A friend of mine, Mahesh, brought up an interesting topic earlier in Skype that I have been trying to wrap my head around. It is the topic of crowd investing, or allowing a group of people to fund startups.
For a quick reference, check out this article regarding a website that will buy a soccer team once it gets 50,000 members who have agreed to contribute GDP 35. That puts the grand total to 1,375,000.
Imagine the same model, only in the startup world. This podcast outlines positives and negatives of crowd investing, and whether it is a viable source of startup capital. Also, if anyone reading or listening has thoughts on the legality of such an operation, please get in touch with me. I know that there would be issues about equity split between a lot of people, but I am wondering if there is a way around it.
Podcast 18 - Crowd Investing in Startups Shownotes
- What exactly is crowd investing or crowdbuying?
- Positives and Negatives
- Positives to crowd investing>
- No longer does a startup have to wait for VC support
- Test ideas before launching
- Test products before implementation
- Infinite cash flow (as in no top end)
- Better decision making
- Pooled resources
- Collective wisdom
- Negatives to crowd investing
- Legalities
- Poor Decision Making
- More commitment in pleasing stakeholders
- Positives to crowd investing>
- Closing
I hope everyone has a safe and happy holiday weekend (if you are in the US)! Thanks for visiting :0)
