New Report: Declaration of CrowdFunding

By John Berlau  CrowdFunding Beat News Wire November 18, 2014,

 Finance of the People, by the People, and for the People,

When John W. Anderson, a young attorney, learned of the crowdfunding project, he could not wait to tell his father about it. An acquaintance of Anderson’s, whom Anderson described to his father as “one of the best automobile mechanical experts in the U.S,” was prospecting for funds to “place on the market an automobile that is far and away ahead of anything that has yet come out.”

Competitive-Enterprise-Insititute-CEI-300x113 (1)

To bring this disruptive technology to the market, the engineer wanted to bypass financing from what Anderson called “big capital.” Instead, he sought initial funding for the car from “friends and business associates.” Anderson was long on enthusiasm but short on cash. Convinced that the engineer’s project would be the next big thing, he asked his father to front him $5,000 to invest in it.

The venture was risky, but even though “not a machine has been put on the market,” Anderson argued to his father, “orders have begun to come in every day, so there is not the slightest doubt as to the market or the demand.” Anderson called this new company “one of the very most promising and surest industrial investments that could be made.”

What John W. Anderson described to his father sounds one of these wild-eyed projects on crowdfunding platforms like Kickstarter and IndieGogo—business plans that can stir the passions of young enthusiasts like Anderson, while they leave skeptics shaking their heads. Looking at Anderson’s description, these skeptics may ask, “Just who does this auto engineer think he is? Henry Ford?”

Actually, yes! Ford was the “inventive and mechanical genius” Anderson described in a lengthy letter to his father in 1903. Anderson was right about this being a “promising industrial investment.” The $5,000 Anderson invested turned into $12.5 million when he sold his shares back to the firm’s founding family 16 years later.

Welcome to the long and proud American tradition of crowdfunding—a tradition that predates the smartphone app, the computer, and even the telephone. It has built cars, railroads, and financial institutions that exist to this day.

By 1903, the 36-year-old Ford already had an impressive resume as chief engineer for Thomas Edison’s electricity company and designer of the car that became the Cadillac, and could have attracted financing from Wall Street. But instead, Ford tapped his own physical “social network.” Among the dozen original Ford funders were a bookkeeper, a clerk, and a building contractor.

However, about 30 years after Ford raised funds from Anderson and other acquaintances to launch the company that first made the automobile affordable to the masses, Washington put up regulatory roadblocks in the way of crowdfunding that remain in place to this day.

Technology did not create crowdfunding, but it has widely broadened the size of the crowds and increased the potential of both charitable and entrepreneurial ventures to find funding. But capital raising in the age of the app is being stalled by rules that came into place before most people had a telephone in their home. As a result, crowdfunding’s potential of creating jobs and increasing income mobility is being held back as the Henry Fords of today struggle with mounds of red tape from securities laws.

John-Berlau-209x300

John Berlau.

CEI senior fellow and author of the report 

Full report

https://cei.org/sites/default/files/John%20Berlau%20-%20Declaration%20of%20Crowdfunding%20Independence.pdf

Tags: , , , ,

HEADLINE NEWS

Redding Record SearchlightCrowdfunding isn't about buying but about donatingRedding Record SearchlightImagine you're an innovator with a big idea but not a lot of cash to bring the idea to fruition. You spend some of your own money up front to design a cool demo, and then yo [...]

TechCrunchSnopes seeks crowdfunding in ownership battleTechCrunchHow many times have you heard some urban legend, chain letter or misleading bit of news repeated and immediately found a thorough, fact-based debunking on Snopes? Like every damn day for the last 20 years or so, right? S [...]

Vermont Public RadioAs Regulations Change, Interest In Equity Crowdfunding GrowsVermont Public RadioWhat's often called 'equity crowdfunding' is giving businesses, especially start-ups, a way to raise money when they can't access capital from traditional sources, l [...]

Can-Do Playground featured in national park crowdfunding campaignnews.delaware.govWILMINGTON – On the heels of its 10th anniversary celebration, the Can-Do Playground at Alapocas Run State Park has been selected to be featured on the national crowdfunding site, “Fund Your Park,” by th [...]

MashableStudy shows women are way better than men at crowdfundingMashableMale investors often don't fully understand the value of ideas women entrepreneurs pitch them. They throw capital at food delivery service after food delivery service, but ignore ideas that cater to groups t [...]

BBC NewsCrowdfunding bid to save Brighton's seafront terracesBBC NewsA crowdfunding campaign is being launched to kick-start the repair and regeneration of a section of crumbling Victorian seafront arches. The entire Grade II listed cast iron structure that forms Brighton's [...]

YouCaring Selected as Preferred Crowdfunding Platform for Major League BaseballMarkets InsiderSAN FRANCISCO, July 26, 2017 /PRNewswire/ -- YouCaring today announced that it has entered into a partnership with Major League Baseball (MLB) to bring crowdfunding to the Big Leagues. Throug [...]

Friday Hack Chat: Crowd SupplyHackadayCrowdfunding is a mixed bag, at best. On one hand, you have fantastically successful products like Pebble, Oculus, and the Kano personal computer that managed to take in money, turn out a product, and become a successful company. (If even just for [...]

State College NewsMillbrook Marsh Selected for National Crowdfunding CampaignState College NewsMillbrook Marsh Nature Center in College Township has been selected to participate in the National Recreation and Park Association's "Fund Your Park," crowdfunding campaign. C [...]

American Banker (subscription)Crowdfunding platform expands into small-business lendingAmerican Banker (subscription)CircleUp, which runs an online platform where institutional investors provide equity capital to small businesses, is expanding into lending. The San Francisco-based com [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |