by Howard Leonhardt, CrowdFunding Beat News, Guest Contributor.
We are about to experience the grandest expression of human creativity and economic growth ever seen in the history of human civilization. Innovative breakthroughs that took decades to create, fund, develop and bring to market will now take mere months. New ideas will be free market tested earlier in their development cycle and discarded or funded at a faster rate. The old innovators mantra of try a lot of stuff and keep what works will be applied at hyper speed rates.
It is universal amongst mankind that right after the health and security of their family what is most sought is a good job. Crowdfunding creates jobs.
Crowdfunding is human will expressed in pure form. A person with a vision becomes a dream funded on a mission. It is the explosive combination of democracy and free market capitalism. It’s democracy and capitalism in action: think you have a great idea? Convince enough people and you can make it a reality. If not, back to the drawing board. It allows new ideas to get funded and to be free market tested at a lower cost, with less complexity, in less time than ever before. Experimentation has now become possible for millions that were previously excluded from having any chance for their idea to be tried. I am confident that this simple breakthrough socio-economic tool is about to herald in mankind’s greatest era.
Every human has a need to feel a part of some great cause and rewarding project. The greatest tragedy of this recession is not the toll on all our bank accounts it is the toll on the human spirit. Crowdfunding is about to be the spark that energizes people to follow their dreams, and to join others that they believe in, to pursue a cause worthy of pursuing. Now more than ever we crave something to believe in, something to support, a reason to care.
A case can be made that the real cause of this worldwide recession is a lost of confidence in these five major forms…
Loss of consumer confidence to buy things.
Loss of investor confidence to invest.
Loss of business confidence to buy and hire for growth.
Loss of bank confidence to make loans to businesses.
Loss of availability of credit to potential buyers.
We believe crowdfunding can be the spark that ignites growing confidence in all five of these essential areas. When people are given the opportunity to pursue their dreams they light up the world around them with enthusiasm, which leads to accomplishment, gratitude and increased confidence.
This simple adaptation in the way new ideas are funded is what we have needed to grow, not only economically but also socially. It is perhaps the most important innovative economic development EVER. It changes everything. Communities empower individuals and individuals empower communities. Now suddenly everyone everywhere has a decent shot at getting a million dollars in funding on any given day. Talk about waking people up to hope and excitement. Talk about a true meritocracy – this is it. You are now truly as good as your idea and your ability to gather support. It is far more efficient than the old models of financing.
The funds of the crowdfunding actually go primarily to the producers and not to non-value adding middlemen and bureaucrats. Customers become investors become apostles, mentors and supporters. A community with a common mission. A win win scenario for all. There is no more powerful force on earth than a person given a fair chance to pursue the true dreams of their heart.
Crowfunding engages customers and involves them. In the modern age engaging customers is essential to growth.
Crowdfunding has the opportunity to fuel another development whose time has come – conscious capitalism or social good entrepreneurship and the age of the social good entrepreneur. Doing well by doing good is about to become the norm not the exception. We will see the birth of a new stock exchange that is more deeply connected with our fundamental desire to support the happiness of people, their health, sustainable communities and our environment. A more caring approach to customers, co-workers, investors and the community will be good business because consumers and investors will reward these types of enterprises.
A new way of work and monumental shift in the relationships between consumers, employees and employers has begun to happen. Everyone is about to become an entrepreneur. What used to be known as your employer will now be the anchor customer of your independent contracting business. Thirty years from now when a young person is asked the simple question “what do you do?” the reply will rarely be one single answer. Most people will have at least three streams of income.
There are more than 7 billion people worldwide with 2 billion with access to the Internet. All 7 billion people have similar needs, wants and desires. Human nature after all is relatively consistent. We all want food, shelter, means of transport, entertainment, security, joy and happiness. Until all 7 billion of us have had all our needs and desires met, a potential growth market exists for entrepreneurs to fill.
Modern communication tools such as the Internet and efficient means of transport have set the stage for world commerce to boom. The two missing elements have been that most people with dreams could not find financing and most people interested to buy things could not find financing. Crowdfunding and microloans implemented through crowdfunding can address both of these missing pieces that will enable the highest level of economic growth we have ever experienced.
What’s new about crowdfunding you ask that is not already in place? Why will this simple innovation have such profound impact? Here is a listing….
There were so many obstacles and upfront costs to funding new ideas with the old methods that it discouraged most to participate.
The average IPO in the USA costs more than $2.4 million up front to have the first right to sell shares of a company to the public with limited general solicitation allowed.
Crowdfunding will be the spark that gets people that never before thought of investing in a startup in their community to do so now.
Social sharing of great new ideas is contagious. Multiple social media platforms stretching the world have been developed with billions of participants. The crowdfunding law change will unleash the enormous power of social media to mate good ideas led by good people with capital. This will change the world.
The small entrepreneur with little resources to start will now be empowered.
Economic growth is driven by innovation. Innovation is driven by experimentation. Crowdfunding funds experimentation.
Lots of funders equals lots of help equals a better chance of success.
Ben Franklin said, “Money is a proliferative by nature. To make the second dollar is much easier than the first. The trouble is making the first.” Crowdfunding provides the first dollar.
Consumers that are investors are a powerful combination to propel a company upwards.
Early adopters SHOULD be the ones that get the reward opportunity to invest early in a great new idea. Their feedback often is what creates the final successful version of the product.
Why shouldn’t smalltime Facebook users be the ones to profit from Facebook stock appreciation instead of outside big scale financiers that likely have never been a Facebook participant. There is a social justice to crowdfunding that makes sense.
Crowdfunding is more likely provide more fair and equal access to capital to women, minorities and youth than the old gatekeeper systems of the past.
Crowdfunding is social networking meets angel investing. There are approximately 60,000 angel investors in the USA now. Crowdfunding is likely to create 60 million new angel investors in the USA alone. This is a powerful transformational development that alters the landscape of financing forever more.
Albeit rare, with Crowdfunding in action there will be housewives that think of an idea on Monday and will have $1 million in the bank to pursue their dream by Friday. Peers that believe in them and their cause will fund good ideas expressed by people that gain trust quickly. Since most crowdfunding investments will be small it will enable new experiments to be tried. With micro financing testing new ideas and testing new investments can be done with a minimization of individual pain in the case of failure. People may gamble a $25 bet on a long shot that normally would never get funded if the minimum investment VC style were expected to be $250,000. Some of these long shots that get funded by crowdfunding, that would have never have received funding with the old financing paradigm, are going to be the ones that change our world for the better.
Crowdfunding is going to be a tool for people to invest in their own communities. This type of helping hand support to people in your own communities will help create sustainable economic health. The growing movements of Local Investing, Buy Local and Impact Investing will all be supported with Crowdfunding at a primary financial tool.
Crowfunding will be teamed with crowdsourcing of information and resources. Every enterprise will become an exercise in the power of collaborative communities.
Of the 7 billion people on earth perhaps ¾’s or 5 billion are engaged in work that does not energize them to be the grandest vision of themselves. Crowdfunding has the potential to do more than anything before in getting more people than ever excited to go into work each day.
Artistic creativity is already well into a new Renaissance with crowdfunding leading the way. Great artists of types, especially in music, that would have never been given a chance to express their art are getting that chance now thanks to crowdfunding.
Crowdfunding in the form of small donations in mass has already transformed politics. We would like to see campaign reform laws established that limit to $200 donations to politicians and only allow them to come from individuals, not corporations or any other source.
Charitable organizations doing good work have applied the power of social media in raising funds with enormous success in the past decade. The crowdfunding of charitable causes via social media has altered the way non-profits operate and has given them a low cost tool to have further reach than ever before.
We believe crowdfunding combined with entrepreneurship education can be instrumental in ending war. Regions should self crowd finance their young people in troubled zones around the world. When these young people are busy working each day they will be less likely to be persuaded to take up arms and pursue war, especially if their customers and investors are on the other side of the conflict. We hereby end this dissertation with a hail call to those in Palestine and Israel to give this experiment a try. Yes we are asking American Jews and Israeli’s to invest in the enterprises of young Palestinians. We are confident the plan will work. If the currently idle youth in places like Palestine turn to becoming productive citizens of the world, earning income by providing value, they will then be able to afford U.S. and Israeli goods which will in turn rise U.S. and Israeli incomes.
Crowdfunding will ignite worldwide prosperity if you join us by investing just $25 a week in startups in your community and if you encourage others to do the same. Consumer, banking and investor confidence will follow. The world will forever more be changed for the better. At last freedom will be translated to genuine opportunity for all.
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