Dr. Amy Vanderbilt

CEO & Chief Strategist

The TrendPOV Show

http://DrAmyVanderbilt.com

Dr. Amy Vanderbilt is the Founder and Chief Strategist at TrendPOV.com, next generation social omni-media that over 600 thousand executives call GPS for your business strategy. She is an award-winning author, show host, executive coach, speaker, and commentator.Her career has enjoyed a fast climb through the ranks of academia, large business, small business, and even the Government by harnessing the power of emerging trends and her unique ability to understand where they are going, and how to use them for competitive advantage.

Crowdfunding is an evolving trend. According to wikipedia.org, crowdfunding, also known as crowd financing, equity crowdfunding or hyper funding, describes the collective effort of individuals who pool their money to support people or organizations in need of funding. Some say it is old news and some say it is the future of fundraising for companies. I think it is both. This trend is undergoing stages just like any other and is a trend in stage four, that is, the limitations stage. Early types of crowdfunding were used in the 19th and 20th century to finance home purchases in the form of group housing, community housing and cooperatives. Charity events and political rallies solicit donations using this process and, around the start of the new millennium, the music industry adopted crowdfunding as a way to sell music and pay for tours. Today, according to wikipedia.org, “There are over 500 crowdfunding platforms all over the world.” In the 1930s, laws were passed to prohibit businesses from soliciting funds from individuals or investors that were not accredited money lenders. The Securities and Exchange Commission (SEC) was thus formed to protect investors and promote efficient use of capital funds. Last year, as noted in wikipedia.org, “President Barack Obama signed the JOBS (Jumpstart Our Business Startups) Act, legislation that effectively lifted a previous ban against public solicitation for private companies raising funds.” Equity-based crowdfunding and new analytics tools have fine-tuned the process for businesses. Some crowdfunding sites, like kickstarter.com have risen to the top by raising more than $10 million for the Pebble smartwatch. But vulnerable businesses may lose their competitive edge with new business ideas and managing communications with a large number of investors can be too much for smaller businesses. After the initial burst of enthusiasm, the future of crowdfunding is still a little uncertain because the SEC rules have not yet been finalized. The final rules which will dictate the future of crowdfunding are expected by the end of the second quarter of 2013. To create advantage from crowdfunding, consider the following. Crowdfunding is a stage four trend. That is, having enjoyed one real utility, it has pulled back under the weight of limitations awaiting its second real reason to exist. Crowdfunding could see a big boost in early 2013 at it moves into stage five - second utility. Anticipate the next use for crowdfunding. Big brands will benefit most from crowdfunding, by using it to fund new product development from an already existing fan base. Startups will have continued difficulty with crowdfunding, however and may have to wait until stage seven to find it useful.