By Hector Botero
Are you here for the disruption?
Most people involved with Crowdfunding and Fintech in general are here for the disruption of traditional business models, processes and technologies. Yes, of course there are substantial value and growth opportunities at hand – and more traditional opportunities such as employment, but ultimately being a part of a disruption trend the size of what we now understand is happening is exciting. And excitement is a quality of life component more people seek today.
A November 6th article in the Wall Street Journal called the “Uberization of Money” which talks about disruption in the banking sector points to facts like at this point not many of us ever actually talk to a bank teller or visit a bank for that matter. The article talks about peer-to-peer lending and “Lending Club and Prosper, which are now already a decade old—ancient by tech standards. With less than $7 billion in loans in 2014, they are tiny in the multi-trillion-dollar lending world. Now the sector is showing explosive growth. PricewaterhouseCoopers estimates that it could be a $150 billion business by 2025.”
What grabs me is not that after a decade the industry has hit $7 billion but that in the next 10 years it will grow 20 fold and the corner bank may go the way of the drive in theater.
Investing for returns and doing good – Gate Global Impact
Impact investing is a progressive new investment philosophy whereby an investor proactively seeks to place capital in businesses that generate financial returns from organizations committed to societal, sustainable and/or environmental goals. The growth of impact investing is borne out by global trends in macro/micro socioeconomics, next-gen behavioral finance, and ubiquitous social media that continues to drive participants and awareness to this movement.
So what financial returns can investors expect from an impact investment? One of the most common questions about impact investing is what sorts of returns investors can expect. “Profit is not a dirty word, profit creates sustainability, and sustainability creates systemic change. Impact investing returns vary widely. Some investors are willing to give up part of their standard return expectations for the sake of high societal impact. Others are focusing on opportunities to earn market returns, recognizing that not only does solving societal problems create the potential for market returns, the very act of solving the problem may reduce the risk of the investment. Investors can earn high returns while creating impact.” Said Vincent Molinari, founder of Gate Global Impact.
Visit Gate Global Impact here…
KoreConX launches crowdfunding process platform
Single point of entry to apply to different crowdfunding portals. Start here: create and organize your archive of materials; Use to launch: use archive to apply to various portals (platforms); Manage here: ongoing management of documents and forms. Comprising partners such as iDisclose, EarlyIQ, AlgoValue and CrowdCheck KoreConX offers a free entry level to understanding and managing the documentation process for successful crowdfunding. A simplified application that provides flexibility and security to facilitate a core component of fundraising.
Cadia Yachts – is this the Tesla of yachting?
Billed as Green. Electric. Silent. Fast. The team at Cadia Start up Exchange, an innovative crowdfunding platform that also offers a secondary market for trading privately held securities has launched their very own crowdfunding campaign to launch Cadia Yachts and bring to the world the first 100% electric yacht. Cadia 34E is going to be a hard top luxury electric yacht with a length of 10.2m and maximum speed of 30kn (55,5km/h). Range at full load is calculated to be up to 3h (133km) with cruising speed 24kn (44,4km/h). The boat is extremely light (3630kg) and will be manufactured using the most innovative technologies and environmentally friendly materials.
You can see more on Cadia Yacht here…
Miami, Florida is the perfect place to introduce this beauty and we are available.
The a-ha moment of the week for me should not have been a surprise at all, at the end of the day I have been waiting for the SEC to move on Title III as anxiously as the next guy – waiting, investing, preparing and hoping and praying that some dark cloud from hell did not rain on our parade. Well, it did not rain and now momentum and excitement are building and as I said last week, I am now more confident than ever that the three year wait was well worth it and wisely used to prepare for the future.
But I did have an a-ha moment when I read the effect on the investor market that the new regulations will have – in essence the new capital markets will now be available to an estimated 233 million investors as opposed to previously only 8.5 million accredited investors. I am not sure why the number caught me by surprise but it did.
Reading this you may think that my first reaction was overwhelming joy seeing the investor pool grow 30 times – it is but not entirely. The feeling of a sense of urgency to fully understand this phenomenon and more than that, how to capitalize on it fully settled uncomfortably in my mind. And then there is a small sense of fear, I don’t want to use the word “panic”, but let’s just say it’s in the same family, Let’s face it, 90% of the people I know, people I have worked with and done business with over years still have absolutely no idea what we are talking about! Sure, maybe all of them have heard the word crowdfunding but that is where it ends and the vision of what it is goes from network marketing schemes to Ponzi scams and worst if one can come up with something worse than that.
Fact is that while processes have been simplified, costs lowered and accessed greatly increased it is still a complex environment and success may require managed expectations and carefully planned growth. Scott Purcell, CEO of FundAmerica wrote an article in June of 2014 that caught my eye and the eyes of others, obviously since over a year later I am writing about it. The article titled Term “Equity Crowdfunding” Pisses Me Off, makes some very interesting points that speak to the complex nature of our industry. It did not lead me to throw the baby out with the bath water but it makes some very good points and as I said, it points the complex nature of investing in companies overall which unless you have been there and done that, you may have a hard time understanding even the simplest part of this process: what happens after you plunk down your money for a minority equity stake in an SME?
And if that does not create even an inkling of anxiety try this: last week I wrote about ING and their crowdfunding initiative being offered in the Benelux region (read article here…). My point was that it may not be long before other banks follow ING and launch crowdfunding services for SME clients and with US having 6 million SMEs alone, the potential mad gold rush may very well be a stampede.
This week I wrote JP Morgan Chase, Citigroup, Bank of America, Royal Bank of Canada, Wells Fargo and others asking their communications contacts for their position or comment regarding crowdfunding. JP Morgan responded that they would get back to me and none of the others answered. As a newswire, when we ask the corporate communications departments of major corporations for information or comments we usually get a reply, unless there is none. Obviously, there were not any previously issued press releases on the subject laying around which would be easily forwarded. So this is good news – just maybe we have another 12 – 18 months before the big banks that have 6 million SME bank accounts start to offer crowdfunding services and meanwhile the industry can deal with one stampede at a time.