As early as next January, the U.S. law will again (after nearly 75 years) allow individuals and small businesses to raise up to $1,000,000 a year from the general public to start new companies or expand thriving businesses. U.S. citizen/residents can invest $2,000-$100,000 a year depending on their income level, in businesses that they like or think may have a bright future.
This new law in effect allows ordinary people to be angle investors or venture capitalists. The tool that makes all this possible is called CrowdFunding. Web based platforms (websites) bring inventors and investors together. Obama’s JOBS act was made into law on April 5th and between then and Jan 5th 2013 the Securities & Exchange Commission (SEC) will be putting together the rules and regulations which guide and control CrowdFunding platforms.
Inventors and entrepreneurs publish product and financial information about their product/idea/company on these platforms and potential investors evaluate the available information and hopefully make informed investment decisions.
Will there be fraud committed by those who seek funds or platform operators? You bet! But overall this is a great opportunity for young smart visionaries with good ideas who would not otherwise have access to the conventional/traditional venture money; ie wall street and large Silicon Valley, Manhattan or Boston based venture capitalist.
Currently platforms like Kickstarter are helping entrepreneurs raise funds in form of prepaid orders for products or services. This has been a great start. Pebble Technology, a start up in Palo Alto, CA raised more than $10,000,000 for a Product Design project via 68,000 backers in a matter of a few weeks. Could this have been possible in any other way? My response is a confident no.
Kickstarter is not a full fledged Crowdfunding site; but it has helped educate the public about the potential of Crowdfunding (CF). You can find out more about Kickstarter’s model by visiting www.kickstarter.com
There are at least 100 other CF sites in operation today. A few new CF sites are in the works that will be owned and operated by Iranians. One such CF site is TechnologyCrowdFund. There cannot obviously be a working platform for this name because SEC rules are not finalized yet. But you can get a gist of what this site is about by visiting their Facebook page@ www.facebook.com/technologycrowdfund.
Between 2000-2010 there have been almost 100 (91 to be exact) highly successful hightech Iranian-American startups in the U.S. Lets hope that in the next 10 years we have thousands of successful Crowdfunded startups.