This article isn't really getting top tier investor opinions, but my assumption is that they are taking crowdfunding quite seriously. To not consider it disruptive to more formal capital would be incredibly out of character with smart money - considering they look for these very opportunities to invest. My guess is that the smart angels/VCs will try to leverage the smart platforms or create them themselves.
10 years from now, few people will seek 'traditional' financing suppliers as capital is about to get real efficient real quick. Bottom line is, this will be excellent for businesses of all shapes and sizes.
Why do you think crowdfunding is more efficient than VC? The liquidation preference might be lower but you're also not getting any advice or connections and there could be a significant investor relations time sink. If I had a choice between VC and crowdfunding I would take the VC in a second. I would look at crowdfunding if every VC passed, but that essentially makes it a sucker's market.
There should be other ways to leverage connections/network other than having to dilute ownership. That may be the most imbalanced transaction around.
I also reject that things like electronic trading for the masses are bad because the general public has bad investors. That's like saying online fraud should determine my access to ecommerce.
In many ways, platforms will help validate concepts through user participation... And the community can validate credibility. I don't just think this is a dumb money thing, I think investors will have advantages they've also never had. The bottom line is both sides of the market will get a clear benefit.
Efficient here may simply mean efficient in the economic sense. As in, there may be a lot of pent up money to invest in this stuff, but not enough deals. At least, that's what investors keep telling me. Efficient would mean that supply equals demand, and this would be a mechanism to make that happen.
edit: Also, on top of not enough deals, investors don't normally easily get access. In the past, this was for the investor's protection, of course. Theoretically, this would also solve that inefficiency. Again, in the past, this inefficiency existed for the investor's protection, not a bad thing.
Firstly, that is not what "efficient" means in the economic sense. Efficiency deals with prices (lowest costs, price = marginal cost). Yes, supply and demand affects prices. But supply and demand in of itself does not deal with efficiency.
I would also say it's a stretch to call this "pent up money." Equity crowdfunding is merely an alternative outlet for your money (the usual outlets being currency, bonds, public equities, etc.). You can think of in terms of substitute goods.
Not to mention that most people have absolutely no business investing in startups. All the best deals are going to go to the established, connected VCs and angel investors who can add value in addition to the money invested.
Hm. Advice and connections can undoubtedly be valuable, and VCs presently provide them (and/or try and/or pretend to), but does that in any way represent efficiency in the market for capital?
Crowdfunding might be more or less efficient than VC. But more competition/options in the funding space should help make the space more efficient overall.
Come on. Not about suppressing your hobby, it's about not being identified solely with it.
That's the stuff you pull out after you get married. Then it eventually ends up in a small closet about 5 years later. Ultimately, it ends up being what you have around you as you get old again. Life's funny that way.
I agree with your advice, but I don't think that's what he's saying.
I mean, a paragraph later he talks about getting an "identity mug" and earlier about wanting to get Shire wallpaper and how he listens to dwarf music. I can't tell if he's being ironic or dense or if he doesn't like Star Trek.
Yep, enough money for two attorneys oughta do it. Although i have to admit, i would love to have that title 'The Mark Cuban Chair to Eliminate Stupid Patents'.
It would be equally fascinating to look at all the incredibly well designed launches that failed miserably. This is a great reminder that if you solve a big problem or have unique content, people will crawl through sewage to get to it, but if you build an amazing empty container, it will die a slow death.
Should you be continually trying to beat your personal best or raising your trough performance level. What's a better approach in the long game of life?
I worked in finance and left when I realized that the people who were successful in finance were typically salespeople. Not necessarily by title, but more by action. It's bizarre how little the industry actually manages itself through data. We all know that a good index fund is going to beat the average hedge fund, but there is something so sexy about investing in a hedge fund. We all know that making 25% annually isn't realistic, but oh to make 25% annually and be able to tell your friends. It's all sales.
When I was 25 I swore it off. I was too young to sell versus build. But the cash was good.
Point is, time to deliver will matter... And stop doing the inconsequential many... How can anyone argue against that? Wonder when the first big reorg/cut happens, that will be when you get a true sense of where they are going.
