On Friday, October 30th , the day the SEC ends a three year wait and adopts Title III of the Jobs ACT allowing non-accredit investors access to startup and crowdfunding capital markets among other earth moving announcements, without much fanfare and as part of its October newsletter Seedrs Limited announced a partnership with ING. In the newsletter Seedrs announces that ING will offer clients access to alternative finance options using crowdfunding. The initiative is billed as a Benelux region specific offering at this time but appears to me to be more of a test pilot than anything else.
A quick look at the ING web page on the project tells the story – ING is making this part and parcel of business services offered to corporate clients. It looks and feels mainstream and the page clearly walks prospects through the paces step by step. It includes a bullet point description tab and a much more detailed tab that starts with “What is Crowdfunding”.
So where is the game change? Banks have unique access to corporate clients and when it comes to startups and small and medium size businesses that are below the bar for investment banks and other capital markets institutions and investors, banks are the only ones that have access. There are 14,000 publicly listed companies in the United States and 6 million SMEs – investment banks, private equity, venture capital and angel investors only have access to small portion of these – on the other hand all 6 million SMEs have bank accounts.
The real question is that now that ING has added crowdfunding as part of business services offered SMEs seeking capital how long will it be before J. P. Morgan Chase, Bank of America, Wells Fargo, Citigroup, HSBC, Barclays, BNP Paribas, Deutsche Bank, Banco Santander and Royal Bank of Canada among others jump in. The question has changed from whether banks would adopt crowdfunding in one way or another and if crowdfunding would go mainstream to when. In my opinion it is now just a matter of time – after the latest SEC ruling we are faced with a mandatory waiting period and then it’s off to the races.
Access the Seedrs blog on the story here…
Access the ING web page here…