On the eve of Global Crowdfunding Day, many of the industries leading voices gathered for the 2nd Annual Silicon Valley Crowdfunding Expo and Conference, held at the Sheraton Palo Alto in California on April 3-4.
Founded and organized by longtime entrepreneur and publisher of Crowdfundbeat, Sydney Armani, the event featured panel discussions by leading Silicon Valley VC’s and investors, lawyers and other trailblazers of the movement, including crowdfunding expert and UC Berkeley professor Dr. Richard Swart, legal expert on crowdfunding Doug Ellenoff, of Ellenoff Grossman and Schole, entrepreneur and Forbes contributing writer Devin Thorpe, and JOBS act expert Kendall Almerico, among others.
The conference aimed to provide participants with the opportunity to discuss the current state of the industry, learn from experts in the venture capital, business angel and crowdfunding fields, and network with potential partners.
“Companies that never had the chance to get off the ground are going to be able to prove what they can do, and that’s good for everybody,” said inventor and serial entrepreneur Howard Leonhardt, who sat on the first panel representing the “Multiple Faces of Crowdfunding.”
Panelists noted that Title IV Regulation A of the JOBS ACT is the biggest change ever in the history of securities law. The provision has to do with exempting offerings from Blue Sky Review, a process where each state in which a security if offered may do a merit review of the offer. Removing the hurdle could create a powerful catalyst for capital formation for small businesses and end up being the crowdfunding vehicle that much of the business world welcomes. “It’s an absolute game changer,” said attorney and JOBS Act expert Almerico.
Author and entrepreneur Thorpe energized the room during the second panel, bringing participants to applause on a couple of occasions. “I am appalled by the fear of crowdfunding in the marketplace,” said Thorpe. “If you are not offended every time someone says something negative about crowdfunding, be offended – because they’re saying you’re not smart enough to make wise investment decisions.
“Crowdfunding is the redemocratization of the capital structure,” Thorpe said.
Only 3% of accredited investors currently make any investment in startups. “Our funding mechanisms are completely broken,” said Kevin Lawton during the panel titled “Reaching the Goal: How to Make It Happen.”
“The new way investment activity occurs is going to look like EBay to garage sales five years down the road,” predicted attorney and investor Chris Tyrell.
Also in attendance at the conference were entrepreneurs who have already benefitted – or serve to benefit – from the changes. Robert Yearsley, Co-founder and CEO of Collusion App, a cloud-based collaboration platform funded on Kickstarter, went on to secure $1 million in funding. After Yearsley rose to share his story, the room cheered him on. He said that crowdfunding on Kickstarter helped Collusion to test their idea in the marketplace.
“The highlight for me was learning about how crowdfunding is a way for the non-accredited investor to invest in business opportunities. When Facebook IPO’d, it’s market cap was $100B, and only investors on the secondary market had an opportunity to invest. The general public was not able to participate in that investment opportunity. Crowdfunding changes this and that’s really exciting.”
“I’m just really excited to see how crowdfunding equalizes the business playing field,” added Kellogg. “I know that we are just at the beginning of discovering all of the amazing things the crowdfunding is capable of doing and I’m excited to be a part of the journey.”“Silicon Valley Meets Crowdfunders will be continuing in 2015 and will be even bigger with Title III anticipated coming into place this year ” says Conference Founder Sydney Armani
Susan Dix Lyons is social entrepreneur, journalist and founder of Clínica Verde, a global prototype of a sustainably designed health clinic for women and children living in poverty in Nicaragua. She previously won an Outstanding Achievement Award from the Society of Professional Journalists. She is a contributor to the perspective series on KQED, the San Francisco affiliate of NPR, and an adjunct professor of media and social innovation at Pacific Union College. In 2014, Susan completed the Executive Program in Social Entrepreneurship at Stanford Business School. She was also recognized as an Unsung Hero of Compassion by the 14th Dalai Lama for her work with Clinica Verde. Contact Susan if you’d like to make an impact investment or help develop a crowdfunding platform to scale a new model of preventive care for the impoverished globally.