Equity crowdfunding: The next leg in online investing
In 2007, I dipped my big toe into the online finance space when I joined Seeking Alpha. Since then, we’ve seen so much happen in fintech: the past few years have witnessed the rise of the personal finance manager (PFM), the roboadvisor, a new type of currency and underlying infrastructure with Bitcoin, tools to mimic hedge funds and mutual funds, and more.
The history of online investing
I’ve tried to outline what I feel to be the historical signposts along this road toward online investing.
The changing face of the American Investor: Tools, Advice, and Do It Yourself Investing from OurCrowd LLCThe momentum that kicked off when Charles Schwab launched a new way to invest in 1971 — a way that prized independence, low fees, and a do-it-yourself attitude that no one can manage your own money as well as you can — is ramping today. When Wealthfront gets another $1 billion under management, when LendingClub and Prosper underwrite another $1 billion in marketplace consumer loans, when another asset class gets crowdfunded, this is what I’m talking about.
Can all asset classes be crowdfunded?TechCrunch ran this story over the weekend about CrowdJustice — a platform that
allows communities to band together to access the courts to protect their communal assets — like their local hospital — or shared values — like human rights. Successive governments have made access to justice harder and more expensive but we are using the power of the crowd to try and stem the tideWhen cryptocurrencies meet social networks, when peers fund peers, when we move our investing opportunity online, we deconstruct old markets and create new ones. Crowdfunding is already changing the way young and small businesses find financing. Equity crowdfunding — drawing relatively small investments from the crowd to early stage companies — is just getting going.