Super Size Players Of Crowdfinancing

April 23, 2012 | Author: | Posted in Finance

Like Gulliver’s Travels, the combined efforts of the immature people is very powerful. It is similar to the individual crowd that makes up the crowd funding model. Having thousands and thousands of individual participants creates a very powerful mechanism for raising capital. The individual can be your neighbor next door with a little bit of extra spending money and a desire to help out somebody’s passionate project or business. These individuals aren’t necessarily interested in making money but are interested in helping somebody out. This is quite different than normal capital rate efforts. These smaller individuals that make up the crowd have some type of passionate effort on the project that is taking place. Power to the people.

Because information is so vital, the specialized researchers will help the crowd on making choices. These researchers will come from blog writers, advisors specializing in the crowd, broker-dealers with a research division, independent capital research firms, and newsletter writers. These researchers will be putting out research at a very quick pace. Considering the projects will probably be less than 45-60 days, their analysis will have to be quick and accurate. More than likely they will be very close with the company that is raising the capital or very knowledgeable of that industry and sector. Eventually these researchers will get a following and they’re following will follow each of their research reports and have great pull.

Just like the stock market a company uses an underwriter, the same will be true for the crowd funding model. There will be several underwriters that specialize in crowd underwriting. They will help out the business raise the capital fast and efficiently. The crowd funding model can be seen as a maze to new businesses that just want to grow their business. That is why the underwriter will be so important because they will have passed knowledge and experience raising capital from the crowd. These underwriters will also have a following that will help the crowd funding process faster.

The crowd funding portals will be the most important piece of the puzzle because this is the central location where the capital is being formed. The crowd funding portal will have various capital pits for the individual businesses that need capital. These portals usually have niche markets such as special industries, sectors, geographical location, and targeted investors. These crowd funding portals will be the central location where information and due diligence is moving back and forth from the project to the investor. The portal’s biggest influence will be about people that visit them. The more people that visit them the more chances the business has at raising capital. Since this is so new there really aren’t any big portals at the moment.

Peera Lavestatalks about the economic markets and p2p lending . She also vents about some of the venture capital investors debates of the day. On her years off she wrestles on the waterfront and does zen control.


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