Crowdfunding Industry Spotlight: Richard Swart, PhD

dr-richard-swart-225x175By Josef Holm, Editor’s Note: Each week we put a crowdfunding industry thought leader in the spotlight and ask them ten questions to inspire and educate. This week it is my pleasure to interview global crowdfunding expert Dr. Richard Swart.

 

 

Richard Swart has emerged as the global expert in developments in crowdfunding. His advice is sought by institutional investors, governments, universities, NGOs and platforms. He is the Director of Research for the University of California, Berkeley Program in Innovation in Entrepreneurial and Social Finance Program, which is dedicated to academic research on crowdfunding and alternative finance. He was the lead author on a research project for the World Bank exploring crowdfunding and funding models for innovative technology. He has lectured in Europe, the UK, Africa, the Middle East and throughout the United States. In recognition of his research in the United Kingdom, he was recently made a Fellow of the Royal Society of Arts. As Director of Research and Analysis for Crowdfund Capital Advisors (CCA) Richard guides research that informs advisory services globally in crowdfunding policy, best practices and trends in emerging alternative finance markets.

Q: How did you get into crowdfunding and what was it that attracted you to this industry?
I was leading strategy for a venture firm and we were studying how to help the 99.9% of firms we rejected. Part of our analysis included crowdfunding, and I got involved during the legislative debate on the JOBS Act and helped organize CfPA and CFIRA.

Q: What’s the most common question people ask you about your job and how do you respond?
What exactly do you do at Berkeley? Or – why does Berkeley care about crowdfunding?
I respond that our university is committed to helping launch innovation – not just in technical matters, but also in the financing of new firms. The program I direct has become the de facto world leading institution in crowdfunding research and analysis with scholars from several countries working with us on research. My role is to help connect academics to practice – through data we collect and also be serving as a bridge between pure research and policy work. The Kauffman Foundation for Entrepreneurship just supported our research efforts.

Q: Did you have a mentor or is there someone who inspires you as a leader? How did/do they impact on your career and life?
My personal mentor is Judy Robinett – she just published an amazing book entitled “How to be a Power Connector” While I have organized multiple conferences, sit on several boards, and have run networking organizations, I realized that my skills were minor league when I met Judy. Since being mentored by her the depth and level of my network has expanded to senior leaders throughout the globe.

Q: What is the biggest challenge facing crowdfunding as an industry today and what solutions would you suggest?
Our biggest problem – borrowing a phrase from my friend Ron Suber of Prosper, is “Understanding, Awareness and Education.” The vast majority of people everywhere still have no idea that crowdfunding – in its various forms, can be used to help existing SMEs, startups, NGOs, schools, and others. Much of what is written about crowdfunding is based on a very shallow understanding of its mechanics, risks and benefits. Being disruptive and new there is a huge amount that is not understood. I am lucky to have a seat watching global developments so this allows me to help organizations globally learn from the efforts of others – but there are not enough people like me who are providing education and guidance.

Q: What advice would you give someone trying to get into crowdfunding right now?
If thinking of launching a Title II or Title III platform in the US, then I would encourage them to deeply study the market and identify a unique niche. A “me too” play will fail. Any launch that is not significantly capitalized will fail. Many platforms have a health war chest from VCs and or other investors. Study innovative models – OurCrowd for Title II, RallyMe for niche specific donations, CrowdIt for its inclusion of mentoring, RocketHub for its media partnerships, Indiegogo for its expansion plans, etc. Try to understand the go to market and customer acquisition strategy of the leaders. Investor acquisition is the challenge, and this space is very crowded already.

Q: What resources and events (blogs, books, conferences, podcasts, videos, etc) would you recommend to someone looking to become a crowdfunding expert and why?
I personally read/watch CrowdfundInsider and CrowdfundBeat. For a great introduction to Crowdfunding Investing – I recommend Crowdfund Investing for Dummies. I also really like the video series/course Jason Best and Woodie Neiss have title SuccesswithCrowdfunding.com
Steve Dressner’s recent book on Crowdfund Equity Investing is very good. Dan Marom’s Crowdfunding Revolution, Version 2 – is also a great introduction. For someone just getting started I would take a close look at the CfPA conference – they bring in great speakers. Ruth Hedge’s Crowdfunding Bootcamp also gets great reviews. For finance professionals, real estate investors and people interested in advanced crowdfunding conferences, I find that the Crowdfunding Summits from Coastal Shows are great conferences. They are not entry level conferences and attract a high-quality professional audience. I find the white papers and analysis by the European Crowdfunding Network to generally be superior to what is being produced in the US. There are many other very smart folks – I am afraid to list some for fear I will forget someone, but Jonathan Sandland, Kim Wales, DJ Paul, Devin Thorpe, Jason Best, Woodie Neiss, Luan Cox, and Doug Ellenoff are some of the leaders I have respect for and appreciate their work (apologies to those I missed!).

Q: What are you doing to make sure you continue to grow and develop as an industry leader?
I am actively involved in a number of research projects and probably spend 10 hours a week speaking to leaders and researchers around the world. I am committed to providing research and analysis to the industry – so most of my efforts are focused around data, impact assessment, changes in financial models, advising funds, governments, etc. I am not the person to call for advice on best practices in running a campaign, I am the person called by funds, foundations, universities, governments and NGOs trying to understand how the global industry is evolving and where opportunities lie. I will travel 200,000 miles or more this year meeting with institutions and lecturing on crowdfunding globally.

Q: Can you tell us a little bit about how social networking and Web 2.0 have affected your organization or you personally?
I find social networking to be a noisy space. I try to identify true thought leaders and follow them. LinkedIn has been a fantastic source of contacts and relationships that have helped my research – I try to avoid Google + and FaceBook due to the lack of curation and the constantly shifting privacy policies.

Q: What do you think the crowdfunding space will look like five years from now?
People will wonder what all the fuss was about. Crowdfunding will be accepted globally as a vibrant and effective part of the early stage capital/SME Debt finance space. Creative entrepreneurs will have made significant amounts of money launching crowdfunding platforms in specific verticals such as real estate, consumer debt finance, and other innovative models. It will have changed the way that universities and philanthropies engage donors and alumni and the organizations that got out in front will enjoy significant advantage over schools and non-profits that are slow to adapt crowdfunding.

Q: What ultimate goal are you working towards?
Allowing the industry to operate transparently so that regulators and policy makers will make rational decision informed by accurate data. I truly believe that crowdfunding/alternative finance (I think of these as modern finance) will demonstrate utility for some firms, in most markets, under some conditions. By providing data and guidance, I hope to help guide policy towards allowing the market to flourish.

Source http://www.crowdfunding.biz/blogs/1/63/crowdfunding-industry-spotlight-2-richard-swart-ph-d#.U5XHLfldUTV

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