I read an article by Craig Newman on Crowdfunding this week. Before I read this article, I was not really familiar with the term “crowdfunding.” I assumed it was referring to fundraising efforts such as Kickstarter. However, Kickstarter doesn’t really bring in serious investors since your return is just the incentives given with specific dollar amounts. This speaks more to investment opportunities in which you get an actual financial return. Bills are apparently making their way through the House of Representatives and the Senate that will allow investors to buy small businesses’ stock online. The article speaks to the great opportunities that come from this, but also cautions readers that it could be used to defraud investors.
I see the great opportunities that could potentially come from the passage of this bill, not just for small businesses, but for the entertainment industry as well. The latest Broadway production of the musical Godspell was funded in entirety by small donations from individuals. This allowed the production to focus more on the artistic side of the production instead of worrying so much about what the investors would think. However, this process could have been streamlined with the passage of these bills making their way through the House of Representatives and the Senate. Instead of donating money, they would be investing. Instead of just getting their name listed in the playbill, individuals across the country could see a return on their investment. Record companies could also fund projects by enlisting the help of the general public. Upon further research, I saw that this bill has been passed. Hopefully the government will be able to regulate the investments to keep investors from being defrauded. It will be interesting to see how this progresses in the next year.