What with the dizzying pace of change in the alternative finance world, it seems like decades ago, but just a couple of years in December 2013, when I launched BA to an unsuspecting world I had a couple of everything you might call 'heroes' - namely the founders of Crowdcube and Seedrs. All things considered, these guys have been largely accountable for triggering the alternative finance revolution that's still under way today. They laid not just the foundations but additionally the footings for an amazing industry that's changing the lives of entrepreneurs throughout the UK by enabling them to realise their business visions.
To say I have the most respect for those guys would be an understatement. They're more or less the origin of my boundless enthusiasm for anything and everything regarding equity crowdfunding! There's always a 'but' at the conclusion of a word like that - and here it comes!
Lately, when I consider the way they're running their businesses I can't help feeling a hint of disappointment... I've started getting the sensation the revolutionaries have swapped their red berets and combat fatigues for red braces and pin-striped suits. In place of blazing the trail for our most imaginative entrepreneurs by giving a ground-breaking option to the rigid mindset of the financial establishment they be seemingly slowly merging in to the establishment! I say this as it would seem if you ask me that they're now turning down more businesses than previously, they are not at as open or collaborative while they used to be and are cherry picking what they deem to be the most effective company investments.
Just to be clear - it's not that I blame them. They would like to protect their business and It's obvious how this happens. It's not just worries of having things wrong; worries of failure, it's also worries of outside pressure, reprisals from the press and remaining legally compliant, especially with recent events such as the collapse of Rebus which was funded on Crowdcube last year.
For me this process takes most of the romance and exhilaration out of what we're all trying to do - worries of reprisals, lack of openness and sharing goes against everything I thought equity crowdfunding stood for. Worst of, it puts the ability to purchase exciting new ideas in the hands of the 'In crowd' and limits the contact with retail investors (the man in the street) from those opportunities.
Simply speaking, I believe this is stifling the development of equity crowdfunding and I believe they should attack it at once, rate the firms they are funding on both investment and altruism. Don't be frightened of backing the incorrect horse; it happens. Open your doors to aggregators that provide opinions and ratings, let the crowd become a crowd don't crush it.
Needless to say, it's no unfamiliar scenario, as companies make the tough transition from fired-up start-ups to corporate entities with outside powers holding the reins and the purse strings. However the truly great innovators have always understood that you sacrifice collaboration at your peril. When Apple, as an example, opened its doors to app developers through the App Store their business changed overnight... When Google created its ad display network it's revenues soared exponentially...
And anyway, or even collaboration, what's Crowdfunding about? Equity Crowdfunding is about creating a truly free market, an unbiased place where people trade and where ratings and feedback are made to companies, and Crowdfunding sites alike. To help keep the flame of inspiration burning I believe the whole community must have the ability to communicate and share ideas with total freedom. In my view which means every business involved must embrace openness wholeheartedly; must collaborate enthusiastically; must welcome collaborators and aggregators of all sorts and must open their books and let everyone see their failures as well as their successes. That might sound daunting but a feeling of community is essential here if we are to create a sustainable liquid market and our regulator needs to support us not stifle the growth due to fear of failure.
It would be fantastic to have the ability to offer sensible advice online and a needs to advertise the truth that this is not investment in traditional terms, the chances of having rich are pretty slim (not impossible I may add!) but it's fun, it's tax efficient and you're helping individuals to fulfill their dreams. If you purchase shares with this train of thought the industry's reputation won't be afflicted with failure Wefunder. The initial idea was about spreading risk, concerning the masses investing small amounts to produce a big pot. There are an incredible number of SMEs that are looking for investment and the major crowdfunders are touching a matter of mere hundreds. Industry leaders have to avoid harping on about investment as the phrase could insinuate you will receive a return.
Equity Crowdfunding ought to be marketed with increased altruistic values. Yes a tiny percentage of the companies will make it and they will possibly allow it to be big, but almost all I'm sorry to say will fail. This does not allow it to be bad, it makes jobs, gives great ideas the opportunity, typically is an excellent tax write off with SEIS/EIS and in the event that you spread your risk and invest in plenty of companies one could be the following Google. In general you should feel good about your investment you have helped someone get one step closer for their dream and in doing so you might fulfill yours by "possibly" choosing that 1 company that works out to be the following Google.