With President Obama set to sign the Jumpstart Our Business Startups Act on Thursday, it seems the race is on to create a crowdfunding portal and to start making money. Crowdfunding has been around for a long time and the use of a crowdfunding portal dates back several years. Now there is a crowdfunding accreditation program and a trade association.
Crowdsourcing.org has launched the Crowdfunding Accreditation for Platform Standards program to promote the adoption of best practices. Eight platforms have obtained the green ribbon since the program started on March 21:
David Marlett announced the formation of the National Crowdfunding Association, “the professional organization of all companies and individuals with an interest in crowdfunding. The NCFA is charged with “supporting, educating and protecting the American crowdfunding industry.” According to the press release, over “fifty companies and individuals dedicated to the nascent crowdfunding industry came together to form the association.
Mr. Marlett claims to have launched the first crowdfunding agency on March 21, 2012 and is now the executive director of the National Crowdfunding Association. They even have twitter accounts, Facebook pages, and blogs. (Does that make it real?)
Over on the transcedant Quora, questions keep coming on Crowdfunding: Crowdfunding will explode after the JOBS Act passes. How can I invest in a crowdfunding site?
My original thought on crowdfunding was a line from Groucho Marx, “Please accept my resignation. I don’t care to belong to any club that will have me as a member.” if these investments and opportunities are so good, why hasn’t a professional investor delivered the funding? Why would the company want my $1,000? Maybe they are not that good? Maybe they are inexperienced? Maybe they are just looking to make a quick buck?
In looking at the race to create crowdfunding portals and associations of portals I have the same concerns. There are plenty of existing sites and existing companies that could easily choose to dominate the marketplace, if they so choose. The Securities and Exchange Commission has to craft a regulatory structure to deal with the CROWDFUND Act. That will take months.
For now it seems there will be tussle for attention in the space. The megaphones are out. There will be losses.