Is crowdfunding the new way to finance?

Crowdfunding is great!

Generally, the crowd can do a lot of things with the new technological means. We are only experiencing the first signs of dawn here.

  • If insurances do everything to not have to pay in case of damage,
  • if banks do not offer loans,
  • if energy providers do not support alternative energy,
  • if politicians waste and lose money,
then the crowd will take charge themselves.

Josef Schodl, CEO of makerSQR, one of my startups in Silicon Valley, says that paying taxes to the state is "crowdfunding 1.0". I think he's right: to spend money without being able to directly influence what you support with this money is just outdated.

I think that the current crowdfunding wave in Austria is quite amusing. When Josef and I tried to explain crowdfunding some time ago in Austria they laughed at us. Now, after the dispute of the Austrian Financial Market Authority (FMA) with the entrepreneur Heini Staudinger, everybody is quite excited about it.

And now the same happens as always in Austria: everybody is discussing the subject, except those who know about it. Those who know are taken in by the political parties as nobody really wants to change anything. After the elections nobody will talk about it any longer until the next elections – or not, as Austria is a country of old age pensioners, preservers and consumers of media uniformity.

Even Italy has progressed further: there you can crowdinvest in startups.

I have crowdinvested into kickstarter and indiegogo. For more details log in there and link with me.
Can crowdfunding crowd out venture capital?
I don't think so. Kickstarter as crowdfunding pioneer has become more of a marketing instrument than a mere financing platform.
I think the word "venture" has to be re-evaluated. There is a logic that says that laws and institutions can evaluate and assess the risk. And that the person who gives money has to be protected. However, these structures fail ever more often. And they cost an unnecessary lot of money. I expect that many legal regulations get less strict so that mature citizens can decide for themselves if and where they invest how much. I also expect that this brings tax eases. That means that the Austrian entrepreneur Heini Staudinger, who crowdfunded a loan and was sued by the Austrian Financial Market Authority (FMA) as a consequence, should be seen as an example with his business model and not as scapegoat.
There are only a few venture capital investors in Europe. Most of them do not take a risk, but try with a lot of effort – which has to be paid somehow – to get a portfolio which is based on the presumption that one of the targets starts off while the others fail. That also means that the one has to pay off. As nobody knows which startup in the portfolio this will be, and as many venture capitalists have got their fingers burnt in the past, they get slower and slower, invest ever later and introduce ever more legal tricks so that this instrument works against the startup by now. This gap is filled by super business angels who decide for themselves as it's their own money. And they organise in groups.

best regards


1 comment:

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