Here we are, ladies and gentlemen, at the biggest match in financial history to determine who will invest in crowdfunding opportunities. In one corner, we have Tickertape Investor, and in the other, Social Investor. Anything goes in this match, and who will be the predominant investor in crowdfunding opportunities are still unwritten. Place your bets, but make sure you know what each contender brings into the ring — nothing less than the financial future of crowdfunding is at stake.
This contender has the status quo and the weight and muscle that come with writing the rules of small business investment. Skilled from decades of experience, Tickertape Investor knows the game, the moves, and where and how to invest his dollars for the biggest financial reward. He can assess risk versus reward on the turn of a dime. And depending on whom he’s fighting for in the ring, he can be as aggressive as Apple or Netflix or as conservative as government bonds at two-per-cent yield. But his mindset is strictly on a targeted financial return.
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Generally speaking, Tickertape Investors:
- Invest money into businesses for financial return
- Rely on valuation as a primary decision metric
- Are sometimes focused on short term results
- Are not usually part of the business’s community or ecosystem
For Social Investor, there’s a different goal in investing. He’s in the ring to do some good and support the community, which, in turn, benefits himself, his family, his friends, and his business. More often than not, he’s investing in a business he patronizes, one where his family and friends shop. If he can be a part of keeping that business viable in his community, he has won. Financial returns are important, don’t get me wrong. No one invests in a business to lose money. But getting a 3x return on his investment in three years is not as important as helping out friends, family or neighbors.
Social Investors (generally speaking):
- Provide investment dollars and revenue (they shop there) to businesses they invest in
- Are concerned about the long term viability and importance of a business in its local community
- Have known the business owners for years, perhaps even generations
- Become raving fans of the businesses they invest in because they are proud to be a part of them.
Hold on to your tickets, ladies and gentlemen! There are many rounds to go, and the sanctioning body hasn’t even weighed in with the new rules for investing in equity crowdfunding (except in Georgia and Kansas). But keep your eye on the new kid, Social Investor. He’s a crowd pleaser and he’s got some new moves that’ll be sure to change our future.