SAN FRANCISCO, CA, (MARKETWIRE via COMTEX) — Crowdfunding — the social web strategies that entrepreneurial individuals and companies use to attract large pools of small investors — is driving innovation in areas ranging from high-tech to entertainment. Now, the mainstream venture capital industry is taking notice. A new Program for Innovation in Entrepreneurial and Social Finance, launched today at the College of Engineering at the University of California, Berkeley, will help to explain this new phenomenon and identify best practices in micro-, mobile- and early-stage entrepreneurial finance.
S. Shankar Sastry, dean of engineering at Berkeley, announced the initiative during the annual UC Berkeley Global Technology Leaders conference on campus held Nov. 13, 2012.
“We can bring our strengths in research and our deep interest in technology innovation to the questions raised by crowdfunding and related breakthroughs in entrepreneurial finance,” said Sastry. “The launch of this new program marks a major step in Berkeley’s continuing efforts to strengthen the entire innovation ecosystem.”
This program, which will be led by the College of Engineering’s Fung Institute for Engineering Leadership, has a mission to establish the world’s leading academic and applied research, teaching and policy regarding innovations in how entrepreneurs and small to medium sized businesses are funded. The program will initially focus on the most recent innovation in early stage finance, crowdfund investing.
“Crowdfund investing could be a game-changer — if it is done right. Our research goal here at the Fung Institute will be to provide rigorous and impartial critique of the phenomenon — to describe what’s happening and assess the impact of the innovation, on all stakeholders,” said Professor Lee Fleming, faculty director of the Fung Institute and academic director of this new program. “Our teaching goal will be to help students, both here at Berkeley and throughout the world, to understand the impact of crowdfunding on entrepreneurship and investment. Our policy goal will be to identify problems as they arise, offer analysis and lead the discussion about how to fix those problems.”
Crowdfund investing became federal law in April 2012 with the passage of the JOBS Act. While new regulations for crowdfund investing are expected from the Securities and Exchange Commission (SEC) in early 2013, the new industry already has over 80 crowdfund investing Internet funding platforms being developed to apply for SEC approval.
Jason Best and Sherwood Neiss are co-founders of the new Berkeley program and will serve on the leadership team. Jason Best is a co-founder and principal of Crowdfund Capital Advisors (CCA) and currently Entrepreneur-in-Residence at the Center for Entrepreneurship and Technology in the Fung Institute. Sherwood Neiss is also a co-founder and principal at CCA. Both Neiss and Best created the Startup Exemption framework that was utilized in the crowdfund investing legislation. Both are also founders of the Crowdfunding Professional Association www.crowdfundingprofessional.org and Crowdfunding Regulatory Intermediary Advocates www.cfira.org , with whom this new program will collaborate. They are recognized globally for their expertise and experience in crowdfund investing policy initiatives.
“As both an entrepreneur and investor, I understand the symbiosis required between the two in order to nurture thriving entrepreneurial and innovative ecosystems. UC Berkeley has a tradition of being an advocate for innovation and a reputation for rigorous academic research. For those reasons I’m excited to have been appointed as Entrepreneur-in-Residence for Berkeley’s Center for Entrepreneurship and Technology, and Sherwood and I are both honored to be co-founders of the program,” said Jason Best of Crowdfund Capital Advisors.
Because of the profound impact that increased access to investment capital means to the success of entrepreneurs and small business — and the impact those small businesses and entrepreneurs have in job creation in the U.S.– crowdfund investing received bipartisan support within both the House and the Senate.
Representative Patrick McHenry (R-North Carolina), who was the champion for crowdfund investing in the U.S. House of Representatives, remarked, “I am proud to have authored crowdfunding legislation that passed the U.S. House with over 400 votes, demonstrating bipartisan support for this innovative means to connect everyday investors to U.S. small businesses and entrepreneurs. I look forward to the launch of crowdfund investing in the U.S., serving as a viable option of capital for both Main Street businesses and entrepreneurs who seek to start or expand their businesses. I believe that UC Berkeley’s renowned academic leadership can only strengthen crowdfunding as it spreads throughout the world.”
Senator Jeff Merkley (D-Oregon), who led the fight for Crowdfund investing in the Senate, stated, “Crowdfunding offers exciting new opportunities to bridge the funding gap between idea and marketplace. I’m excited to see UC Berkeley lending its support to the development of global best practices for crowdfunding that advance the needs of both investors and businesses. Jason and Sherwood worked closely with my office during the drafting of the legislative framework for crowdfunding. Their expertise, combined with UC Berkeley’s academic excellence and commitment to social responsibility, promises to be a powerful positive force for the development of crowdfunding into a financing and investing tool that will withstand the tests of time.”
The excitement for crowdfunding is emerging in a number of countries. Governments are considering it as one tactic to address their nations’ most pressing socioeconomic challenges. The United Kingdom has had a form of legal crowdfund investing for two years and Australia has had legalized crowdfunding for seven years, while the Italian parliament passed a decree legalizing crowdfunding in October 2012. The U.S. State Department, the World Bank, Inter American Development Bank, angel investor groups, incubators and investors in Latin American, European, Middle Eastern and African countries are exploring crowdfund investing — and are seeking best practices and academic research on the topic.
“Berkeley’s new Program for Innovation in Entrepreneurial and Social Finance offers the potential to scale this interest in crowdfunding beyond the technology sector,” said Fleming. “We will be taking up unanswered questions about IP protection, investor risk, privacy, regulation and more. Our aim is nothing less than to be a global center for the study of early-stage entrepreneurial finance and its impact on innovation.”
Research and information on crowdfund investing can currently be found by visiting the Resources page at Crowdfund Capital Advisors.
About UC Berkeley’s College of Engineering UC Berkeley’s College of Engineering is recognized globally for its research and educational excellence, consistently ranking among the top three engineering colleges in the United States. The college’s 4,600 students gain leadership skills through experiential learning, research internships and study abroad. A full-time faculty of more than 200 professors advance discovery and innovation in fields ranging from energy engineering and nanomaterials to synthetic biology. The college’s Fung Institute for Engineering Leadership offers a complete range of programs for engineers and scientists seeking professional and executive careers.
About Crowdfund Capital Advisors Crowdfund Capital Advisors (CCA) is the world’s only organization capable of delivering superior strategic insights to government agencies, institutions, and multinational enterprises that seek to understand and benefit from crowdfund investing (CFI) technologies. Leveraging expertise and experience from leading the Startup Exemption crowdfund investing policy framework in the US and from advancing CFI policy initiatives at the international, national, and state levels, the CCA team is able to help clients formulate and execute agendas related to entrepreneurship, the roll out of clean and green technologies, and other development issues. CCA realizes the social web has changed the way citizens, investors, businesses, and governments organize and communicate, and is passionate about leveraging this opportunity and contributing to commercial and socioeconomic development through ongoing work with foreign and domestic governments, SEC, FINRA, Crowdfunding platforms and industry leaders. CCA founders Jason Best and Sherwood Neiss literally wrote the book on Crowdfund investing — “Crowdfund Investing for Dummies.” For more information visit www.crowdfundcapitaladvisors.com .