Crowdfunding is beginning to dominate the business world. As equity crowdfunding rules continue to take shape, more businesses than ever before are finding that there are non-accredited investors just waiting to get involved. Here are 5 ways that crowdfunding might just kill off the Angel investor for good.
1. Through Rewards.
Rewards don’t just come from the chance to receive a specific product for a specific pledge. Sometimes offering someone the chance to get out of debt or pay for an unexpected funeral is a reward in itself. Crowdfunding gives everyone the chance for a reward. Angel investing rewards the business and the investor only.
2. Through Pre-Orders.
Validating a concept becomes a lot easier through crowdfunding. The evidence of this can be seen in the Coolest campaign. The product raised over $13 million and much of it came through pre-orders. Angel investors can’t provide that for people. When a company is all-in and doesn’t meet their goal, then they don’t even have to make the product either.
3. Through Charity.
Forget taking care of someone’s debt or healthcare costs. What if you could provide clean water to 1 billion people by crowdfunding for it? There’s no return expected, the money goes to a good cause, and people become passionate about change. When was the last time an Angel investor gave money just for the sake of giving money?
4. Through Interest.
Angel investing is looking to outpace returns from other investments. This might work for large sums, but what about small sums? Non-accredited investors can get involved on sites like Kiva to earn interest on debt being financed on micro-loans to help people around the world.
5. Through Equity.
Although only open to accredited investors in most circumstances, the equity model of crowdfunding could change everything. Rules to allow non-accredited investors access to equity are expected in the near future. If the average person can pledge $100 and get an equity percentage in return, who needs an Angel investor that may want controlling interest?
Crowdfunding has seen many successes over the last decade. In the next decade, it might become so successful that it becomes the only way to invest into new companies. Will it kill of the Angel investor for good? Only time will ultimately determine if it will.
Strong proponent of individual liberty and free speech. My goal is to present information that expands our awareness of crucial issues and exposes the manufactured illusion of freedom that we are sold in America. Question everything because nothing is what it seems.