The beauty of crowdfunding is the inherent democracy of the fund-raising model – almost anyone can invest in a project. However, there are some signs suggesting crowdfunding sites may benefit from ensuring the crowd using the sites are the right group of investors and innovators.
Crowdfunding: better together
Forbes tells us of a merge between crowdfund investment portal RockThePost and CoFoundersLab, which is a matchmaking network that scientifically builds startup teams. The combination creates a powerful crowdfunding platform with 35,000 startup founders and 15,000 accredited investors in which entrepreneurs have raised over $65 million. The combined company will be called Onevest.
“Equity crowdfunding is the most exciting and perhaps most significant development in recent history taking place in the capital markets,” Alejandro Cremades, formerly CEO and Founder of RockThePost, currently CEO and Founder at Onevest said. “Undoubtedly there will be wrinkles the industry will need to address as this new avenue for capital flow continues to emerge – but the tremendous benefits will far outweigh any hiccups along the way.”
Crowdfund fashions
A similar merge in the UK sees Vivienne Westwood-backed green crowdfunding website, Trillion Fund, merging with social and environmental charity fund-raising service, Buzzbnk. The deal gives Trillion Fund a majority stake in the new venture.
“With 14,000 users, the combined entity will become the biggest social crowdfunding platform in the UK, enabling social and sustainable projects to access potential funding of up to £500 million and targeting half a million crowdfunders by the end of 2017,” the two firms reveal.
Leader of the combined firm and former chief executive of the Trillion Fund, Julia Groves said: “By joining forces, Trillion Fund and Buzzbnk will create a crowdfunding resource of real scale. Social investing is just people deciding where they want to put their money so that they can make a good return, but not at the expense of other people or the planet. We will create investment opportunities that previously would have been the preserve of the rich, starting with this country’s clean energy infrastructure.”
More merges to come
ThisIsMoney notes: “The merger is set to be the first of many involving crowdfunders. Dozens were set up last year and the sector is consolidating.”
The implication is that the eventual consolidation of crowdfunding services may limit the available fund raising field for start-ups to a few major channels focused on particular niches. The advantage here might be that these will then offer a crowd of relevant investors potentially interested in taking stakes in new projects in particular sectors.
