Crowdfunding Is Just Beginning

By Mark Roderick CrowdFunding Beat  Sr. contributing editor and crowdfunding attorney with Flaster/Greenberg PC.

For those of us who work in the Crowdfunding space, it can seem as if we’ve covered a lot of ground since April 5, 2012, the day President Obama signed the JOBS Act into law. At a conference in New York earlier this year, a panelist actually referred to Crowdfunding as a “mature” industry.

Nothing could be further from the truth. Crowdfunding is actually just beginning.

A couple weeks ago I received a promotional email from OurCrowd. Founded by Jon Medved, one of the most successful venture capitalists in the world, OurCrowd has developed into the most successful Crowdfunding portal in the world outside the real estate industry. Unlike most angel investors and venture capitalists, Jon understood that Crowdfunding is nothing more or less than the Internet disrupting the capital formation industry – his industry. Rather than resist the disruption, he built the most successful disrupter.

The email recites the impressive number of successful exits and IPOs of companies financed through OurCrowd (remember when Jon’s fellow VCs were claiming that a Crowdfunded company could never attract more financing?), and boasts that OurCrowd has signed up 15,000 investors. That’s a number many Crowdfunding portals would envy, for sure. On the other hand, it represents a market penetration of less than 0.2% among the roughly 8.5 million accredited investors in the United States, and a market penetration of less than 0.02% among the total population of U.S. investors, accredited and non-accredited. And that’s for the most successful non-real estate site in the market.

That’s not a mature industry, folks. By way of comparison to an industry that really is mature, I would say the Crowdfunding industry is about where the automotive industry was in 1912, when a few early adapters were driving these crazy machines with four wheels while their more respectable neighbors were driving proper horse-drawn carriages.

Today, everything about the automotive industry seems obvious, pre-ordained. But here are some of the things we didn’t know in 1912:

  • Whether consumers would use automobiles
  • How they would use them
  • How much they would pay for them
  • Who would make automobiles and their many parts
  • Who would distribute them
  • How automobiles would be regulated
  • Who would make money, and how
  • How automobiles would work
  • Whether the automobile market would segment
  • How it would segment
  • Who would build the automobile infrastructure
  • That a person with an orange wig would someday run for President

If you’re already in the Crowdfunding industry trying to make a living, realizing how little we know can feel disconcerting, even alarming. But try thinking of it this way: 98% of the innovation is yet come, almost all of the opportunities remain unexplored, the disruption of OurCrowd and others will be multiplied a thousand times.

One of the most influential essays of American history was Frederick Jackson Turner’s The Closing of the American Frontier, written in 1893, shortly after the Western frontier was declared closed by the U.S. census. Turner argued persuasively that the idea of a frontier had been central to the American national identify up until that time, and speculated how the national identify might change with the end of the idea.

261

Markley S. Roderick concentrates his practice on the representation of entrepreneurs and their businesses. He represents companies across a wide range of industries, including technology, real estate, and healthcare.

 

 

 

 

Tags: , , , , , , , , ,

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 [...]

CFB Finance

Marketwired

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

Press Release

CrowdFund Beat Media

Teacher turns to crowdfunding to buy greenhouse for Nunavut students upflow.co/l/bqoI pic.twitter.com/chHa3MnCfT

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 |