The Immunity of the Tech Giants

16 Jun 2020

When the pandemic is over, we most certainly should fear the industry more than ever.

The immediacy and openness of the internet has massively changed how we transact and this is evident in every sector including the investment world. You’ve probably heard of funding platforms like Kickstarter and Indiegogo which allow business founders to raise capital for their products by “pre-selling” them. Usually, they offer discounts or perks on these products as incentives for becoming an early adopter. Equity crowdfunding is based on a similar underlying idea, but with a major difference. While both models involve turning to the “crowd” for investment (rather than to a bank, VC, or private investor) there is a big difference in the nature of the relationship, as you’ll see in this article.

If you’ve only recently heard about equity crowdfunding, this isn’t because you’re out of touch – it’s a fairly recent development. In the past, talented founders with promising business ideas had limited options for seeking investment; they could get a bank loan, go to family, or get funding from a VC. This all changed in 2015-2016 when two changes to Jobs Act regulations made equity crowdfunding possible and opened a door for businesses to seek “smaller” investments from a much wider audience. For the entrepreneur, the advantages of this new model are obvious, but what about for investors? We’ll take a look at some of those benefits here:

The immediacy and openness of the internet has massively changed how we transact and this is evident in every sector including the investment world. You’ve probably heard of funding platforms like Kickstarter and Indiegogo which allow business founders to raise capital for their products by “pre-selling” them. Usually, they offer discounts or perks on these products as incentives for becoming an early adopter. Equity crowdfunding is based on a similar underlying idea, but with a major difference. While both models involve turning to the “crowd” for investment (rather than to a bank, VC, or private investor) there is a big difference in the nature of the relationship, as you’ll see in this article.

If you’ve only recently heard about equity crowdfunding, this isn’t because you’re out of touch – it’s a fairly recent development. In the past, talented founders with promising business ideas had limited options for seeking investment; they could get a bank loan, go to family, or get funding from a VC. This all changed in 2015-2016 when two changes to Jobs Act regulations made equity crowdfunding possible and opened a door for businesses to seek “smaller” investments from a much wider audience. For the entrepreneur, the advantages of this new model are obvious, but what about for investors? We’ll take a look at some of those benefits here: