My previous post covered some PR problems associated with equity and debt based crowdfunding businesses. The media–and I’ll posit that soon it will be the same politicians that made crowdfunding for equity legal to begin with–opt for scare mongering about fraud rather than highlighting the true facts on the ground and suggesting ways to elucidate them in practice. And the facts on the ground are as follows:
1. The crowdfunding industry as well as the SEC are well aware of potential problems and they’re hard at work figuring out ways to address them.
2. Crowdfunding for equity is dead on arrival if the highest ethical standards aren’t established from the very beginning.
3. The long-term health of the industry should take precedence over short term schemes of a few funding portals.
The CfPA has taken a proactive, top-down approach to implementing best practices in order to address the “facts” above. Thought leadership by the CfPA has been and will continue to be crucial for the industry. The CfPA has demonstrated remarkable self-awareness among crowdfunding portals about the problems they need to address to become a viable investment option; with visionary leaders driving the effort to legitimize crowdfunding, the true colors of the industry show. We’re not a bunch of crooks. We want to revolutionize how businesses grow and give them the resources they need to create jobs. CfPA embodies this mission, and that’s why I wanted to be a co-founding member. They voice many of my core beliefs and intuitions about the industry; I fully support their work up to this point and look forward to seeing the value they’ll add to the Crowd BioVentures mission in the future.