You have got to love that quote.
Salman’s quote was in commenting on Kickstarter and Pebble,
Let’s take Kickstarter and Pebble as a good example. If you went to any venture capital firm in America… If you went to Mike Moritz, or pick your favorite guy, and you said, “I want to start an e-ink-based watch company to sell to consumers.” The likelihood you would get funded is the same as the interest rate on Treasury bills. So what did Kickstarter do? It allowed people to vote, by agreeing to effectively pre-pay for a product, $10 million dollars to support a product and a company that hired a bunch of people in the U.S. Even I signed up to get the damn product. [laughs] And I’ve supported other Kickstarter projects — where I know beforehand, by the way, in contrast to many investments I’ve made, that I’ve lost my money. I don’t need to wait. [laughs] I’ve pre-lost all my money.
Salman quite obviously is recognizing the powerful effect Crowdfunding has had on start ups. This disruptive approach to financing is already changing the face of entrepreneurs within the United States as well as around the world. Even before equity participation is allowed the impact has been profound.
Professor Salman goes on to state,
But if you say, in contrast, that nobody can invest in these kinds of projects unless you’re very rich or whatever, then you will put a clamp on the amount of equity that can go into the small business and entrepreneurial side of the economy, which is the part that has failed us in recent years.
As we have highlighted in these pages previously, if Crowdfunding is overly regulated and stifled the entire economy will lose. Of course their is risk. That is inherent to any new business venture. But the innovation of crowdfunding in allocating capital to those ventures that have the most apparent probably for success will be profound.