CROWDFUNDING –2020 VISION

By CrowdFudnBeat Media and Crowd Caucus, The 2020 Vision is the first of a research series to provide a framework for contemplating the future of the Crowdfunding industry. While still nascent in many respects, “crowdfunding” has its origins dating back nearly twenty years ago, albeit the term was not yet coined. With new business models and strategies being developed around the accessibility of the internet, IT development, self-directed investing and social media expansion, crowd platforms are launching daily. As one of the newest members to the financial services industry, it is both welcomed by availing new forms of capital access and investment, while in some ways it appears confusing, if not threatening, to the analog financial services establishment, which has benefited for decades by a highly regulated, legislated, and anachronistic environ. Yet, with the explosive growth of crowdfunding, this is still 2014, and in every incipient industry, we must posit what the future may hold – in four, five or six years? Say, in 2020?

We find ourselves in a period of distributed and high speed finance, driven by information technology, where the average share of stock on an exchange is held no longer for 8 years as in the 1960’s but rather for only 5 days today, where stock brokers have been replaced by online trading, and where financial advisors spend more time on how to interact with the millennial community rather than what content to react with. The business of finance, and its subset, investing, is information intensive, and the ability to communicate, educate, inform, and transact elegantly and efficiently begs to change convention. New avenues and forms of capital for privately held small businesses and their entrepreneurs are both welcomed and needed. And while the multi-trillion dollar financial services industry continues its consolidation in many ways, whether the banks or the venture capital community, we ask whether the bigger are doing better or becoming less nimble and blinded by opportunistic new non-bank entrants, be it in payments, processing, trading or crowdfunding.

It is difficult to forecast the future, realizing many paths can be taken, yet we assert it is critical for the “constituents of the crowd” to consider trends, possible game-changers, and a sense of what the future crowd milieu may envisage. There are many actors and non-actors in the space, which can influence the rise or fall, acceleration or extinguishment of the crowdfunding model. verzealous regulators, big investment wins or even bigger losses: each can propel a different direction. We may question the role of technology vs. human instinct in investment behavior, or what truly generates “value” for “crowdfunding players”, whether it be broadening economic value, creating innate enterprise value or sponsoring social value. There are many investors and supporters raising the crowdfunding banner, waving it vivaciously now, but page forward a few years, and what might be the evolution of what we and others do today? Will we witness superb success stories or a redux of the dot.bomb era? What really will have been accomplished, what obstacles might be faced, and, in the spirit of the JOBS Act, will a greater good be achieved? And as with social media’s effect on the geopolitical landscape, might we even expect a shift in economic influence and growth into areas where capital can now find an exciting proposition, given the ubiquity of the web, which may not be in our own backyard? Our goal is to build a collaborative representation of “possible futures”, garnering perspectives from industry participants and thought leaders, financial services executives, regulatory and legislative members, academia, and users, be they investors or issuers. We want to assess what is disruptive and who’s being disrupted in the process, and whether such disruption will be both positive and sustainable, or something that will or should be pivoted away from.  In many ways, we may have a narrative of David v. Goliath, possibly economic diffusion or something much different. In the end, we hope to stimulate thought and dialogue about how new rules can be applied to an old practice (finance), and what this may look like six years from now. So it’s time for applying 2020 vision to the crowdfinance space and consider possible trajectories, futures and implications.

Some Themes to be Covered

  • Platforms: Business and Revenue Models – Which will work longer term?
  • How do they create enterprise value?
  • Content vs. Distribution
  • Vertical v. Horizontal Strategies
  •  Differentiation
  •  What defines success? Harvesting? Intermediating?
  •  Financial Services Industry
  •  Embrace, Replace, or Just Brace Yourself– Old Guard meets New World
  • Competition or Co-opetition
  • Banks, VCs, Funds
  • Exchanges vs. Platforms
  •  Shadow and narrow banking
  •  Who’s the Client – Investor or Issuer? Both? Or Neither?
  •  Demographic Shift of the Investor
  • Empowerment
  •  The Demise of the Accredited Definition
  •  Issuer Risk vs. Opportunity
  • Is this an asset class?
  • Should funding take place?
  • Collective Crowd Consciousness vs. “Smart” Money VCs
  •  Democratization, Localization or Globalization
  • Role of the US in the Industry’s development
  •  New ’33 & ’34 Acts?
  •  Governance, best practices, benign neglect
  •  Regulation, Legislation and Liabilities
  • Local, National, International
  •  Potential Outcomes, Realities, and Black Swans
  •  Crack Down
  •  Accelerated Consolidation
  •  Global Venture Investing, Capital Formation and the Beauty of
  • Disintermediation
  •  Shifted Economic Growth Patterns
  •  Acquiescence to the Big Boys
  • Project Tenor: Four months
  • Project Cost: $100,000 (incl. of research partners, writers, rich media, and expenses)
  • Monetization: Sponsorship Funding ($10k-$25K)
  • Platform Participation ($2.5k)
  • Paid Downloads (estimate at $1000)

HEADLINE NEWS

Proof of use: A new crowdfunding threshold for passionate users  TechCrunchRight now, most participants in U.S. private placements must be “accredited” investors, meaning $200,000 annual income over multiple years or $1 million in net ... [...]

Why crowdfunding is here to stay  Independent OnlineWe explore the opportunities, challenges, successes and occasional failures of the phenomenon called crowdfunding. [...]

Be cautious with crowdfunding  The Week MagazineHere are three of the week's top pieces of financial advice, gathered from around the web: Be cautious with crowdfunding. It's wise to be careful when donating ... [...]

Ask SCORE: A crash course in crowdfunding | Business  The Union LeaderQuestion: I have been trying for the last six months, without success, to acquire funding to complete development and marketing of my idea for a new roofing ... [...]

Soup kitchen founder's crowdfunding making a difference | Cape Times  Independent OnlineCape Town – Soup kitchen founder Danny Diliberto has exceeded his goal to raise R48 000 for Ladles of Love, his non-profit soup kitchen that serves meals to ... [...]

Mulberry Fire Department Turns To Crowdfunding For New Fire Engine  KFSM 5NewsonlineMulberry (KFSM) - On November 6th, 2018, the volunteer fire department that services mulberry and protection district two lost their rural pumper engine. Now, to ... [...]

Crowdfunding crisis: $2,060 for a dog, but $0 for many domestic-violence victims  Chicago Sun-TimesPeople in online fundraisers seem more willing to give when a person has been killed in a domestic-violence incident than when they've been injured. [...]

Do liberals love crowdfunding? ‘Time’s Up’ and ‘March for Our Lives’ make GoFundMe’s Top 5 for 2018  MarketWatchMany people using the popular crowdfunding platform during the year were donating for the first time. [...]

OrCam launches crowdfunding campaign for unique wearable AI device  The Jerusalem Post - Israel NewsOrCam Technologies, a Jerusalem-based start-up known for developing advanced technology to help the visually impaired, launched a Kickstarter campaign. [...]

Vampire romantic comedy seeks crowdfunding  NewsbookA new production of the feel-good comedy The Acrobat by Agnes Moon is soon to be staged by Unifaun Theatre Productions, with the help of a ... [...]

CFB Finance

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Press Release

Fintech World Beat

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