com.
Courtenay holds a Master’s of Science degree in Psychology from California Polytechnic State University, and is a former senior vice-president of Investments for two major brokerage firms. He’s been a fiercely independent investment “investigator” and a consulting contributor to the investment publishing world for over 30 years. In addition to his role as an investment publisher and analyst, he serves as a marketing consultant to the investment media industries.

In his role as a financial editor, he specializes in unique investment strategies, overlooked stock investments, energy and resource companies, precious metals, emerging growth companies, the prudent use of option strategies,real estate related opportunities,wealth preservation, money-saving offers, risk management, tax issues, as well as “the psychology of investing”. Because of his training and background in Clinical Counseling and Psychology, he enjoys writing about investor behavior, the ¿herd mentality, how to turn investment mistakes into investment breakthroughs and the stock market’s behavioral trends and patterns.

Source: The Street – BY Marc Courtenay 09/19/13
Link: http://www.thestreet.com/story/12043123/1/crowdfundings-evolving-the-next-big-profitable-thing.html

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