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an exchange is held no longer for 8 years as in the 1960’s but rather for only 5 days today, where stock brokers have been replaced by online trading, and where financial advisors spend more time on how to interact with the millennial community rather than what content to react with.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

GeekBIKI Robot Fish Paddles Past Crowdfunding Goal - Geek.comGeekSpring has barely sprung, but some folks are already prepping their summer essentials: bathing suit, fishing rod, portable underwater drone. Chinese company ...and more » [...]

Small business crowdfunding: Dos and Don'tsArizona Daily SunMany are the entrepreneurs who have lamented, “If only I had the money to start my enterprise.” For startup businesses experiencing difficulty — and often exasperation — trying to get financing via traditional means, cro [...]

OregonLive.comCrowdfunding efforts for Portland stabbing victims top $1 million days after attackOregonLive.comThe crowdfunding campaigns sprang up soon after news reports spread of the attack. Two are designed to help all three families with medical costs and to alleviate any financi [...]

Daily MailNick Clegg crowdfunding former Deputy PM appeals donations ...Daily MailLib Dem MP Nick Cleg is 'crowdfunding' to help bankroll the publication of thousands of party leaflets for canvassing ahead of the re-election bid in Sheffield ...and more » [...]

Roanoke TimesVirginia Tech launches its own crowdfunding site to reach new generation of donorsRoanoke TimesOne of the first four pilot projects that went live on Jump, Tech's crowdfunding website, lets users pay for as little as one local child to attend educational programming [...]

Crowdfund InsiderResearch on Risk Shows Crowdfunding Has Significant Fraud Immunity: Here's WhyCrowdfund InsiderIt may be counterintuitive but the research has been done and the results are now in – and it's as we've been saying for almost five years. Fraud in crowdfund [...]

Hall alone in vote against rape kit crowdfundingRockwall County Herald Banner“Rape kit testing is far too important to rely on an undependable funding source like crowdfunding. This is a core function of government and as such it should be funded by government. Victims deserve to know [...]

New York MagazineFacebook Rolls Out Crowdfunding to EveryoneNew York MagazineDepending on your perspective, the rise in popularity of crowdfunding is either a fantastic new way that the internet lets strangers help each other out, or emblematic of the decay of institutional safeguards [...]

Android Authority (blog)Crowdfunding project of the week: BIKI is an underwater drone that ...Android Authority (blog)Drones are fun, but they can only move through air. We know plenty of you prefer to go underwater. If so, BIKI is for you.and more » [...]

Digital TrendsCryorig's innovative PC case, the Taku, seeks crowdfunding on KickstarterDigital TrendsPC cooling specialist Cryorig has taken to Kickstarter to crowdfund its Taku ITX chassis. The product has been shown publicly before, notably at last year's Computex event, b [...]

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