Stephen McDow

Home » Reflect Now: Thoughts & Feelings » Reflect Now: Equity Crowdfunding Good or Bad?

Reflect Now: Equity Crowdfunding Good or Bad?

Davis Jones' Equity Crowdfunding Eco Map

Davis Jones’ Equity Crowdfunding Eco Map

Is Equity Crowdfunding the future of small business! Or is it another idea good in theory? What is Equity Crowdfunding? Per Sarah N. Lynch’s article from Reuters:

Equity crowdfunding lets small companies raise money by pooling together tiny investments from people around the country in exchange for a potential financial return.”

“Many believe that, if structured appropriately, crowdfunding can bring great benefits to our economy,” said SEC Democratic Commissioner Luis Aguilar.

This has the potential to really create a market for grassroots consumer empowered investment, and give small businesses that do not meet the criteria for traditional funding sources a chance.

Take a moment to view the video below to learn more about Equity Crowdfunding: The Secrets of the Crowdfund Investment Revealed by Davis Jones.

Does it sound like a good idea? On balance, there are some who feel differently. According to an opinion piece entitled Why Equity Crowdfunding Is a Terrible Idea:

Equity crowdfunding proposes a fair shot for all, but as with most things in a capitalist structure, only the strong will survive. There will be adverse selection. Good entrepreneurs will not go to crowdfunding sites as they can raise capital the traditional way. Good investors are not going to crowdfund because they do not struggle to connect with good entrepreneurs. Thus, equity crowdfunding sites will be left with entrepreneurs who couldn’t raise capital and investors who couldn’t get into deals.

What do you think?

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