Candace Klein had a promising entrepreneurial career when the state of Ohio accused her of securities fraud and threatened to shut her down. The founder of Bad Girl Ventures and the CEO of crowdfunding platform SoMoLend had been anything but a bad girl. With Bad Girl Ventures, Klein created opportunities for female entrepreneurs by giving them access to capital and through SoMoLend she put Cincinnati on the national crowdfunding stage. She was also a champion for crowdfunding and an advocate in the industry’s efforts in implementing the Jumpstart Our Business Startups Act (JOBS). So what did Ohio do to her?
In March 2013, Los Angeles residents looked up and saw the words, “How do I Land?” written in the sky. That was the handiwork of Kurt Braunholer, who raised $6,820 of his $4,000 Kickstarter goal to hire someone to fly a plane and “write stupid things with clouds in the sky.” Likely not the best way to spend almost $7,000. Then there was the notorious Potato Salad campaign that raised $55,492 of a $10 goal, and Meat Soap that raised $1905 of $1500.
American entrepreneurs are still waiting for the Securities Exchange Commission (SEC) to finalize the federal rules governing crowdfunding. These industrious members of the economy represent 99.7% of national employers and employ more than 54.9 million.
Thanks to shows like Shark Tank, the concept of publicly pairing entrepreneurs to investors is now a mainstream concept, piquing the interest of many Americans.
At one time, pitching a new business idea to a group of investors was an alternate option to traditional funding that made raising capital possible for the average entrepreneur. Today, thanks to the democratic nature of the Internet, there are more options and fewer barriers than ever before.
Equity Crowdfunding is certainly making waves in business around the globe. Here are a few examples of success stories from this year alone:
According to the National Venture Capital Association (NVCA), the venture capital (VC) market in America is shrinking, with the number of VC firms significantly decreased in recent years. The NVCA reports that VC investment and under-management are also on the decline.
When two Atlanta-based brothers needed money to fund their business – a unique, vintage oilcan electric guitar start-up – they turned to an online crowdfunding community called Kickstarter to raise an incredible $55,000. They also extended their fundraising efforts to Invest Georgia Exemption (IGE), a group of local investors who receive equity in their business.
Trailblazing the path to community-supported developments, an Atlanta-based equity crowdfunding firm is raising capital from instate residents to help their local economy by improving a neglected Atlanta neighborhood plagued by crime and poverty.
In the early 1980s, while working with his father in Israel, OurCrowd founder John Medved said his plan was to build the country.
What he did was build a global market for Israeli businesses by developing one of the world’s largest equity crowdfunding firms. And though the country has 2 million people less than the state of Georgia, and equal security hurdles to leap, the Israeli-based OurCrowd has already helped 36 portfolio company teams raise $43 million from 4000 accredited international investors.
He did this in less in than 14 months!
Earlier this year, a California-based company raised $750,000 through debt and equity crowdfunding when the owner took advantage of a provision that allowed him to campaign on Facebook, LinkedIn, Twitter and an online crowdfunding platform.
Publicizing his campaign on personal websites is a move that really bolstered his two-year old small business. But, that option isn’t available to everyone. Why not?