This post about the future of Venture Capital and ICOs (Initial Coin Offerings) is an excerpt from the full article, found here at toptal.com. I focused on the Machine Learning and human talent aspects and how they will impact the future of the industry. Another post of interest about the future of the crowdfunding market can be found here. -Spencer
What does financing the future look like? We all know incredible advancements in technology have made new discoveries and products available to millions of people worldwide. But can those same people look to the technology of crowdfunding to help finance their dreams, and by extension, our future? Here is a sobering article on the current state of crowdfunding and what will have to be done to ensure crowdfunding can live up to expectations. -Spencer
In April 2012, then President Obama signed into law the Jump-Start Our Business Start-Ups bill, otherwise known as the JOBS act. In the midst of a recovery from the devastating after-effects of the Financial Crisis, the move was hailed as “a ‘potential game changer’ for fledgling businesses in need of financing.”
In particular, the bill unlocked the promise of equity crowdfunding, an activity which, simply put, allowed companies to raise money from any willing investors via the internet. As President Obama himself put it, by removing these restrictions, the JOBS act promised to allow “start-ups and small business […] access to a big, new pool of potential investors—namely, the American people […] For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in.”
To be clear, the process of raising money from private investors is nothing new. However, in most countries, including the US, there have historically been rules regarding such an activity that tended to exclude the average person on the street from investing in these deals. In the US for instance, in order to invest in the equity of private companies, individuals needed to be approved accredited investors, or go through regulated middlemen, both of which limited the playing field and created barriers to mass participation. The JOBS act, and the promise of equity crowdfunding, changed all that.
Nearly five years on though, equity crowdfunding continues to remain a fairly limited niche activity. Despite a few success stories, the grandiose predictions of industry-wide disruption haven’t come to fruition. In this article, we take a look at the current state of the equity crowdfunding market in the US, and assess the challenges it needs to overcome in order to live up to its promises.Read More »