How important of a development for start-up companies is the JOBS Act and crowdsourcing?

rousseau

The JOBS Act that was signed into law recently has an interesting component that removes a lot of existing restrictions, and allows start-ups raise money from individual small investors in a process known as "crowdfunding". Basically, at least as far I understand it, this will allow people to go online, find and fund business ideas that they think will succeed. Venture capitalism for the people! What impact do you think crowdfunding will have on new business start-ups and small investors? Is it possible that this could start something like the Dot Com boom of the 90s?

Topic: Business
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jimlynch
Vote Up (13)

I think we'll have to wait and see what the results of this end up being. I am always skeptical when the government tries to "help business" with additional legislation. I hope I'm wrong, but I am not going to get my hopes up that it will make a difference.

We'll see.

dblacharski
Vote Up (13)

This is an amazingly disruptive and game-changing piece of legislation that will change the game for start-ups forever. Smaller start-ups have for too long been shut out of the capital market, banks aren't lending to small businesses even if the founder has good credit, and the SBA is of very little help to start-ups. For businesses looking to raise under $1M, there have been very few options. The availability of crowdfunding will indeed spur a tremendous amount of entrepreneurial activity, particularly in the tech realm. Small companies and entrepreneurs have come to understand, due to innovations like cloud computing, that a tech company can be founded with a lot less money than would have been needed during the '90s. The problem is that the venture capitalists that went so crazy in the dotcom boom, don't want to talk to you if you're in that less than a million dollar startup category, and crowdfunding now gives those smaller scale businesses a shot.

Dan Blacharski
Ugly Dog Media, Inc
http://www.crowdfundingjumpstart.com

jimlynch
Vote Up (11)

I think we'll have to wait and see what the results of this end up being. I am always skeptical when the government tries to "help business" with additional legislation. I hope I'm wrong, but I am not going to get my hopes up that it will make a difference.

We'll see.

fresko
Vote Up (8)

Well, to me, crowdsourcing is more like a brainstorming sessions to build up resouces for new businesses, only that these people get to lead the company with equal rights, into a bigger brand. That is right, chances for start-ups to become big companies under such conditions are bigger, which is a great thing.

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