Although the Securities and Exchange Commission is still hammering out the rules of equity crowdfunding, as it’s known, the legislation is a game changer, according to Hedges.
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The global crowdfunding industry raised $5.1 billion in 2013, but competition is stiff — there are thousands of platforms, and the failure rate for crowdfunding campaigns is between 50 and 90 percent. That’s where conferences like Global Crowdfunding come in, Hedges said, teaching startups, nonprofits, and other organizations how to prepare and present campaigns, and how to use online platforms and their own online presence to raise money. The bar may not be that high when you’re sending out a tweet asking for $5, Hedges said, “but here we are talking about thousands of dollars.”
A variety of stakeholders attend Global Crowdfunding, including lawyers, accountants, scientists, financial advisers, brokers, academics, and representatives from “all kinds of incubators and accelerators.” The 2014 conference drew attendees from 12 countries.
WHY THE TIME IS RIGHT
In 1933, securities laws prohibiting the direct sale of stock to everyone except accredited investors made more sense. “Some guy could drive up to a little old lady’s farm and sell her bogus stock certificates,” Hedges said. “She could lose the farm.” Today, the transparency of the Internet makes it far easier to find out information about prospective investments. There are 7 billion people on the planet, many of them with smartphones, she said, “who could be crowdfunding.”
Hedges points to the power of presentation by way of a Kickstarter campaign for a food-and-beverage cooler. When “The Coolest Cooler” was launched last year, the campaign failed. The prototype was revamped, and the campaign was polished and re-launched — and inventor Ryan Grepper has raised more than $13 million.
3rd Global Crowdfunding Convention & Bootcamp
Oct. 23–25, 2014
The Westin Lake Las Vegas Resort & Spa
On the Agenda
› The premiere of the Worldwide Council of Global Crowdfunding Leaders, bringing together industry thought leaders.
› The Situation Room, which provided attendees with one-on-one, 15-minute sessions
› Crowdfunding Marketplace, which sold crowdfunded products.