EYE TO EYE
JOBS Act Could Kickstart Both Entrepreneurs and Equity Ownership
Crowdfunding site Kickstarter turned three this week, and one of its projects — the Pebble watch — has famously raised $7 million against a $100K goal with a little over two weeks to go.
Considering that the new JOBS Act makes crowdfunding even easier, what sorts of things do you see coming out of the grass roots?
Dave McClure Venture Capitalist and Founding Partner at 500 Startups
The new JOBS Act and crowdfunding in general are good news for the U.S. of A., and will unleash a torrent of entrepreneurial activity in an area that has been resisting innovation for over 70 years -- that is, finance. The Investment Act of 1940 may have been a reasonable response at the time to the post-Depression era, but we're well overdue for an upgrade in our thinking and regulatory framework. Imagine the disruptive potential the next Steve Jobs or Mark Zuckerberg will have with new crowdfunding platforms like KickStarter. Imagine the impact other entrepreneurs can make by raising a little money from their social network for their dream company or project. Imagine the new products and jobs created, powered by people voting with their feet -- and their wallets -- to change the world. While we should always be vigilant against the possibility of consumer investor abuse, we should be more ambitious than afraid of the potential for financial innovation to make people's lives better. We owe it to the next generation to aim higher. So let's get started.
Todd Dagres Founder and General Partner of Spark Capital
The biggest change we could see with the JOBS Bill is companies selling equity to small investors rather than product funding à la Kickstarter. Before the JOBS Bill, only rich, quaified investors could buy stock in start-ups. This opens the market a bit for everyone to participate in the success of a company, rather than having to wait until it is public at a $100B valuation à la Facebook. The JOBS Bill is a small but positive step toward allowing schoolteachers and firemen to build wealth in a way previously reserved for the rich.
