Discussion

Please leave a comment and tell us what you think.

  • Is crowdfunding a good way to finance a technology venture?
  • Have you been involved in a crowdfunding project? What worked? What went wrong?
  • Should regulators make it easier for businesses to raise finance through crowdfunding?

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9 comments

  1. Rebecca says:

    It seems a natural fit for a social software start-up to open itself up to a funding network like this. The approach could open up opportunities for earlier stage companies too, to crowdsource angel funding in much smaller amounts to really make the most of friends and family networks. It will be interesting to see how investors and companies funded by crowdsourcing develop communication channels that satisfy both their needs.

  2. Yes, good idea, we were also thinking about approaching some of our 30,000+ active members (on http://www.viewmy.tv) for funding opp. Less than 1m funding is difficult to get and I’m sure if there was a good vehicle to coordinate this many companies could benefit. Viewmy.tv create social media tech and are interested in this space.

  3. Charles Armstrong says:

    @peter how far along are you planning the idea for viewmy.tv? media ventures seem to be particularly well suited for crowdfunding where the audience provides an pre-aligned investor base.

  4. Jon Stoddard says:

    Who do I talk to to apply for CrowdFunding for my company?

  5. Hi Charles,

    Congraluations on getting this model off the ground and making it a huge sucess. In light of restricted capital for early stage ventures at present, there is a real need for a funding mechanism like this. It makes perfect sense when you have a viable business (strong potential, a clear plan and have demonstrated a number of achievements already) and there are many small time investors who have an interest in backing a business like yours.
    I always suspected that this mechanism, however sensible, would be very difficult to pass via the regulatory authorities. Was it difficult to create a structure to pass by the FSA’s IPO rules? In other words, did it take a lot of legal time and therefore expense? Would you be willing to share the lessons you learned with other entrepreneurs?
    Many thanks.

  6. Charles Armstrong says:

    @rachel thanks for your comment. the biggest hurdles were the fsa restrictions concerning how private companies can promote investments, which are designed to protect consumers from fraudulent schemes. it did take a lot of legal time and expense. we’ll be publishing a “how to” guide in the coming weeks which covers everything we learned about operating a crowdfunding process within the fsa regulations. hopefully this will be useful to other entrepreneurs wanting to take a similar route.

  7. Michele Clement says:

    Hi Charles,

    Did you finally publish your “How to” guide and did you complete your three runs of financement? I just transfered your site to my legal consellor for his advice. I am Canadian from Montreal and here, the rules are even more restrictive than what you are describing.

    I have an hi-tech company in the field of sustainable environment. I will be manufacturing my own innovation, a technological system for industrial and institutional market. I have been left with “Love Money” as funding ressources. It took me seven years, five thousand dollars at the time, to reach the market. And I have been lucky, I am a very beloved woman. The clients are identify but, for the moment, I am preparing my patent applications (3).

    Private Issuers like you and me have no legal vehicule, besides friends and family, to attract the savings of small investors, as well as middle class citizens don’t have neither any vehicule to invest their savings in an innovative private company.

    Laws and regulations have been drafted to deserve and/or protect the interests of public companies and big investors. It doesn’t meet the needs and the business culture of SMBs nor of small investors.

    Crowdfunding is certainly a userfriendly approach much in harmony with the culture of SMBs and Private Issuers. I just wonder if Regulation Agencies are not going to qualify those operations as publicity, which is prohibited for Private Issuers, or as an appeal to public investors.

    Maybe it’s time for us to educate the Public to all the restrictions enforced on Private Issuers. Maybe the citizens can help to create a more realistic, a more human legal environment for financing our projects and, for them, for building assets compatible with their financal capacity. Maybe Private Issuers and citizens can join their forces to get a win-win situation where they will be able to invest userfriendly and we will be able to fund our entreprise userfriendly also.

    Around me, people were skeptic. They could not beleive that if my product was so good, there was no way to finance its development through regular banking institutions. No, definitely no, Banks are not financing R&D or product development or large scale demonstration or marketing, unless you deposit warranties for more than 100% of the loan.

    I wish I will be allowed to go for this business model of a kind, Crowdfunding. In the meantime, if you have any copy left of your Guide, please forward it to me. I thank you very much in advance and I wish you the best.

  8. Charles, Looks like a great way to do funding for the business; I think I’ll look at doing the same as we now sit very neatly in that gap that you referred to in your presentation! James

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