Since the early days of the first stock exchanges – investors, governments and businesses have looked for ways to facilitate investment, mitigate risk and accommodate diversification.
Early banks managing debts of local farmers were the first “brokers”. “Bourses” -informal gatherings of commodity traders – started the concept of exchanges which quickly blossomed around Flanders creating the first “stock” exchanges.
The Dutch India company – or Verenigde Oost-Indische Compagnie – has claimed the title of first ever company which utilized “shares” as a methodology to raise capital. This event was driven by market forces of investors in need of mitigating risk by spreading ownership in the dicey pursuit of riches generated by trade with the “East”. Thank you Holland.
Today the concept of investors seeking return and entrepreneurs seeking capital is ready for the next step in finance.Amy Cortese, author of Locavesting, was recently quoted stating, “if Americans shifted 1% of the $30 trillion they hold in long term investments to small businesses, it would amount to 10 times the venture capital invested in all of 2011.”
Crowdfunding has the potential to dynamically impact the efficient allocation of capital in aiding and growing the future of business investments for entrepreneurs worldwide.
Yes, appropriate and proper regulation is required. Transparency and proper appreciation of risk is a must. Recently there have been some prophets of doom declaring dilettantes which have stated these (Crowdfunding) entities will become the “new turbo-charged pump and dump boiler room operations of the internet age”.We wonder if the Dutch of 1600s experienced similar hyperbole. If they did they made the correct decision in ignoring these myopic declarations. At CrowdfundInsider we believe it is time to push forward with crowdfunding thoughtfully and with proper oversight. We cannot risk the alternative of allowing this opportunity to be lost by negligence or excessively deleterious regulation. The next generation of entrepreneurs is waiting.
1 L.O. Petram