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an exchange is held no longer for 8 years as in the 1960’s but rather for only 5 days today, where stock brokers have been replaced by online trading, and where financial advisors spend more time on how to interact with the millennial community rather than what content to react with.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

Crowdfunding deadline for community kitchen nears  The Daily TelegramADRIAN — The organizers of a community makerspace kitchen project have raised $35000 toward the $50000 goal of receiving matching funds from the ... [...]

Crowdfunding guide helps districts develop safe, effective practices  Education DiveChiefs for Change has released a new guide to help schools and districts use crowdfunding effectively, safely, and equitably, and to develop policies concerning ... [...]

Crowdfunding underway to re-purpose part of Bailey Park into dog-friendly area  WWMT-TVA crowdfunding initiative to raise a goal of $30000 is underway in Battle Creek in an effort to re-purpose a portion of Bailey Park into a new dog park, according ... [...]

Great Idea But No Capital? How To Launch A Business Through Crowdfunding  ForbesNoëlle Santos launched a viral crowdfunding campaign to open The Lit. Bar, a wine bar/bookstore in the Bronx. She shares her advice for crowdfunding a ... [...]

School Districts Are Banning Teachers From Using DonorsChoose  Education WeekAs teacher-led crowdfunding grows ever more popular, school leaders are starting to voice concerns. [...]

Insurance Giant AXA XL Launches Security Token and Crowdfunding Insurance Service  CointelegraphNews. Insurance giant AXA XL and insurance technology startup Assurely have jointly launched a new insurance product covering equity crowdfunding and ... [...]

MP to tap crowdfunding to finance campaign  The HinduN.K. Premachandran, the UDF candidate and sitting MP of Kollam, is all set to launch a crowdfunding drive to finance his election campaign.The facility to ... [...]

Currently Crowdfunding: A Smart Teapot, a Home Cheesemaker, and More  Core77.comNavigating the world of crowdfunding can be overwhelming, to put it lightly. Which projects are worth backing? Where's the filter to weed out the hundreds of ... [...]

Local businesses try crowdfunding to help expand, recover  The Register-GuardWhen Kevin Barrett fell from a ladder while constructing his distillery in Springfield, breaking six ribs, shattering his clavicle and puncturing his lung, it was his ... [...]

Healing Teddies seeks public embrace in crowdfunding campaign  The Jerusalem PostOnly weeks before her death, Ilana gave her mother a teddy bear, unaware of what this small gift would lead to. [...]

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