At the SVCrowdfund conference on April 3, 2014, Richard Swart, PhD., gave a fascinating presentation on the growing ecosystem of crowdfunding and alternative finance.
Dr. Swart is a well known authority in the crowdfunding world. He runs the UC Berkeley’s crowdfunding research initiative and is also a partner at Crowdfund Capital Advisors Group. He spends plenty of time traveling the globe – sharing his unique perspective into the disruptive innovation of crowdfunding.
This new form of finance is growing rapidly in many parts of the world. It is fast being recognized as a “viable international market for institutional investments, allocation of capital in debt instruments, and relatively low risk equity transactions into micro-enterprises”.
Crowdfunding is creating jobs by funding small companies – many of which go on to capture additional investments – and boosting national economies. The technological efficiencies generated by crowdfunding portals reduce friction between investor and companies in need of capital.
Crowdfunding is also recognized as a proven method for product validation, customer engagement and dramatic marketing impact. Some companies do not even need the funding – they want the earned media and user engagement.
Additional bullets from the presentation:
- Evidence indicates fraud is NOT an issue & there has been NO fraud to date in equity crowdfunding
- Fraud is more difficult to create in the transparent world of investment crowdfunding
- Over 90% of groups raising more than $5000 in successful crowdfunding continue on to become viable firms
- Evidence shows that crowdfunding is more effective at selecting viable firms
- Online consumer finance is rapidly threatening banking models
- Money is flowing from the Heartland to the coasts
Crowdfunding is on the cusp of a global boom. In the countries where it is allowed to thrive the benefits will be legion.
The entire presentation is embedded below.