Investment crowdfunding is going to disrupt and re-shape early stage capital markets. But not only for the reasons you’ve likely heard. There’s more to it.
Crowdfunding is the product of not one, but two, strands of disruptive DNA. The first we’ll call technical disruption, the Christensenian strand of disruption I suspect many are quite familiar with. The second is much different. An amorphous force much harder to define and predict, but just as real, and potentially, much more powerful. This second strand of disruptive DNA is cultural disruption. The consequence of a fundamental shift in how consumers measure worth; placing increasing weight on the meaning of an item or experience, and not just its utilitarian value. A new Consumer is evolving. And she wants more meaning in the things she buys, the things she does, and soon, the things she invests in.
Compounded, these two agents of disruption will dramatically reshape our private capital markets. Businesses and investors will be empowered by an evolved marketplace that is more open, direct, and efficient. A marketplace that provides both financial and social opportunity, fostering investor motivations across every color and hue. Incumbents will be wise to keep their eye on both of these agents, particularly the latter, as its moves are quiet, but deeply implicative.
This is a dense topic so I’m going to break it into two parts. Exploring the technical disruption in Part I, and the cultural disruption in Part II.