Monday, November 7, 2016

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.

Read More

Past OurEx Live Posts